Sh. Anil Bajaj, Ludhiana V. DCIT, Ludhiana

ITA 995/CHANDI/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77149 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-06-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 01-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUDHIR SEHGAL SH VIJAY SHAR MA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 995/CHD/2012 ASSESSMENT YEAR: 2006-07 SHRI. ANIL BAJAJ, VS. THE DCIT 143, TRANSPORT NAGAR CIRCLE- II LUDHIANA LUDHINA, PAN NO. ABXPB2555K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. SUDHIR SEHGAL, SH. VIJAY SHAR MA RESPONDENT BY : SHRI. AKHILESH GUPTA DATE OF HEARING : 09/06/2014 DATE OF PRONOUNCEMENT : 19/06/2014 ORDER PER T.R.SOOD, A.M. THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)- LUDHIANA, DATED 27.07.2012. 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEA L: 1. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPE ALS) HAS ERRED IN CONFIRMING THE LEVY OF PENALTY OF RS. 97,000/- U/S. 271(1) (C) OF THE INCOME TAX ACT, 1961. 2. THAT THE FINDING OF THE CIT THAT EXPENDITURE AS CLAIMED OF THE FREIGHT IS NOT GENUINE IS AGAINST THE FACTS AND CIRCUMSTANCES OF T HE CASE. 3. THAT THE WORTHY CIT(A) HAS NOT CONSIDERED PROPER LY THE DETAILED SUBMISSIONS MADE BEFORE HIM VIDE SUBMISSIONS, DT. 2 6.07.2012 AND HAS FAILED TO CONSIDER THAT EACH AND EVERY THING STOOD DISCLOSED IN THE RETURN OF INCOME. 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT DURI NG THE ASSESSMENT PROCEEDINGS AO NOTICED THAT ASSESSEE HAS SHOWN FREIGHT RECEIPT AS WELL AS FREIGHT EXPENSES. ASSESSEE HAD MAINTAINED SELF MADE VOUCHERS FOR FREIGHT EXPENSES AND ON VERIFICATION OF THE SAME IT WAS NOTICED THAT THE SOME OF THESE EXPENDITURE VOUCHERS WERE UNSIGNED. FIFTEEN SUCH VOUCHERS TOTALING TO RS. 3,14,000 WERE ACCEPTED TO BE NOT PROPER BY THE ASSESSEE. IN THIS BACKGROUND AO MADE ADDITION OF RS. 3 LACS TO THE I NCOME OF THE ASSESSEE AND ALSO INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)( C). 4. IN RESPONSE TO THE SHOW CAUSE NOTICE FOR LEVY OF PENALTY IT WAS MAINLY SUBMITTED THAT PENALTY CANNOT BE LEVIED MERELY BECAUSE ASSESS EE HAS NOT BEEN ABLE TO SUBSTANTIATE A PARTICULAR EXPENDITURE. FURTHER ASSESSEE HAS HIMSEL F ACCEPTED THAT SUCH VOUCHERS WERE NOT PROPER. RELIANCE HAS ALSO BEEN PLACED ON CERTAIN CA SE LAWS, HOWEVER, AO DID NOT FIND FORCE IN THE SAME AND LEVIED OF PENALTY OF RS. 97,0 00/-. ON APPEAL, THE ACTION OF THE AO WAS CONFIRMED BY LD. CIT(A). 5. BEFORE US, IT WAS CONTENDED BY THE LD. COUNSEL F OR THE ASSESSEE THAT THE MERE DISALLOWANCE OF AN EXPENDITURE CANNOT LEAD TO PENAL CONSEQUENCES. IN ANY CASE, THE EXPENDITURE WAS ALSO DISCLOSED AND IT IS NOT A CASE OF UNDISCLOSED INCOME. 6. ON THE OTHER HAND, LD. DR SUPPORTED THE ORDER OF CIT(A). 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIND THAT PENALTY HAS BEEN LEVIED BECAUSE CERTAIN FREIGHT EXPENSES WERE DISALLOWED AS PROPER SIGNED VOUCHERS WERE NOT AVAILABLE. IT IS A SETTLED LAW THAT THE MERE DISALL OWANCE OF EXPENDITURE CANNOT LEAD TO THE PENAL CONSEQUENCES. SIMILAR VIEW WAS TAKEN BY THE H ONBLE PUNJAB & HARYANA HIGH COURT IN CASE OF CIT VS. AJAIB SINGH AND CO. 253 IT R 630 (P&H), THEREFORE, IN OUR OPINION THIS IS NOT A FIT CASE FOR LEVY OF PENALTY AND ACCORDINGLY WE SET ASIDE THE ORDER OF LD. CIT (A) AND DELETE THE PENALTY. 8. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19/06/2014 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 19 TH JUNE, 2014 AG COPY TO: 1.THE APPELLANT,2.THE RESPONDENT,3.THE CIT,4.THE CI T(A),5.THE DR