TMI Blog2017 (8) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... shing of inaccurate particulars of income. Therefore, laying our hands on the decisions of Gujrat High Court in the case of Manu Engineering, [1978 (9) TMI 18 - GUJARAT High Court] and Virgo Marketing [2008 (1) TMI 885 - DELHI HIGH COURT] where it has been held that levy of penalty has to be clear as to the limb 8 for which it is levied and the position being unclear penalty is not sustainable, we are of the considered opinion that the penalty imposed in the instance case is void ab initio. Similar view has been taken by Hon’ble Karnataka High Court in Manjunatha’s case (2013 (7) TMI 620 - KARNATAKA HIGH COURT). We, therefore, cancel the penalty imposed u/s. 271(1)(c) of the Act on this legal aspect itself and hence, we need not to ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,75,000 ( iii) Addition on account of loan adjusted in the ledger of Saraswati Printer 9,98,014 ( iv) Disallowance under Section 40A(3) 40,283 4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in ignoring the contention of the assessee that the assessee has disclosed all the facts and as such it is neither a case of concealment of income nor furnishing of inaccurate particulars. 5. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in the order passed by Id CIT(A) is bad as CIT(A) has not g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) who after considering the submissions of the assessee and the facts circumstances of the case, sustained the additions as mentioned hereinabove in the table given in grounds of this appeal. The AO, on the basis of the additions sustained by ld. CIT(A), initiated penalty proceedings u/s. 271(1)(c) of the IT Act and after considering the replies of appellant given in pursuance to the penalty notice, imposed a 4 minimum penalty of ₹ 24,40,094/- vide order dated 10.12.2010. Being dissatisfied, the appellant carried the penalty matter in appeal before the ld. CIT(A), who after considering the detailed submissions of the assessee, confirmed the penalty imposed by AO vide impugned order, aggrieved by which the appellant is in present ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ix parties, partial payment to two of the parties have been made in the subsequent year. One of the parties, i.e. Usha International has adjusted the amount as advance for the booking of the show in the subsequent year and one of the parties has filed the suit for recovery against the assessee. All the documents pertaining to the said submission including the ledger accounts of the relevant year and the succeeding year were filed before the A.O. (PB Pg. 22-40). In view of these facts, it is quite clear that the amounts are still payable, liabilities are existing, no addition u/s 41 can be made, more so no penalty u/s 271(1)(c) can be levied on such addition. The assessee has made complete disclosure. The AO has picked all facts and fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ro Products Ltd vs. CIT 322 ITR 158 (SC) Addition on account of loan adjusted The AO made addition u/s 68 of the Act at page 3 of his order u/s 143(3) of the Act. The penalty has been levied only on addition made as the AO not getting satisfied by the same. Penalty u/s 271(1)(c) cannot be levied on an addition made under section 68 of the Act, in view of the fact that there is no conclusive finding that the credit so appearing is not genuine. Expenses incurred in cash under section 40A(3) The AO made addition of an amount of ₹ 40,283 invoking the provisions of Section 40A(3),m being 20% of the expenses incurred in cash, on account of Tour and Travels and Printing Stationery. The expenses are not hel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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