Abhinav International Pvt. Ltd., New Delhi V. DCIT Circle-1(1), New Delhi

ITA 7822/DEL/2019

AI Insights

The case involves M/s. Abhinav International P. Ltd., which appealed against the penalty order passed by the Assessing Officer and sustained by the Commissioner of Income Tax (Appeals). The penalty was imposed due to discrepancies in the income reported by the appellant, which included disallowances under Section 14A, additions under Section 56(2)(viib), and incorrect claims of interest on loans and TDS. The Tribunal examined the submissions and evidence presented, noting the absence of the appellant's representation during the hearings, and proceeded ex-parte. The Tribunal's decision was influenced by precedents and the specific provisions of the Income Tax Act concerning the furnishing of inaccurate particulars of income.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121472 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-01-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 25-09-2019
• Other Referred Cases: Commissioner of Income-tax v. Kalindi Rail Nirmann Engg. Ltd., Commissioner of Income-tax v. Global Associates, Commissioner of Income-tax v. HCIL Kalindee Arss Pvt. Ltd., Mak Data (P.) Ltd. v. Commissioner of Income-tax, Commissioner of Income-tax v. N G Technologies Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: TDS; Rule 8D
• Section: 56; 12; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A” DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A No.7822/DEL/2019 Assessment Year 2013-14 M/s. Abhinav International P. Ltd., E-93, 3 rd Floor, GK Enclave-I, New Delhi. v. DCIT, Circle-1(1), New Delhi. TAN/PAN: AADCA8631P (Appellant) (Respondent) Appellant by: None Respondent by: Shri Kanav Bali, Sr.DR Date of hearing: 16 01 2023 Date of pronouncement: 23 01 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: Th e cap tio n ed ap peal h as b een d irect ed ag ain st th e ap p ell at e o rd er o f th e Co mmissio n er o f In co me Tax (Ap p eals)-I, New Delh i [‘CIT(A)’ in sh o rt] d a ted 2 6 .0 8 .2 0 19 arisin g fro m pe n alty o rd er p assed b y th e Assessin g Offi cer d ated 1 9 .0 1 .2 0 18 wherein th e p en alty o f Rs .3 0 ,5 3 ,7 10 /- o n th e q u an tu m add itio n s o f Rs.9 8 ,8 2 ,5 5 6 /- su stain ed in th e ap p el lat e p ro ceed ing s was i mp o sed o n acco u n t o f c erta in d isa llo wan ces a n d ad d itio n s. 2 . In th e first ap p ea l, th e CIT(A) n o ti ced th at p enal ty u n d er Sect io n 2 7 1 (1 )(c) was i mp o sed o n fo u r co u n ts. (i) Disal lo wan ce o f R s.3 6 5 5 46 /- u n d er Sect io n 1 4 A (ii) Disal lo wan ce o f in teres t o f Rs .6 0 ,7 2 ,4 3 2 /- (ii i) Ad d itio n o f Rs .3 4 ,3 8 ,0 0 0 /- u nd er Sect io n 5 6 (2 )(v iib) I.T.A No.7822/Del/2019 2 an d ; (iv ) In terest o n la te d ep o sit o f TDS wr o n g ly clai med at Rs.6 ,5 7 8 /- 2 .1 Th e CIT(A) co n clu d ed in p aragrap h 7 .3 o f its o rd er t h at no p en alty sh o u ld b e imp o sed fo r d isal lo wan ces u n d er Secti o n 14 A o f th e Act. On th e rema in in g amo u n t o f Rs .9 5 ,1 7 ,0 1 0 /-, th e CIT(A) su stain ed th e p en a lty a l leg in g fu rn is h in g o f in ac curate p arti cu lars o f in co me b y th e a ssessee . 4 . Ag g riev ed b y th e act io n o f th e CIT(A), th e assessee fi led ap p eal b e fo re th e Trib u n al. 5 . Wh en th e ma tt er was cal led fo r h ea rin g , n o n e ap peared fo r th e asses see . It ap p ears fro m th e re co rd /o rd er sh eet t h at n o o ne h as ap p eared fo r th e ass essee o n an y o f th e o cca sion s. Hav in g reg ard to th e to tali ty o f th e circ u mstan c es an d lack ad aisi cal co n d u ct o f th e assessee , th e mat ter i s p ro ceed ed ex-p arte in th e ab sen ce o f th e asse ssee. 6 . Th e CIT(A) too k no te o f th e su b miss i o n s o f th e assessee and fo u n d co mp lete l ac k o f meri t in th e p l ea o f th e assessee ex cep t fo r th e d isal lo wan ce u n d er Sectio n 14A. Th e CIT(A) su stain ed th e p en alty o n th e rema in in g ad d it io n s. Th e rel ev an t o perativ e p arag rap h o f th e o rd er o f th e CIT(A) i s rep ro d u ced h ereun d er: “ 7 . D e c i s i o n : 7 . 1 I n t h e p r e s e n t c a s e , a s s e s s m e n t u / s 1 4 3 ( 3 ) o f th e I . T . A c t , 1 9 6 1 w a s c o m p l e t e d o n 1 9 . 0 2 . 2 0 1 6 a f t e r m a k i n g t h e f o l l o wi n g a d d i t i o n s : D i s a l l o w a n c e u / s 1 4 A : R s . 2 1 , 3 3 , 3 6 1 / - D i s a l l o w a n c e o f i n t e r e s t ( R s . 1 6 , 9 0 , 3 9 2 ) a n d l o a n p r o c e s s i n g f e e ( R s . 4 3 , 8 2 , 0 4 0 ) f o r m o n e y b o r r o w e d a n d R s . 6 0 , 7 2 , 4 3 2 / - n o t u s e d f o r t h e b u s i n e s s o f t h e a p p e l l a n t : I.T.A No.7822/Del/2019 3 A d d i t i o n f o r e x c e s s o f m o n e y r e c e i v e d a s s h a r e a p p l i c a t i o n m o n e y o v e r t h e r a n - m a r k e t v a l u e o f s h ar e s : R s . 3 4 , 3 8 , 0 0 0 / - L d . C 1 T ( A p p e a l s ) p a s s e d o r d e r i n t h e c a s e i n A p p e al N o . 4 1 1 / 1 5 - 1 6 o n 0 9 . 1 1 . 2 0 1 6 a n d t h e a p p e a l o f t h e a p p e l l a n t w a s p a r tl y a l l o w e d . L d . C T T h a s s u s t a i n e d t h e a d d i t i o n s m a d e b y t h e A O u n d e r d if f e r e n t h e a d s a s u n d e r : Issue Addition made in assessment order Outcome in order by Ld. CIT (Appeals) Disallowance u/s 14A Rs. 21,33,361/- Addition restricted to Rs. 3,65,546/- by reducing addition made under Rule 8D (2)(iii) Disallowance of interest (Rs. 16,90,392) and loan processing fee (Rs. 43,82,040) for money borrowed and not used for the business of the assessee: Rs. 60,72,432/- Appeal on this ground dismissed and addition increased to Rs. 79,08,068/- Addition for excess of money received as share application money over the fair market value of shares: Rs. 34,38,000/- Appeal on this ground dismissed Disallowance of interest on late deposit of TDS: Rs. 6,578/- No appeal filed on this ground 7 . 2 T h e a p p e l l a n t f i l e d f u r t h e r a p p e a l b e f o r e t h e In c o m e T a x A p p e l l a t e T r i b u n a l a g a i n s t t h e o r d e r o f L d . C 1 T (A pp e a l s ). H o n ' b l e I T A T , D e l h i h a s u p h e l d t h e a p p e l l a t e o r d e r p a s s e d by L d . C I T ( A ) . I n t h e p r e s e n t c a s e , t h e a p p e l l a n t e a r n e d d i v i d e n d i n c o m e o f R s . 5 4 , 8 4 , 1 4 0 / - d u r i n g t h e y e a r f r o m i n v e s t m e n t i n s h a re s w h i c h w a s c l a i m e d a s e x e m p t . T h e a s s e s s i n g o f f i c e r m a d e t h e ad d i t i o n o f R s . 2 1 , 3 3 , 3 6 1 / - u / s 1 4 A f o r e x p e n s e s r e l a t i n g t o e x e m p t i n c o m e a s p e r R u l e 8 D . T h e t o t a l d i s a l l o w a n c e m a d e u n d e r S e c t i o n 1 4 A w a s r e d u c e d f r o m R s . 2 1 , 3 3 , 3 6 1 / - t o R s , 3 , 6 5 , 5 4 6 / - b y th e L d . C I T ( A p p e a l s ) . T h e a s s e s s i n g o f f i c e r m a d e t h e a d d i t i o n o f R s , 6 0 , 7 2 , 4 3 2 / - o n a c c o u n t o f c l a i m o f i n t e r e s t o n l o a n t a k e n a n d p r o c e s s i n g f e e s o n t h e l o a n t a k e n w h i c h w a s u t i l i z ed f o r l o a n s a n d a d v a n c e s g i v e n t o i t s s i s t e r c o n c e r n s a s t h e e x p e n se w a s n o t i n c u r r e d f o r b u s i n e s s p u r p o s e s . L d . C I T ( A p p e a l s ) he l d i n h i s o r d e r t h a t s i n c e t h e d i s a l l o w a n c e f o r i n t e r e s t m a d e u n d e r R u l e 8 D ( i i ) I.T.A No.7822/Del/2019 4 h a d a l r e a d y b e e n r e d u c e d f r o m R s . 1 6 , 9 0 , 3 9 2 / - t o R s. 6 7 , 8 2 1 / - , e n t i r e a m o u n t o f i n t e r e s t o f R s . 3 5 , 2 6 , 0 2 8 / - a n d l oa n p r o c e s s i n g f e e o f R s . 4 3 , 8 2 , 4 0 0 / - h a d t o b e d i s a l l o w e d . T h u s th e d i s a l l o w a n c e o f R s . 6 0 , 7 2 , 4 3 2 / - m a d e b y t h e a s s e s s i n g o f f i c e r w as i n c r e a s e d t o R s . 7 9 , 0 8 , 0 6 8 / - ( R s . 3 5 , 2 6 , 0 2 8 + R s . 4 3 , 8 2 , 0 4 0 ) b y L d . C I T ( A p p e a l s ) . T h e a s s e s s i n g o f f i c e r m a d e a d d i t i o n o f Rs . 3 4 , 3 8 , 0 0 0 / - f o r t h e a m o u n t o f s h a r e p r e m i u m r e c e i v e d , b y i t o v er t h e a m o u n t o f f a i r m a r k e t v a l u e o f s h a r e s . T h e a p p e l l a n t i s s u e d 90 , 0 0 0 e q u i t y / s h a r e s o f f a c e v a l u e o f R s . 1 0 e a c h a t a p r e m i u m of R s 4 0 p e r s h a r e d u r i n g t h e y e a r . T h e a s s e s s i n g o f f i c e r d i d n ot a c c e p t t h e v a l u e o f R s . 7 1 . 0 4 s u b m i t t e d b y t h e a p p e l l a n t a n d ma d e a d d i t i o n o f R s . 3 4 , 3 8 , 0 0 0 / - u / s . 5 6 ( 2 ) ( v i i b ) b e i n g t h e e x c e s s of a m o u n t r e c e i v e d o n a l l o t m e n t o f s h a r e s a b o v e t h e f a i r , m a rk e t v a l u e . L d . C I T (A p p e a l s ) c o n f i r m e d t h i s a d d i t i o n a s t h e a p p e l la n t d i d n o t s u b m i t a n y e v i d e n c e i n s u p p o r t o f i t s c l a i m o f f o r v a l u a t i o n o f s h a r e s a t R s . 7 1 . 0 4 p e r s h a r e . T h e a p p e l l a n t p a i d in t e r e s t o f R s . 6 , 5 7 4 / - o n l a t e d e p o s i t o n T D S w h i c h w a s c l a i m e d a s e x p e n s e . T h e A s s e s s i n g O f f i c e r d i s a l l o w e d t h i s e x p e n s e a s i t i s n o t a l l o w a b l e . N o a p p e a l w a s f i l e d b y t h e a p p e l l a n t o n t h i s i s s u e . T he A O h a s m a d e t h e f o l l o w i n g c h a r t f o r t h e p u r p o s e o f l e v y i n g p e n al t y u / s . 2 7 1 ( 1 ) ( c ) i n t h e i n s t a n t c a s e : Issue Amount of income on which tax souqht to be evaded Income u/s 14A read with Rule 8D Rs. 3,65,546/- Amount of interest (Rs. 16,90,392) and processing fee (Rs.43,82,040) for money borrowed and not used for the business of the assessee. Wrongly claimed. Rs. 60,72,432/- Income u/s. 56(2)(viib) not declared Rs.34,38,00/- Interest on late deposit of TDS wrongly claimed Rs.6,758/- Total Rs.98,82,556/- I n t h e p e n a l t y o r d e r t h e A O h a s h e l d t h a t t h e a p p e ll a n t i s l i a b l e f o r p e n a l t y u / s 2 7 1 ( 1 ) ( c ) o f t h e I n c o m e T a x A c t , 1 9 6 1 of a n a m o u n t e q u a l t o t h e a m o u n t o f t a x s o u g h t t o b e e v a d e d o n in c o m e o f R s . 9 8 , 8 2 , 5 5 6 / - a b o u t w h i c h i n a c c u r a t e p a r t i c u l a r s w e r e f u r n i s h e d b y t h e a p p e l l a n t . T h e p e n a l t y o f R s . 3 0 , 5 3 , 7 1 0 / - h a s be e n l e v i e d b y t h e A O u / s . 2 7 1 ( 1 ) ( c ) i n t h e i n s t a n t c a s e . 7 . 3 C o n s i d e r i n g t h e f a c t s o f t h e c a s e , I a m o f t h e v i e w t h a t n o p e n a l t y s h o u l d b e i m p o s e d o n d i s a l l o w a n c e u / s . 1 4 A . S e c t i o n 5 6 ( 2 ) ( v i i b ) i s a n a n t i a b u s e p r o v i s i o n a n d a n y a d d it i o n u / s . 5 6 ( 2 ) ( v i i b ) i s l i a b l e f o r p e n a l t y u / s . 2 7 1 ( 1 ) ( c ) . As r e g a r d s t h e d i s a l l o w a n c e o f i n t e r e s t , i t i s f o u n d t h a t t h e a p p el l a n t c o m p a n y h a s t a k e n i n t e r e s t b e a r i n g l o a n a n d g i v e n i t a s i n t e r e st f r e e l o a n t o i t s I.T.A No.7822/Del/2019 5 s i s t e r c o n c e r n s . T h e a p p e l l a n t h a s a l s o p a i d h u g e pr o c e s s i n g f e e f o r r a i s i n g t h e s e l o a n s . H o w e v e r , t h e l o a n t a k e n b y t h e a p p e l l a n t c o m p a n y w a s n o t u t i l i z e d f o r t h e p u r p o s e o f t h e b u si n e s s o f t h e a p p e l l a n t c o m p a n y . T h e s e l o a n s w e r e d i v e r t e d t o s i st e r c o n c e r n s w i t h o u t c h a r g i n g a n y i n t e r e s t o r f e e s . T h e a p p e l l a nt h a s i n c u r r e d t h e e x p e n s e s o n a c c o u n t o f ( i ) t h e i n t e r e s t o f R s . 1 6 , 9 0 , 3 9 2 / - o n l o a n a n d (i i ) t h e p r o c e s s i n g f e e o f R s . 4 3 , 8 2 , 0 4 0 / - f o r r a i s i n g t h e l o a n s w h i c h w e r e n o t n e v e r u t i l i z e d f o r t h e b u s i n e ss o f t h e a p p e l l a n t . C o n s i d e r i n g t h e f a c t s o f t h e c a s e , i t i s h e l d t h a t t h e a p p e l l a n t h a s f u r n i s h e d i n a c c u r a t e p a r t i c u l a r s o f in c o m e t o t h e e x t e n t o f R s . 9 5 , 1 7 , 0 1 0 / - . A c c o r d i n g l y , i t i s h e l d t h a t t h e a p p e l l a n t i s l i a b l e f o r p e n a l t y u / s . 2 7 1 ( 1 ) ( c ) o f T h e A c t . I n t h i s r e g a r d , I w o u l d l i k e t o r e l y o n t h e f o l l o w i n g j u d i c i a l p r o n o un c e m e n t s : “ [ 2 0 1 4] 5 1 t a x m a n n . c o m 5 2 3 (D e l h i ) , H I G H C O U R T O F DE L H I , C o m m i s s i o n e r o f I n c o m e - t a x v . K a l i n d i R a i l N i r m a n En g g . L t d . “ S e c t i o n 2 7 1 ( 1 ) ( c ) o f t h e I n c o m e - t a x A c t , 1 9 6 1 - P en a l t y - F o r c o n c e a l m e n t o f I n c o m e ( I n c a s e o f e s t i m a t i o n o f p r of i t ) - A s s e s s m e n t y e a r 1 9 9 5 - 9 6 - A s s e s s e e w a s a c o n t r a c t o r a n d a s s e s s e e d e c l a r e d i t s i n c o m e a t a n e s t i m a t e d 3 p e r c e n t o f co n t r a c t r e c e i p t s - S e a r c h t o o k p l a c e i n a s s e s s e e ' s p r e m i s e s a n d i n vi e w o f s e i z e d m a t e r i a l s A s s e s s i n g O f f i c e r g a v e d u e o p p o r t u n i t y t o a s s e s s e e t o j u s t i f y d i s c l o s e d i n c o m e a n d e x p l a i n d i s c r e p a n c i e s n o t i c e d b y s p e c i a l a u d i t o r - A s s e s s e e w a s a l s o p e r m i t t e d t o i ns p e c t s e i z e d d o c u m e n t s - D e s p i t e t h a t a s s e s s e e c o u l d n o t e x p l a i n s a i d d i s c r e p a n c i e s - A c c o r d i n g l y A s s e s s i n g O f f i c e r r e s o rt e d t o e s t i m a t i o n o f p r o f i t s b y a d o p t i n g 1 1 p e r c e n t o n g ro s s c o n t r a c t r e c e i p t s a n d i n i t i a t e d p e n a l t y p r o c e e d i n g s - Wh e t h er t h e r e w a s g r o s s o r w i l f u l n e g l i g e n c e o n p a r t o f a s s e s s e e i n fa i l i n g t o r e t u r n c o r r e c t i n c o m e , p e n a l t y w o u l d b e l e v i e d u n d e r s e c t io n 2 7 1 ( 1 ) ( c ) - H e l d , y e s [ P a r a 1 2] [ I n f a v o u r o f r e v e n u e] ” [ 2 0 1 4] 5 2 t a x m a n n . c o m 6 6 ( D e l h i ) , H I G H C O U R T O F D E LH I , C o m m i s s i o n e r o f I n c o m e - t a x v . G l o b a l A s s o c i a t e s . “ S e c t i o n 2 7 1 ( 1 ) ( c ) o f t h e I n c o m e - t a x A c t , 1 9 6 1 - P en a l t y - F o r c o n c e a l m e n t o f i n c o m e ( D i s a l l o w a n c e o f c l a i m , e f f e ct o f ) - A s s e s s m e n t y e a r 2 0 0 8 - 0 9 - A s s e s s e e d e b i t e d a n a m o u nt t o w a r d s l i q u i d a t e d d a m a g e s - A s s e s s i n g O f f i c e r o b s e r v e d t h at c o m p u t a t i o n o f l i q u i d a t e d d a m a g e s w a s d o n e o n b a s i s t h a t 3 l a k hs M T o f i r o n o r e f i n e s w e r e t o b e s u p p l i e d t o o v e r s e a s p u r c h a s e rs w h i l e , i n f a c t , a s p e r a g r e e m e n t b e t w e e n t h e m a c t u a l a g r e e d q u a n t i ty w a s 2 . 8 5 l a k h M T - E x p l a n a t i o n o f a s s e s s e e t h a t f i g u r e o f 3 l a k h M T i n c l u d e d m o i s t u r e c o n t e n t , w a s a l s o n o t b o r n e o u t fr o m r e c o r d ; i t a l s o d i d n o t a p p e a r t o b e a p a r t o f a n y c o n d i t i o n ag r e e d t o b e t w e e n p a r t i e s - Wh e t h e r c l a i m o f e x c e s s l i q u i d a t ed d a m a g e s a m o u n t e d t o f u r n i s h i n g o f i n a c c u r a t e p a r t i c u l a r s a nd , h e n c e , l e v y o f p e n a l t y w a s j u s t i f i e d - H e l d , y e s [ P a r a 6] [ I n fa v o u r o f I.T.A No.7822/Del/2019 6 r e v e n u e] . ” [ 2 0 1 3] 3 7 t a x m a n n . c o m 3 4 7 ( D e l h i ) , H I G H C O U R T O F D EL H I , C o m m i s s i o n e r o f I n c o m e - t a x v . H C I L K a l i n d e e A r s s p l . “ S e c t i o n 2 7 1 ( 1 ) ( c ) , r e a d w i t h s e c t i o n 8 0 - I A , o f t h e I n c o m e - t a x A c t , 1 9 6 1 - P e n a l t y - F o r c o n c e a l m e n t o f i n c o m e [ Wr o n g cl a i m u n d e r s e c t i o n 8 0 - I A] - A s s e s s m e n t y e a r 2 0 0 7 - 0 8 - A s s e s s e e' s c l a i m f o r d e d u c t i o n u n d e r s e c t i o n 8 0 - I A w a s r e j e c t e d b y A s s e ss i n g O f f i c e r o n g r o u n d t h a t a s s e s s e e w a s e x e c u t i n g w o r k s c o n t r a c t - A s s e s s i n g O f f i c e r a l s o I m p o s e d p e n a l t y u n d e r s e c t i o n 2 7 1 ( 1 ) ( c) - T r i b u n a l d e l e t e d p e n a l t y h o l d i n g t h a t c l a i m f o r d e d u c t i o n u nd e r s e c t i o n 8 0 - I A w a s d u l y s u p p o r t e d b y c e r t i f i c a t e o f c h a r t e r e d ac c o u n t a n t i n p r e s c r i b e d f o r m a n d , h e n c e , b o n a f i d e - Wh e t h e r m e re l y b e c a u s e a s s e s s e e c o m p l i e d w i t h s t a t u t o r y p r o c e d u r a l r e q u i r em e n t o f f i l i n g p r e s c r i b e d f o r m a n d c e r t i f i c a t e o f C h a r t e r e d A c c o u nt a n t , i t c o u l d n o t a b s o l v e a s s e s s e e o f i t s l i a b i l i t y , i f a c t o r a tt e m p t i n c l a i m i n g . d e d u c t i o n w a s n o t b o n a f i d e - H e l d , y e s - Wh e t h e r t o s h o w a n d e s t a b l i s h b o n a f i d e s , a s s e s s e e h a d t o s h o w s o m e m o re ' t a n g i b l e m a t e r i a l ' o r b a s i s a s t o w h y a c l e a r s t a t u t o r y p r o vi s i o n w h i c h e x c l u d e s w o r k s c o n t r a c t w a s i g n o r e d - H e l d , y e s - Wh e t h e r s i n c e a s s e s s e e h a d n o t b e e n a b l e t o e s t a b l i s h t h a t i t h a d a c t e d b o n a f i d e l y , d e l e t i o n o f p e n a l t y b y T r i b u n a l w a s u n j u s t if i e d - H e l d , y e s [ P a r a s 1 0 , 1 1 & 1 3] [ I n f a v o u r o f r e v e n u e] . ” [ 2 0 1 3] 3 8 t a x m a n n . c o m 4 4 8 ( S C ) , S U P R E M E C O U R T O F I ND I A , M A K D a t a ( P . ) L t d . v . C o m m i s s i o n e r o f I n c o m e - t a x - I I V o l u n t a r y d i s c l o s u r e d o e s n o t r e l e a s e a s s e s s e e f r o m m i s c h i e f o f p e n a l p r o c e e d i n g s u n d e r s e c t i o n 2 7 1 ( 1 ) ( c ) I n t e r m s o f s e c t i o n 2 7 1 ( 1 ) ( c ) , A s s e s s i n g O f f i c e r h as t o s a t i s f y w h e t h e r p e n a l t y p r o c e e d i n g s b e i n i t i a t e d o r n o t d u ri n g c o u r s e o f a s s e s s m e n t p r o c e e d i n g s a n d A s s e s s i n g O f f i c e r i s n o t r e q u i r e d t o r e c o r d h i s s a t i s f a c t i o n i n a p a r t i c u l a r m a n n e r o r re d u c e i t i n t o w r i t i n g Wh e r e o f f e r o f s u r r e n d e r o f c e r t a i n a m o u n t r e c e i v e d a s s h a r e a p p l i c a t i o n m o n e y w a s m a d e b y a s s e s s e e i n v i e w o f de t e c t i o n m a d e b y A s s e s s i n g O f f i c e r i n s e a r c h c o n d u c t e d i n c a s e o f a s s e s s e e ' s s i s t e r c o n c e r n , s a i d s u r r e n d e r o f i n c o m e n o t b e i n g v o l u n t a r y i n n a t u r e , a u t h o r i t i e s b e l o w w e r e j u s t i f i e d i n l e v y i n g p e n a l t y u n d e r s e c t i o n 2 7 1 ( 1 ) ( c ) . ” C o m m i s s i o n e r o f I n c o m e - t a x v . N G T e c h n o l o g i e s L t d . [ 2 0 1 5] 5 7 t a x m a n n . c o m 3 8 9 ( D e l h i ) , H I G H C O U R T O F D E L H I “ S e c t i o n 2 7 1 ( 1 ) ( c ) , r e a d w i t h s e c t i o n 2 8 ( i ) , o f t h e I n c o m e - t a x A c t , 1 9 6 1 - P e n a l t y - F o r c o n c e a l m e n t o f i n c o m e ( D i s a l l o wa n c e o f c l a i m , e f f e c t ) - A s s e s s m e n t y e a r 2 0 0 6 - 0 7 - Wh e t h e r wh e r e a s s e s s e e I.T.A No.7822/Del/2019 7 c l a i m e d l o s s o n s a l e o f f i x e d a s s e t s i n p r o f i t a n d l o s s a c c o u n t w h i c h w a s a c a p i t a l l o s s , s a m e w a s c o n t r a r y t o b a s ic p r i n c i p l e s o f a c c o u n t a n c y - H e l d , y e s - Wh e t h e r s i n c e a s s e s s e e d i d n o t f i l e r e v i s e d r e t u r n f o r s a m e v o l u n t a r i l y b u t h a d f i l e d re v i s e d r e t u r n a f t e r A s s e s s i n g O f f i c e r c o n f r o n t e d a s s e s s e e a n d t h ey w e r e a s k e d t o e x p l a i n c l a i m o f l o s s i n q u e s t i o n i n p r o f i t a n d l o ss a c c o u n t p e n a l t y u n d e r s e c t i o n 2 7 1 ( 1 ) ( c ) w a s s u s t a i n a b l e - H e l d , y e s [ P a r a s 1 7 a n d 2 0] [ I n f a v o u r o f r e v e n u e] , ” T h e a b o v e d e c i s i o n s a r e s q u a r e l y a p p l i c a b l e t o t h e f a c t s o f t h e p r e s e n t c a s e . C o n s i d e r i n g t h e f a c t s o f t h e c a s e , I a m o f t h e v i e w t h a t t h e p r o v i s i o n s o f s e c t i o n 2 7 1 ( 1 ) ( c ) o f t h e A c t a r e a t t r a c t e d i n t h e c a s e o f t h e a p p e l l a n t . I t i s a l r e a d y h e l d t h a t p e n a l t y s h o u l d n o t b e i m p o s e d o n d i s a l l o w a n c e o f R s 3 , 6 5 , 5 4 6 / - u / s 1 4 A. E x c l u d i n g t h e d i s a l l o w a n c e u / s 1 4 A , t h e r e m a i n i n g d i s a l l o w a n ce c o m e s t o R s 9 5 , 1 7 , 0 1 0 / - o f R s . 9 8 , 8 2 , 5 5 6 / - R s 3 , 6 5 , 5 4 6 / - ) . T h e p r o v i s i o n s o f s e c t i o n 2 7 1 ( 1 ) ( c ) a r e a t t r a c t e d t o t h e d i s a l l o w a n c e o f R s 9 5 , 1 7 , 0 1 0 / - . I n v i e w o f i t , i t i s h e l d t h a t t h e p r ov i s i o n s o f s e c t i o n 2 7 1 ( 1 ) ( c ) a r e a t t r a c t e d t o t h e d i s a l l o w a n c e o f R s 95 , 1 7 , 0 1 0 / - f o r f u r n i s h i n g i n a c c u r a t e p a r t i c u l a r s o f i n c o m e a s d i s cu s s e d a b o v e i n t h e i n s t a n t c a s e . A c c o r d i n g l y , t h e p e n a l t y o f R s 2 9, 4 0 , 7 6 0 / - i m p o s e d u / s 2 7 1 ( 1 ) ( c ) i s u p h e l d i n t h e i n s t a n t c a se a n d t h e a p p e l l a n t g e t s a r e l i e f o f R s 1 , 1 2 , 9 5 0 / - . G r o u n d N o. 2 i s p a r t l y a l l o w e d . 7 . 4 G r o u n d N o . 1 & 3 a r e g e n e r a l i n n a t u r e a n d d o no t r e q u i r e a n y a d j u d i c a t i o n . 8 . I n t h e r e s u l t , a p p e a l o f a p p e l l a n t b e a r i n g A p p e al . N o . 5 0 6 / 1 7 - 1 8 i s p a r t l y a l l o w e d . 7 . Befo re u s, n o n e ap p eared as no ted ab o v e. On th e p erusal o f th e su b miss io n s mad e b y th e CIT(A), i t is n o ted th at t h e assessee h as fa il ed to p la ce co g en t ev id en ce t h at in t eres t in cu rred o n lo an an d ad v an ces g iv en to i ts s is ter c o n cern were in cu rred fo r th e b u sin ess p u rpo ses. Th e lo an an d al l o wan ces were g iven with o u t ch arg in g any in terest wh ich h as resu lted in in cu rrin g b urd en on acco u n t o f ad v an ces g iv en to sist er co n cern in v io lat io n o f Sect io n 3 6 (1)(iii) o f th e Act. L ik ewise , b e fo re th e CIT(A), t h e assesse e h as fa i led to d e fe n d in ap p licab i li ty o f Sec tio n 5 6 (2 )(viib ) o f th e Act. I t i s n o t b o rn e o u t fro m th e reco rd s as to w h y Sectio n 5 6 (2)(v iib ) is n o t ap p lic ab le o r th e a ltern a tiv e p ro v isio n s o f I.T.A No.7822/Del/2019 8 Sect io n 2 7 1(1 )(b ) is n o t at trac ted in th e fact s o f th e ca se. Sa me is a cas e in r esp ect o f la te d ep o si t o n T DS. Th u s, in th e a b sen ce o f an y materi al o n reco rd , it is d ifficu l t to co n ceiv e p lau sib il i ty in th e ac t io n o f th e as sessee . We th u s d e clin e to in ter fere . 8 . As p er its g ro un d s, th e asses see h as also al leg ed th at n o tice issu ed fo r i mp o sit io n o f p en al ty d o es n o t sp ec ify th e n atu re o f d efau l t an d th u s en tire p en al ty p ro ceed in g s is req uired to b e q u ash ed at th e th resh o ld . No p en alty n o tice i s av ailab le o n reco rd . No su ch ob jectio n was raised b efo re lo wer au th orities eith er . We th u s are in n o p o sit io n to ex p ress o u r v iew o n su ch co n ten tio n s. 9 . In th e resu lt, th e ap p eal o f th e as sessee is d ismiss e d ex- p a rte. Order pronounced in the open Court on 23/01/2023. Sd/- Sd/- [CHANDRA MOHAN GARG] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /01/2023 Prabhat