TMI Blog2021 (5) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... the levy of penalty. It is settled proposition of law that the penalty cannot be levied for mere inability to substantiate the claim in the absence of any positive evidence to the contrary. Reliance in this regard can be placed on the decision of Hon ble Supreme Court in the case of CIT vs. Reliance Petroproducts Pvt. Ltd., [ 2010 (3) TMI 80 - SUPREME COURT] We are of the considered opinion that the impugned order of penalty cannot be sustained in the eyes of law. Accordingly, the orders of the lower authorities are set-aside and we direct the Assessing Officer to delete the penalty levied u/s 271(1)(c) - Decided in favour of assessee. - ITA No. 2004/PUN/2017 - - - Dated:- 24-5-2021 - SHRI INTURI RAMA RAO, AM AND SHRI PARTHA SARATH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the size of the business, circumstances of the business transaction and coming to the conclusion that the transaction is not genuine. 6. I pray for your kind permission to add new grounds of appeal or modify the above grounds at any time before the appeal is heard by Honourable Tribunal. 3. Brief facts of the case are as under :- The appellant is a company incorporated under the provisions of the Companies Act, 1956. It is engaged in the business of trading tobacco. The return for the assessment year 2010-11 was filed on 15.10.2010 declaring total income of ₹ 18,78,180/-. Against the said return of income, the assessment was completed by the Dy. Commissioner of Income Tax, Ichalkaranji Circle, Ichalkaranji ( the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed 60% of the disallowances of salary by holding to be excessive salary, disproportionate to the increase in the business. The ld. CIT(A) also confirmed the 20% of the expenditure incurred shop expenses, telephone expenses, travelling and vehicle expenses on the ground that the possibility of the expenditure being personal cannot be ruled out. Thus, the appeal filed by the assessee came to be partly allowed by the ld. CIT(A). 6. Subsequently, the Assessing Officer issued a show cause notice dated 26.02.2015 calling upon the appellant to file explanation as to why the penalty should not be levied in respect of additions sustained by the ld. CIT(A) i.e. addition on account of disallowance of bogus commission of ₹ 6,06,720/- a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of ₹ 6,06,720/- paid to Shri Sagar Shivnarayan Baldawa of Jaysingpur in respect of purchases made by the assessee from Shri Narayan Tobacco, Gopalpura, Dist. Anand, Gujarat. The Assessing Officer had primarily made disallowances on three counts : (i) According to Assessing Officer, commission paid on purchases is on higher side, (ii) Normally the commission is only paid on sales not on the purchases and (iii) the party from whom the purchase was made had not confirmed that the goods were supplied through Shri Sagar Baldawa. From perusal of the order of the ld. CIT(A), it appears that the said addition was not contested by the assessee. The ld. CIT(A) confirmed the levy of penalty on the ground that there was no proof of services ..... X X X X Extracts X X X X X X X X Extracts X X X X
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