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TMI Blog2016 (5) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses have to be listed out in the audit report, which is the appellant's case is absent on record . 3. The Learned Commissioner of Income Tax (Appeals) is not justified in holding that nexus to business purpose for travel is not established, without examining the details furnished in this regard and the tax Audit Report contains data on this aspects. 4. The Learned Commissioner of Income Tax (Appeals) is not justified in disallowing a sum of Rs. 11,14,272/- paid, to the directors of the appellant, by invoking provisions of section 40 A (2) without proper basis. 5. The Learned Commissioner of Income Tax (Appeals) is not justified in holding that payment of advisory fees to the directors of the company is not substantiated. 6. The Learned Commissioner of Income Tax (Appeals) is not justified in concluding that no services are rendered by the directors of the appellant to Yatra Art Fund without putting to test the arguments made out in the hand of Yatra Art Fund ( which is also pending in appeal before him) that the entire administrative expenses of the Yatra Art Fund are rendered by the appellant. 7. The Learned Commissioner of Income Tax (Appeals) is not justi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to personal travelling. On the second issue the ld CIT(A) observed that 30% of the total advisory fee was paid to the directors Shri Sanjay kumar and Ms Geeta Mehra without proving the business exigencies and needs for making such payments. 5. The ld AR submitted before us that the full details which were tally generated were filed before the AO as well as the CIT(A) giving full particulars as to travelling such as the persons travelling , travel agent and destination etc and the expenses were required to be incurred in order to purchase the painting and organize the exhibitions and also to invite eminent artists for the functions of the assessee and therefore the disallowance as made for travelling expenses of Rs. 16,17,742/- was uncalled for and be deleted. As regards the second disallowance of Rs. 11,14,272/- u/s 40A(2)(b) the ld counsel argued that the said expenses paid to the directors out of genuine business needs were disallowed without bringing any materials on records proving the same to excessive and unreasonable which was pre-requisite of making such disallowance. The ld counsel further submitted that there was no loss of revenue for these payments made as the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sustained and therefore, the addition of Rs. 11,14,272/- is order to be deleted by deciding issue in favour of the assessee. 7. Ground no. 9 is consequential in nature and other grounds raised as 10, 11 and 12 are general in nature and therefore do not require any adjudication. 8. In the result, the assessee appeal is partly allowed. 9. Now we shall take up the appeal for the assessment year Assessment Year 2007-08. 10. Grounds of appeal taken by the assessee are as under : "1. The Learned Commissioner of Income Tax (Appeals) is not justified in confirming the penalty levied u/s 271 (1)( c ) at Rs. 7,40,520/- without construing para 6 to 10 of statement facts filed along with appeal. 2. The Learned Commissioner of Income Tax (Appeals) is not justified in concluding that the disclosure of additional income of Rs. 22 lakhs is consequential to search action, but for which the appellant would not have disclosed the alleged unaccounted sales. 3. The Learned Commissioner of Income Tax (Appeals) failed to appreciate that the various sale instances alleged as unaccounted in the notice for levy of penalty and the order thereunder does not relate to this assessment year but to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng additional grounds of appeal. a. The Learned CIT (A) is not justified in sustaining the penalty levied under section 271 (1) (c) when the statutory explanations thereunder do not apply to the facts of the case. b. The Learned CIT (A) is not justified in ignoring the statutory construction of section 271 AAA on the manner of imposing the penalty in the present case, when the conditions related therein is effective only for search conducted after 1/6/2007. 2. The above issues could not be raised earlier before the first appellate authority on account of the fact that a petition under section I S4 was filed before him on 24/12/2013 subsequent to his order dismissing the' appeal and no action thereon has been taken so far. 3. The additional grounds raised are legal issues, going into the very root of the subject matter of levy of concealment penalty, and if left unadjudicated will cause irreparable loss to the appellant on the substantial question of law relating thereto. 4. In view of the above the two additional grounds may be admitted. on record for disposal on merits." 12. The facts of the case are that the search and seizure action was conducted on the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said unaccounted sales in its books of account. If there was no search action in the case of the appellant, it would have not incorporated the admitted undisclosed income in the return of income. Since the disclosure of the additional I income of Rs. 22,OO,OOO/- is consequent to search action u/s 132 of the Act-and the appellant itself admitted such additional income to compensate for the unaccounted sales, concealment of income is established by its own conduct of admission, inviting the levy of penalty u/s.271 (1)(c) of the Act. The various judicial decisions cited by the appellant are not applicable to the facts of the of the appellant. The appellant's claim that the mens-rea is required to be proved in penalty proceedings is not necessary in view of the Hon'ble Supreme Court Decision in the case of Union of India V/s Dharamendra Textile Processors (2008) 174 tax"mamm 571 (SC) wherein it was held that for the purpose of levy of levy of 271 (1 )(c) of the I. T. Act, the Assessing Officer is not required to establish means-rea as in the case of prosecution, which is a criminal liability." 7.2 In view of the above, the penalty levied u/s.271 (1 )(c) of the Act amounting t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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