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Agarwal Developers (P) Ltd. Versus ITO, Ward 1 (2) , New Delhi

2016 (9) TMI 4 - ITAT DELHI

Penalty u/s 271(1)(c) - Held that:- In the show cause notice dated 01/12/2010 there was no specific charges as relates to concealment of income or furnishing of inaccurate particulars of income as relates to business advance as it was forfeited and the same were accepted in respective years. Therefore, there was no concealment on the part of the assessee. This was a simple case of disallowance of expenses under the head in which most of smaller expenses have been allowed during the year as well .....

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when there is inaccurate particulars or concealment on part of the assessee, then the same should be proceeded. But in the present case, the assessee has disclosed all the factual aspects before the Assessing Officer which cannot be stated that there was concealment of particulars of income or the assessee furnished inaccurate particulars of income. - Decided in favour of assessee. - I.T.A .No.-1166/DEL/2013 - Dated:- 27-7-2016 - SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SMT SUCHITRA KAMBLE, JUD .....

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of Maintenance Expenses 12410.00 3 Business advance forfeited, disallowed. 415000.00 Total 466410.00 3. The Assessing Officer made addition of ₹ 5,11,410/- in the assessment order passed u/s 143(3) of the Income Tax Act, 1961. The addition was made on account of late deposit of TDS on commission amounting to ₹ 45,000/-, disallowance of business loss claimed for forfeiture of business amounting to ₹ 4,15,000/-, disallowance of miscellaneous expenses amounting to ₹ 39,000/ .....

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lowed the appeal of the assessee and confirmed the penalty in respect of three additions mentioned in the ground before this Tribunal. 5. The Ld. AR submitted that the initiation of penalty and penalty notices are defective. The Assessment Order under Section 143(3) of the Act was passed on 01.12.2010. In Assessment Order, the Assessing Officer has not specified any specific charge whether it is a case of concealment of income or furnishing of inaccurate particulars of income. The Assessing Offi .....

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particulars of income/furnished inaccurate particulars of income …. Thus, initiation of penalty in Assessment Order under Section 143(3) of the Act and show cause notices are defective/invalid in law and are not competent for enabling the Assessing Officer to levy penalty under Section 271(1)(c) for not specifying the exact reason for which penalty is imposed. Thus no penalty can be levied and the penalty order is liable to be quashed. The Ld. AR relied upon the following authorities: i. .....

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11.2015. (PGS. 33 - 52 of compilation) (RP - 52) iv. FORTUNE POLYMERS INDUSTRIES (P) LTD. VS. DCIT. (ITA NO. 1036/D/2013) Hon ble Delhi ITAT order dtd. 16.01.2015. (PGS. 53 - 64 of compilation) (RP - 62 - 64) Thus, since, the show cause notices are invalid; all subsequent proceedings are also unsustainable in law. 6. The Ld. AR further submitted that the penalty under Section 271(1)(c) of the Act cannot be levied on merits also as on disallowances of business advance forfeited of ₹ 4,15,00 .....

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7; 2,43,65,000/-, out of which the AO accepted all except ₹ 4,15,000/-. All are opening advances, the genuineness of which stands accepted, in respective years. During the year, the assessee claimed the same as forfeited advances being unrecoverable. It is in the nature of bad debt which has been w/off in the books also. There is no concealment of income in respect of these forfeited advances. All facts stands disclosed. No inaccurate particulars of income furnished. It is a case of simple .....

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ny finding of concealment or furnishing of inaccurate particulars of income, mere rejection of assessee's claims under sections 36(l)(vii) and 37(1) relating to bad debts and prior period expenses would not lead to levy of penalty under section 271(l)(c). iii. CIT VS. DABWALI TRANSPORT CO. IN ITA NO. 872/ 2010, ORDER DTD. 15.03.2011 OF P&H HIGH COURT held that where expenses claimed could not be substantiated upto High Court, but the mere fact that the assessee could not furnish evidence .....

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lowance of claim of deduction is not sufficient for imposition of penalty. 7. The Ld. AR further submitted in respect of disallowance of expenses paid in cash that Out of total Misc. Expenses of ₹ 84,793/-, the cash expenses of ₹ 39,000/- disallowed on the ground that no bill, vouchers produced. Out of total maintenance expenses of ₹ 8,08,027/-, disallowed ₹ 12,410/- for want of vouchers. The vouchers could not be produced since voucher file became untraceable. An assesse .....

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