TMI Blog2019 (5) TMI 1270X X X X Extracts X X X X X X X X Extracts X X X X ..... E COURT] has held that merely because the assessee has claimed the expenditure which claim was not acceptable or was not accepted by the revenue that by itself could not attract the penalty u/s 271(1)(c) - merely because the assessee in the instant case, has accepted the disallowance during the course of assessment proceedings that by itself will not preclude the assessee from taking an alternate argument before the Tribunal during penalty proceedings. Since full particulars are available before the A.O during the course of assessment proceedings, therefore, penalty u/s 271(1)(c) in my opinion is not attracted on motor car expenses and depreciation Disallowance of ad-hoc expenses of the business promotion expenditure - Addition is on ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount was ₹ 2,51,941/-. Since, the vehicle was not registered in the name of the Company, the A.O asked the assessee to explain as to why these expenses should not be disallowed. The assessee agreed for the above disallowance for which the A.O made the addition of ₹ 2,51,941/. Similarly, out of total business promotion expenses of ₹ 10,23,919/-, the A.O disallowed an amount of ₹ 1,02,392/- on ad-hoc basis @ 10% of such expenses on the ground that the assessee failed to justify with documentary evidence regarding the claim of such expenses for the purpose of business. 4. The assessee did not challenge the above additions. The A.O initiated penalty proceedings u/s 271(1)(c) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various other decisions were brought to be notice of the CIT(A). 6. However, the Ld.CIT (A) was not satisfied with the arguments advanced by the assessee and upheld the penalty levied by the A.O u/s 271(1)(c) of the I.T Act. 7. Aggrieved of such order of the CIT (A), the assessee is in appeal before the Tribunal. 8. I have considered the rival arguments made by both the sides and perused the material available on record. It is an admitted fact that the assessee during the course of assessment proceedings has agreed for the addition of the motor car expenses, depreciation and interest on such loan totaling to ₹ 2,51,941/-. Further, the A.O has made another addition of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that by itself will not preclude the assessee from taking an alternate argument before the Tribunal during penalty proceedings. In view of the above discussion and since full particulars are available before the A.O during the course of assessment proceedings, therefore, penalty u/s 271(1)(c) in my opinion is not attracted on motor car expenses and depreciation of ₹ 2,51,941/-. 9. So far as the other addition is concerned, i.e. disallowance of ad-hoc expenses of ₹ 1,02,392 out of the business promotion expenditure, I find, the same is on ad-hoc basis. It has been held in various decisions that penalty u/s 271(1)(c) of the I.T Act is not sustainable on ad-hoc disallowance of expenses. In view of the above discussio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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