TMI Blog2018 (9) TMI 468X X X X Extracts X X X X X X X X Extracts X X X X ..... ee-company to incur these expenditure. Therefore, Explanation-1 to Section 37 may not apply in the case of the assessee-company. It is a case of disallowance of part of the expenses which have been incurred consistently by assessee-company in earlier years as well. Therefore, it is not a fit case for levy of the penalty. - Decided in favour of assessee - ITA.No.6891/Del./2014 - - - Dated:- 7-9-2018 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER For The Assessee : Shri Rajesh Mahna, Advocate. For The Revenue : Shri K. Tiwari, Sr.D.R. ORDER PER BHAVNESH SAINI, J.M. This appeal by assessee has been directed against the Order of the Ld. CIT(A)-X, Delhi, Dated 24.09.2014, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details of the expenses i.e., business promotion, service charges paid, clearing and forwarding and travelling expenses. The A.O. found from the details furnished by the assessee-company that there are payments exceeding cash payment of ₹ 20,000/- on several occasions. The A.O. also noted that there are self-made vouchers made for expenses. The A.O. rejected the books of account under section 145(3) of the I.T. Act, 1961. The A.O. disallowed 25% of the expenditure out of the above expenses and made disallowance of ₹ 57,58,187/-. 5. The assessee-company challenged the addition before Ld. CIT(A). The detailed written submissions are noted in the appellate order. The Ld. CIT(A) agreed with the contention of the assessee-company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other hand relied upon the orders of the authorities below. 9. After considering the rival submissions, we are of the view that penalty is not leviable in the facts and circumstances of the case. The A.O. noted in the assessment order that there are payments made in cash which exceeded ₹ 20,000/-. The A.O. rejected the books of account, but, Ld. CIT(A) set aside the order of the A.O. as regards rejection of the books of account. The assessee-company submitted before Ld. CIT(A) on quantum addition that assessee-company is in business of medical isotopes and other life saving drugs. The assessee-company has to incur expenses on promotion of business as part of general trade practice. The expense have been regularly incurred and whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the bills and vouchers found there are some occasional gifts to the Doctors and staff of the hospitals and that some laptop is purchased and that ledger shows approximately ₹ 45,300/- have been spent for followup of tender in Armed Forces medical material supply Depot. It is not pointed out or any specific finding have been given that while incurring these expenses as to what offence is committed by the assessee-company and what is the prohibition by any Law which may not allow the assesseecompany to incur these expenditure. Therefore, Explanation-1 to Section 37 of the I.T. Act may not apply in the case of the assessee-company. May be that ledger account shows that amount of ₹ 45,300/- have been spent by assessee-company for f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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