Shri Yogesh T. Vani, Ahmedabad V. The Income tax Officer,Ward-9(4), Ahmedabad

ITA 3278/AHD/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5697 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-07-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 29-06-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 29-09-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K KHANDELWAL
• Assessee Lawyers: S N DIVETIA
• Keywords: Business expenditure; Wrong claim
• Section: 143(3); 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI G. D. AGARWAL, VP AND BHAVNESH SAINI , JM) ITA NO. 3278/AHD/2008 A. Y.: 2003-04 YOGESH T. VANI, 4, ANUPAM FLATS, SHREE MATANGI SOCIETY, UDYAN MARG, AHMEDABAD VS THE INCOME TAX OFFICER, WARD 9(4), AHMEDABAD PAN NO. AALPV 1398 R (APPELLANT) (RESPONDENT) DEPARTMENT BY SHRI A. K. KHANDELWAL, DR ASSESSEE BY SHRI S. N. DIVETIA, AR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-XV, AHMEDA BAD DATED 11-07-2008 FOR ASSESSMENT YEAR 2003-04, CHALLENGIN G THE LEVY OF PENALTY U/S 271 (1)(C ) OF THE IT ACT. 2. WE HAVE HEARD LEARNED REPRESENTATIVES OF BOTH TH E PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND C ONSIDERED THE MATERIAL ON RECORD POINTED OUT BY THE PARTIES. 3. FACTS IN BRIEF ARE THAT IN THE ORDER PASSED U/S 143(3) OF THE IT ACT ON DATED 05-01-2006, AN ADDITION OF RS.2,24,134 /- WAS MADE ON ITA NO.3278/AHD/2008 YOGESH T. VANI VS ITO, W-9(4),AHMEDABAD 2 ACCOUNT OF TRAVELING EXPENSES BECAUSE THE AO FOUND THAT THE TRIPS MADE BY THE ASSESSEE TO LONDON AND PARIS COULD NOT BE CLAIMED AS BUSINESS EXPENSES BY THE ASSESSEE, WHO IS STRUCTURA L ENGINEER BY PROFESSION. THIS ADDITION MADE BY THE AO WAS CONFIR MED BY THE LEARNED CIT(A) VIDE ORDER DATED 02-11-2006. THE ADD ITION WAS CONFIRMED ON THE BASIS OF INFORMATION RECEIVED FROM BABTIE CONSULTANTS INDIA PVT. LTD. (HEREINAFTER MENTIONED AS EMPLOYER) IN RESPONSE TO THE ENQUIRIES MADE BY THE LEARNED CIT(A ) FROM THIS CONCERN. THIS CONCERN HAD TERMINATED THE SERVICES O F THE ASSESSEE WITH EFFECT FROM 28-02-2002 BY WAY OF 14 DAYS NOTIC E GIVEN IN WRITING ON 15-02-2002 AND THE FOREIGN TRIPS FOR WHICH EXPEN SES OF RS.2,24,134/- HAVE BEEN CLAIMED BY THE ASSESSEE WAS EXECUTED IN MAY, 2002, WHEN THE ASSESSEE WAS NOT IN THE EMPLOYM ENT OF THE SAID EMPLOYER. ITAT AHMEDABAD BENCH VIDE ORDER DATED 14- 09-2007 UPHELD THE DISALLOWANCE MADE BY THE AO AND CONFIRME D BY THE FINDINGS OF THE LEARNED CIT(A) GIVEN IN THE ORDER D ATED 02-11-2006. IN THE BACKGROUND OF THE ABOVE FACTS PENALTY U/S 271(1 ) ( C ) OF THE IT ACT WAS LEVIED BY THE AO. THE PENALTY ORDER WAS CH ALLENGED BEFORE THE LEARNED CIT(A) AND IT WAS SUBMITTED THAT FINDIN GS IN THE ASSESSMENT PROCEEDINGS THOUGH GOOD EVIDENCE, ARE HO WEVER, NOT CONCLUSIVE FOR LEVYING PENALTY. IT WAS STATED THAT THE ASSESSEE BEING STRUCTURAL ENGINEER FOR BUILDING AND INDUSTRIAL PLA NTS ETC. WENT TO LEARN FROM THE PRACTICES FOLLOWED ABROAD RELATING TO SEIS MIC DESIGN AND THE STUDY HAD BECOME IMPERATIVE ALL THE MORE DUE TO STR UCTURAL ENGINEERS HELD LIABLE IN CASE OF BUILDINGS COLLAPSING DUE TO EARTHQUAKES. IT WAS SUBMITTED THAT IT HAS NOT BEEN FOUND THAT THE EXPEN DITURE CLAIMED WAS FICTITIOUS BECAUSE THE ASSESSEE HAD ALREADY GONE AB ROAD AND ITA NO.3278/AHD/2008 YOGESH T. VANI VS ITO, W-9(4),AHMEDABAD 3 INCURRED THE EXPENDITURE. IT WAS SUBMITTED THAT THE ASSESSEE IS NOT GUILTY OF ANY CONCEALMENT OF INCOME AND THAT THE EX PENDITURE WAS NOT CLAIMED TO AVOID TAX BECAUSE THE ASSESSEE HAD NO KN OWLEDGE OF COMPLICATED TAX LAWS. THE ASSESSEE ALSO PERSONALLY APPEARED BEFORE THE LEARNED CIT(A) AND EXPLAINED THAT HE IS AN EARN EST TAX PAYER AND NEVER ACCUSED OF ANY CONCEALMENT OF INCOME OR FURNI SHING OF INACCURATE PARTICULARS OF INCOME IN THE PAST. IT WA S CONTENDED THAT THE EMPLOYER OF THE ASSESSEE BABTIE CONSULTANTS INDIA PVT. LTD. GOT ANNOYED BECAUSE HE APPEARED IN A TV PROGRAMME TITLE D THE BIG FIGHT CONSEQUENT TO EARTHQUAKE STRIKING GUJARAT AN D THE VIEWS HE EXPRESSED IN THE PROGRAMME OFFENDED THE GOVERNMENT AND HIS EMPLOYER, THAT IS WHY HIS SERVICES WERE TERMINATED BUT HE WAS UNDER BONA FIDE BELIEF THAT THINGS WOULD GET SORTED OUT A ND HIS EMPLOYER WOULD REIMBURSE THE EXPENDITURE INCURRED BY HIM. IT WAS ALTERNATIVELY CONTENDED THAT LEVY OF PENALTY AT 300% WAS EXTREMEL Y HARSH. THE LEARNED CIT(A) IN PRINCIPLE CONFIRMED THE ORDER OF PENALTY, HOWEVER, PENALTY WAS RESTRICTED TO 100%. THE APPEAL OF THE A SSESSEE WAS THUS PARTLY ALLOWED. THE FINDINGS OF THE LEARNED CIT(A) IN THE IMPUGNED ORDER IN PARA 5 ARE REPRODUCED AS UNDER: 5. I HAVE GONE THROUGH RIVAL SUBMISSIONS AND THAT BABTIE CONSULTANTS INDIA PVT. LTD. HAS STATED IN RESPONSE TO THE ENQUIRIES MADE BY MY PREDECESSOR TH AT APPOINTMENT OF MR. VANI AS SUB-CONSULTANT DID NOT REQUIRE ANY SERVICES TO BE PERFORMED ON BEHALF OF T HE COMPANY ABROAD. IT WAS ALSO INFORMED BY THE COMPANY THAT SINCE NO SUCH FOREIGN TRIP WAS APPROVED BY THE COM PANY, NO REIMBURSEMENT WAS MADE TO THE SUB-CONSULTANT. T HUS ITA NO.3278/AHD/2008 YOGESH T. VANI VS ITO, W-9(4),AHMEDABAD 4 THE CLAIM OF THE APPELLANT WITH RESPECT TO RS.2,24, 134/- INCURRED ON FOREIGN VISIT (LONDON AND PARIS) ON BEH ALF OF BABTIE CONSULTANTS INDIA PVT. LTD. IS FOUND FALSE W HICH TANAMOUNTS TO FURNISHING INACCURATE PARTICULARS AND CONCEALMENT. THE DISALLOWANCE OF EXPENSE HAS BEEN CONFIRMED BY CIT(A) AS WELL AS BY ITAT, C BENCH, AHMEDABAD. AND THIS IS NOT THE CASE OF ROUTINE DISALLOWANCE OF EXPENSES RATHER THE DEPARTMENT DETE CTED THAT THE APPELLANT MADE A FALSE CLAIM, HENCE THE CA SE LAWS CITED WOULD NOT BE APPLICABLE. HOWEVER, IN THE INTEREST OF JUSTICE, AS THE APPELLANT HAS REGULARLY BEEN FILING HIS INCOME-TAX RETURNS AT HIGH FIGURES AND HAS BEEN PAYING TAXES, I FIND I T REASONABLE TO RESTRICT THE PENALTY AT 100% OF TAX S OUGHT TO BE EVADED. THIS PENALTY COMES TO RS.70,602. THE APPELLANT GETS RELIEF OF RS.1,41,204 (RS.2,11,806 M INUS RS.70,602). 4. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. HE H AS FILED TWO LETTERS ISSUED BY M/S. BABTIE CONSULTANTS INDIA PVT . LTD. DATED 10-03-2003 AND 25-11-2002 IN WHICH THE ASSESSEE WAS AGAIN CALLED FOR ONE DAY WORKSHOP ON CERTIFICATION OF MASONS IN GUJARAT. HE HAS SUBMITTED THAT THE ABOVE LETTERS WOULD SHOW THAT TH E ASSESSEE WAS IN CONTINUED EMPLOYMENT OF THE EMPLOYER, THEREFORE, TH E ASSESSEE WAS IN BONA FIDE BELIEF THAT THE AMOUNT INCURRED FOR FO REIGN TRIP WOULD BE REIMBURSED BY THE EMPLOYER. IN THE ABSENCE OF ACTUA L REIMBURSEMENT OF THE EXPENDITURE BY THE EMPLOYER THE ASSESSEE CLA IMED IT TO BE BUSINESS EXPENDITURE LAID OUT WHOLLY AND EXCLUSIVEL Y FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. THE LEARNED COUNSEL FO R THE ASSESSEE SUBMITTED THAT THE FOREIGN TRIP WAS MEANT FOR THE E MPLOYER OTHERWISE THERE WAS NO PURPOSE FOR THE ASSESSEE TO VISIT THE FOREIGN COUNTRIES. ITA NO.3278/AHD/2008 YOGESH T. VANI VS ITO, W-9(4),AHMEDABAD 5 HE HAS SUBMITTED THAT THE ASSESSEE HAS DISPUTED THE TERMINATION OF HIS SERVICES AS ALLEGED BY THE EMPLOYER BECAUSE THE ASSESSEE CONTINUED TO SERVE THE EMPLOYER COMPANY IT WOULD SH OW THAT THE ASSESSEE MADE A BONA FIDE CLAIM OF DEDUCTION OF THE EXPENDITURE INCURRED ON FOREIGN TRIPS. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO HISS WRITTEN SUBMISSION FILED BEFORE TH E LEARNED CIT(A) AND ALSO REFERRED TO PB-5 WHICH IS LETTER DATED 07-07-2 006 BY THE EMPLOYER OF THE ASSESSEE TO THE LEARNED CIT(A) IN WHICH IT WAS EXPLAINED THAT BECAUSE OF BREACH OF CONTRACT CONDIT IONS BY WAY OF APPEARANCE OF THE ASSESSEE IN TV PROGRAMME, THE TEN URE OF THE ASSESSEE WAS TERMINATED. THE LEARNED COUNSEL FOR TH E ASSESSEE SUBMITTED THAT SINCE THE ASSESSEE BONA FIDE UNDERTA KEN THE TRIPS TO THE FOREIGN COUNTRIES, THEREFORE, IT IS NOT A FIT C ASE FOR IMPOSITION OF PENALTY. HE HAS RELIED UPON THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF CIT VS RELIANCE PETROPRODUCTS PVT. LTD. 322 ITR 158 (SC) WHEREIN IT WAS HELD THAT A GLANCE AT THE PROVISIONS OF SECTION 271(1) (C ) OF THE INCOME-TAX ACT, 1961, SU GGEST THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALM ENT OF PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY , THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1) ( C ) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND TO BE I NCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF F URNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSE SSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF ITA NO.3278/AHD/2008 YOGESH T. VANI VS ITO, W-9(4),AHMEDABAD 6 IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUN T TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY TH E ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PA RTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NO T BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1) ( C ). A MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACC URATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. S UCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INAC CURATE PARTICULARS. DECISION OF THE GUJARAT HIGH COURT AFF IRMED. 5. ON THE OTHER HAND, THE LEARNED DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE LEARNED CI T(A) ON QUANTUM HAS REJECTED THE CLAIM OF THE ASSESSEE BY HOLDING T HAT THE ASSESSEE HAS MADE TOTALLY MISLEADING AND FALSE CLAIM. THE LE ARNED DR SUBMITTED THAT THE FINDING OF FACTS RECORDED BY THE LEARNED CIT(A) ON QUANTUM VIDE ORDER DATED 02-11-2006 HAVE BECOME FIN AL BECAUSE THE TRIBUNAL DISMISSED THE APPEAL OF THE ASSESSEE O N QUANTUM VIDE ORDER DATED 14-09-2007. THE LEARNED DR SUBMITTED TH AT FINDING OF FACTS RECORDED ON QUANTUM HAVE A PROBATIVE VALUE. T HE LEARNED DR REFERRED TO PB-6 AND PB-8 WHICH ARE THE LETTERS COM MUNICATED TO THE ITA NO.3278/AHD/2008 YOGESH T. VANI VS ITO, W-9(4),AHMEDABAD 7 LEARNED CIT(A) BY THE EMPLOYER OF THE ASSESSEE IN W HICH IT WAS CLEARLY EXPLAINED BY THE EMPLOYER THAT THE ASSESSEE WAS NOT AUTHORIZED TO UNDERTAKE FOREIGN TRIPS AND THAT THE ASSESSEE HAD NOT INFORMED THE EMPLOYER COMPANY FOR UNDERTAKING ANY F OREIGN TRIPS. THE LEARNED DR SUBMITTED THAT THE SERVICES OF THE A SSESSEE WERE TERMINATED WITH EFFECT FROM 28-02-2002 THEREFORE, T HERE WAS NO REASON TO HAVE UNDERTAKEN ANY FOREIGN TRIPS TO LOND ON AND PARIS DURING MAY, 2002. THE LEARNED DR SUBMITTED THAT THE ASSESSEE HAS ADMITTED THAT HIS SERVICES WERE TERMINATED AS A RES ULT OF HIS APPEARANCE IN TV PROGRAMME ON 26-01-2002. THEREFORE , THERE WAS NO BONA FIDE CLAIM MADE BY THE ASSESSEE FOR REIMBUR SEMENT OF THE EXPENDITURE. THE LEARNED DR SUBMITTED THAT ENQUIRIE S CONDUCTED BY THE LEARNED CIT(A) DIRECTLY FROM THE EMPLOYER OF TH E ASSESSEE REVEALED THAT THE ASSESSEE MADE BOGUS AND FALSE CLA IM OF DEDUCTION OF THE EXPENDITURE WHICH WERE PERSONAL IN NATURE AN D AS SUCH THE AUTHORITIES BELOW WERE JUSTIFIED IN IMPOSING AND CO NFIRMING THE PENALTY U/S 271(1) ( C ) OF THE IT ACT. THE LEARNED DR RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F UNION OF INDIA VS DHARMENDRA TEXTILE PROCESSORS 295 ITR 244 IN WHI CH THE ISSUE WAS REFERRED TO LARGER BENCH AND ULTIMATELY THE HON BLE SUPREME COURT IN THE SAME CASE REPORTED IN 306 ITR 277 HELD THAT WILLFUL CONCEALMENT NOT REQUIRED FOR ATTRACTING CIVIL LIABI LITIES. THE LEARNED DR THEREFORE, SUBMITTED THAT AUTHORITY BELO W HAS RIGHTLY CONFIRMED THE LEVY OF PENALTY U/S 271 (1) ( C ) OF THE IT ACT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL ON RECORD. SECTION 271 (1) ( C ) OF THE IT ACT PROVIDE S IF THE AO OR ITA NO.3278/AHD/2008 YOGESH T. VANI VS ITO, W-9(4),AHMEDABAD 8 COMMISSIONER (APPEALS) OR COMMISSIONER IN THE COURS E OF ANY PROCEEDINGS UNDER THIS ACT IS SATISFIED THAT ANY PE RSON HAS CONCEALED PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE P ARTICULARS OF SUCH INCOME, HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY. EXPLANATION 1 TO SECTION 271 (1) ( C ) OF THE IT AC T READS AS UNDER: EXPLANATION 1.WHERE IN RESPECT OF ANY FACTS MATER IAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT, (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE [ASSESSING] OFFIC ER OR THE [COMMISSIONER (APPEALS)][OR THE COMMISSIONER] TO BE FALSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE [AND FAILS TO PROVE THAT SUCH EXPLANAT ION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AN D MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCL OSED BY HIM], THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING T HE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FO R THE PURPOSES OF CLAUSE (C) OF THIS SUB-SECTION, BE DEEM ED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULAR S HAVE BEEN CONCEALED. 7. IT IS ADMITTED FACT THAT THAT THE AO DISALLOWED THE CLAIM OF THE ASSESSEE FOR TRAVELING EXPENSES RELATING TO HIS FOR EIGN TRIPS TO LONDON AND PARIS IN THE MONTH OF MAY, 2002 UNDERTAKEN ON B EHALF OF HIS EMPLOYER AND THE LEARNED CIT(A) AT THE APPELLATE ST AGE ON QUANTUM MADE A DIRECT ENQUIRY FROM THE EMPLOYER OF THE ASSE SSEE NAMELY BABTIE CONSULTANTS INDIA PVT. LTD. WHO HAVE FURNISH ED THEIR REPLY ITA NO.3278/AHD/2008 YOGESH T. VANI VS ITO, W-9(4),AHMEDABAD 9 DENYING THE CLAIM OF THE ASSESSEE BECAUSE THE SERVI CES OF THE ASSESSEE WERE TERMINATED WITH EFFECT FROM 28-02-200 2 BECAUSE OF APPEARANCE MADE BY THE ASSESSEE IN TV PROGRAMME ON 26-01-2002. THE LEARNED COUNSEL FOR THE ASSESSEE DID NOT DISPUT E THIS FACT DURING THE COURSE OF ARGUMENT THAT THE SERVICES OF THE ASS ESSEE WERE TERMINATED BY HIS EMPLOYER M/S. BABTIE CONSULTANTS INDIA PVT. LTD. BECAUSE OF ASSESSEES APPEARANCE IN TV PROGRAMME AG AINST THEIR INTEREST. THE LETTER WRITTEN BY THE EMPLOYER OF THE ASSESSEE WAS CONSIDERED BY THE LEARNED CIT(A), COPY OF WHICH IS FILED AT PAGE 6 OF THE PAPER BOOK IN WHICH IT WAS EXPLAINED BY THE EMP LOYER OF THE ASSESSEE THAT THE ASSESSEE DID NOT INFORM OF UNDERT AKING ANY SUCH FOREIGN TRIP AND THAT THEY ARE NOT AWARE OF ANY TRI PS UNDERTAKEN BY THE ASSESSEE. NO PRIOR PERMISSION WAS TAKEN AND NO APPR OVAL IS GIVEN AND EVEN THE APPOINTMENT OF THE ASSESSEE AS CONSULT ANT DID NOT REQUIRE ANY SERVICE TO BE PERFORMED ON BEHALF OF TH E EMPLOYER COMPANY ABROAD BECAUSE HIS TRAVELS WERE RESTRICTED TO INDIA ONLY. THEREFORE, THERE WAS NO QUESTION OF ANY REIMBURSEME NT TO THE ASSESSEE. IT IS ALSO EXPLAINED THAT THE SERVICES OF THE ASSESSEE WERE TERMINATED VIDE LETTER DATED 15-02-2002 (PB-8) WITH EFFECT FROM 28-02-2002. THE AFORESAID LETTER OF THE EMPLOYER AN D EXPLANATIONS WERE CONFRONTED BY THE LEARNED CIT(A) TO THE ASSESS EE ON QUANTUM. THE SAME FACTS ARE RECORDED IN THE ORDER OF THE LEA RNED CIT(A) DATED 02-11-2006 (PB-16). THE ASSESSEE FILED REPLY BEFORE THE LEARNED CIT(A). HOWEVER, IT WAS CONCEDED THAT THE ASSESSEE DOES NOT HAVE ANY EVIDENCE IN WRITING TO SUPPORT ANY SUBMISSION T HAT HE COULD VISIT FOREIGN COUNTRIES WITHOUT SEEKING PERMISSION FROM T HE EMPLOYER. THE LEARNED CIT(A) ON QUANTUM VIDE ORDER DATED 02-11-20 06 CONFIRMED ITA NO.3278/AHD/2008 YOGESH T. VANI VS ITO, W-9(4),AHMEDABAD 10 THE DISALLOWANCE OF THE FOREIGN TRIP EXPENDITURE. H IS FINDING IN PARA 3 (PB-28) ARE REPRODUCED AS UNDER: 3. IN ORDER TO DECIDE THE ISSUE, I HAVE CAREFULLY CONSIDERED THE MATERIAL AVAILABLE ON RECORDS PARTIC ULARLY THE INFORMATION RECEIVED FROM BABTIE CONSULTANTS (I NDIA) PVT. LTD. AND HAVE ALSO CONSIDERED THE VARIOUS ARGU MENTS OF THE APPELLANT. ON THE BASIS OF INFORMATION RECEI VED FROM BABTIE CONSULTANT INDIA (P) LTD. WHICH HAS DULY BEE N CONFRONTED TO THE APPELLANT, IT IS CONCLUSIVELY PRO VED THAT THE APPELLANT HAS MADE A TOTALLY UNWARRANTED CLAIM WITH RESPECT TO HIS TOUR TO LONDON AND FRANCE. FIRST OF ALL, HIS CLAIM THAT HIS FOREIGN TOUR TO LONDON AND FRANCE DU RING MAY, 2002 WAS UNDERTAKEN IN THE PERFORMANCE OF HIS DUTIES AS SUB-CONSULTANT IS PROVED TO BE TOTALLY MISLEADING AND FALSE AS HIS DUTIES WITH BABTIE CONS ULTANT (P) LTD. DID NOT REQUIRE AT ALL ANY SERVICES TO BE PERFORMED BY HIM ABROAD SO AS TO NECESSITATE HIS FOREIGN TRAV EL. IT HAS BEEN ESTABLISHED ON RECORD THAT MR. VANI WAS NO T ON THE PAY ROLL OF THE COMPANY AFTER THE 28 TH DAY OF FEBRUARY, 2002 I.E. THE DATE ON WHICH HIS SERVICES WERE TERMI NATED AS A RESULT OF HIS APPEARANCE ON ND TV CHANNEL IN A PROGRAMME CALLED BIG FIGHT ON 26-1-2002. THE COMPAN Y THUS HAD NOTHING TO DO WITH MR. VANI AFTER THE DATE OF TERMINATION OF HIS SERVICES AND HIS CONTENTION THAT THE EMPLOYER COMPANY GOT FURIOUS WITH HIM ON HIS TV INTERVIEW IN THE MONTH OF MAY, 2002 AND AS A RESULT TERMINATED HIS SERVICES, IS THUS FOUND TO BE DEVOID OF ANY MERIT AND DESERVES OUTRIGHT REJECTION. IT HAS ALSO BEEN EXPOSED THAT MR. VANI HAD SUBMITTED A MISLEADING SUBMISSION REGARDING TERMINATION OF HIS SERVICES WH ICH ACCORDING TO HIM, WERE ORALLY TERMINATED BY THE COM PANY WHEREAS THERE WAS A WRITTEN RECORD OF SUCH TERMINAT ION AND THE APPELLANT WAS FULLY AWARE OF THIS FACT. ON THIS BASIS OF EVIDENCE COLLECTED, IT IS ALSO PROVED BEYO ND DOUBT THAT THE APPELLANT HAD SUBMITTED A TOTALLY FA LSE CLAIM OF THE FOREIGN TOUR EXPENSES DULY SUPPORTED B Y AN AFFIDAVIT DATED 3-1-2006 FILED BEFORE THE ASSESSING OFFICER WITH THE PLEA THAT THE EXPENSES UNDER CONSIDERATION HAS ITA NO.3278/AHD/2008 YOGESH T. VANI VS ITO, W-9(4),AHMEDABAD 11 NOT BEEN REIMBURSED TO HIM BY THE COMPANY WHEREAS H E KNEW FULLY WELL THAT NO SUCH TRIP WAS EITHER REQUIR ED OR APPROVED BY THE COMPANY AS HIS SERVICES STOOD TERMINATED MUCH EARLIER TO THE DATE OF SUCH TRIP. I N VIEW OF THIS BACKGROUND, I HAVE NO HESITATION TO HOLD THAT THE APPELLANT HAS FILED A TOTALLY UNWARRANTED CLAIM OF RS.2,24,134/- IN RESPECT OF HIS PERSONAL FOREIGN TO UR WHICH HAS RIGHTLY BEEN REJECTED BY THE LD. ASSESSING OFFI CER. ADDITION OF RS.2,24,134/- IS THUS UPHELD. 8. THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNA L IN ITA NO.952/AHD/2007 (PB-31) AND THE TRIBUNAL VIDE ORDER DATED 14-09-2007 DISMISSED THE APPEAL OF THE ASSESSEE. TH E FINDINGS OF THE TRIBUNAL IN PARA 8 OF ITS ORDER ARE REPRODUCED AS U NDER: 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS, AND PERUSED THE MATERIAL ON RECORD. NO COGENT MATER IAL OR EVIDENCE WAS BROUGHT TO OUR KNOWLEDGE BY THE LEARNE D AR WHICH MAY WARRANT OUR INTERFERENCE IN HE ORDER O F THE CIT(A). IN OUR OPINION, THE CIT(A) HAS RIGHTLY CONF IRMED THE DISALLOWANCE MADE BY THE A.O. THE CIT(A) HAS DE ALT WITH THE SUBMISSIONS MADE BY THE ASSESSEE WHICH HAS BEEN REITERATED BEFORE US. WE DO NOT FIND ANY ILLEG ALITY OR INFIRMITY IN THE FINDINGS OF THE CIT(A) AND WE CONF IRM THE ORDER OF HE CIT(A) BY ENDORSING THE REASONING GIVEN IN PARA -3 OF THE ORDER BY THE CIT(A). 9. CONSIDERING THE UNDISPUTED FACTS NOTED ABOVE, IT IS CLEAR THAT SERVICES OF THE ASSESSEE WERE TERMINATED BECAUSE OF HIS APPEARANCE IN TV PROGRAMME ON 26-01-2002. THE SERVICES OF THE ASSESSEE WERE TERMINATED WITH EFFECT FROM 28-02-2002. THE ASSESS EE HAS HOWEVER, UNDERTAKEN FOREIGN TRIPS TO LONDON AND PARIS DURING MAY, 2002. IT IS, THEREFORE, PROVED ON RECORD THAT THE ASSESSEE WAS N OT IN THE SERVICE OF HIS EMPLOYER BABTIE CONSULTANTS INDIA PVT. LTD. ON THE DATE WHEN ITA NO.3278/AHD/2008 YOGESH T. VANI VS ITO, W-9(4),AHMEDABAD 12 THE ASSESSEE UNDERTAKEN TOUR ON THEIR BEHALF. THE C LAIM OF THE ASSESSEE THAT HE HAS UNDERTAKEN FOREIGN TOURS IN PE RFORMANCE OF HIS DUTIES WAS THUS FOUND TO BE MISLEADING AND FALSE. T HE EXPLANATION OF THE ASSESSEE WAS THUS NOT ACCEPTED AND REACHED THE FINALITY. THE FINDING GIVEN IN THE ASSESSMENT ORDER WHICH IS CONF IRMED BY THE LEARNED CIT(A) AND THE TRIBUNAL HAVE THUS PROBATIVE VALUE FOR THE PURPOSE OF CONSIDERING THE PENALTY MATTER. THE FIND ING OF FACTS RECORDED ON QUANTUM ARE THUS RELEVANT AND CLEARLY P ROVED THAT THE ASSESSEE MADE FALSE CLAIM OF DEDUCTION OF THE FOREI GN TRIP EXPENDITURE. WHEN THE ASSESSEE WAS NOT IN THE SERVI CES OF HIS EMPLOYER BABTIE CONSULTANTS INDIA PVT. LTD. ON THE DATE OF FOREIGN TRIPS THERE WAS NO REASON TO ACCEPT THE EXPLANATION OF THE ASSESSEE THAT HE HAS UNDERTAKEN FOREIGN TRIPS ON BEHALF OF T HE EMPLOYER. THUS, THE CLAIM OF THE ASSESSEE FOR DEDUCTION OF THE EXPE NDITURE WAS RIGHTLY FOUND TO BE FALSE. EXPLANATION 1 TO SECTION 271 (1) ( C ) IS PART OF SECTION 271 (1) ( C ) OF THE IT ACT AND IS CLEARLY ATTRACTED IN THE CASE OF THE ASSESSEE. THE ASSESSEE HAS FAILED TO OFFER ANY EXPLANATION AND WHATEVER EXPLANATION WAS OFFERED WAS FOUND TO BE FA LSE BY THE AUTHORITIES BELOW. SINCE THE ASSESSEE HAS MADE FALS E CLAIM OF DEDUCTION OF THE EXPENDITURE, THEREFORE, EXPLANATIO N OF THE ASSESSEE CANNOT BE CONSIDERED TO BE BONA FIDE. CONSIDERING T HE FACTS AND CIRCUMSTANCES ABOVE, WE ARE OF THE VIEW THAT SUBSEQ UENT LETTERS WRITTEN BY BABTIE CONSULTANTS INDIA PVT. LTD. WOULD HAVE NO IMPACT ON THE LEVY OF PENALTY. THE SUBSEQUENT LETTERS WERE WR ITTEN FOR A DAYS WORKSHOP WHICH HAS NO RELEVANCE TO THE MATTER UNDER CONSIDERATION. THE ASSESSEE HAS MADE A FALSE CLAIM OF DEDUCTION OF THE EXPENDITURE, THEREFORE, AUTHORITIES BELOW WERE JUST IFIED IN HOLDING THAT ITA NO.3278/AHD/2008 YOGESH T. VANI VS ITO, W-9(4),AHMEDABAD 13 THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME OR FILED INACCURATE PARTICULARS OF INCOME. THE FINDINGS RECORDED BY THE AUTHORITIES BELOW CLEARLY PROVE THAT THE DETAILS SUPPLIED BY THE ASSE SSEE IN THE RETURN OF INCOME ARE INCORRECT AND FALSE. WE, THEREFORE, DO N OT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDERS OF THE A UTHORITIES BELOW. THE DECISION IN THE CASE OF RELIANCE PETROPRODUCTS LTD. (SUPRA) RELIED BY THE LEARNED COUNSEL FOR THE ASSESSEE IS CLEARLY DIS TINGUISHABLE ON FACTS AND WOULD NOT SUPPORT THE CASE OF THE ASSESSE E. THE LEARNED DR RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF DHARMENDRA TEXTILE PROCESSORS (SUPRA). HOWE VER, THE HONBLE SUPREME COURT IN ITS LATER DECISION IN THE CASE OF M/S. RAJASTHAN SPINNING & WEAVING MILLS 2009 PIOL 63 SC HELD THAT ON EVERY DEMAND PENALTY IS NOT AUTOMATIC. HOWEVER, CONSIDERING THE ABOVE DISCUSSION, IT IS CLEAR THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND DELI BERATELY MADE FALSE CLAIM OF DEDUCTION OF FOREIGN OUR EXPENDITURE . THEREFORE, PENALTY WAS RIGHTLY IMPOSED IN THE MATTER. WE, THEREFORE, D O NOT FIND ANY IRREGULARITY OR ILLEGALITY IN THE ORDERS OF THE AUT HORITIES BELOW. WE ACCORDINGLY CONFIRM THE ORDERS OF THE AUTHORITIES B ELOW AND DISMISS THE APPEAL OF THE ASSESSEE. ITA NO.3278/AHD/2008 YOGESH T. VANI VS ITO, W-9(4),AHMEDABAD 14 10. AS A RESULT, THE APPEAL OF THE ASSESSEE IS DISM ISSED. ORDER PRONOUNCED ON 2-07-2010 (G. D. AGARWAL) VICE PRESIDENT (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 2-07-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD