Appeal partially allowed, penalty reduced based on upheld expenses. Decision pronounced on 20.11.2015.

The appeal was partly allowed, with the penalty to be levied only on the sustained addition amount. The Tribunal directed the penalty to be recomputed based on the upheld expenses, significantly reducing the penalty amount. The decision was pronounced on 20.11.2015.

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Issues:
Levy of penalty u/s.271(1)(c) of the Income Tax Act for inaccurate particulars of income and wrong claims towards expenses.

Analysis:
1. The appeal was against the order confirming the penalty u/s.271(1)(c) for the assessment year 2007-08. The assessee claimed expenses on dealer's commission and marketing, but failed to provide proper explanations for the same.
2. The case stemmed from a survey/search revealing the sale of land by the assessee to a construction company. The Assessing Officer disallowed a portion of the claimed expenses, which was upheld by the CIT(A).
3. The CIT(A) observed that the assessee failed to substantiate the claimed expenses, leading to inaccurate particulars of income and concealment of income. The penalty was upheld due to lack of genuine evidence supporting the expenditure claims.
4. The Tribunal noted that the assessee could not prove the expenses claimed, resulting in inaccurate income particulars. The penalty was directed to be recomputed based on the sustained addition of expenses, reducing the penalty amount significantly.
5. Ultimately, the appeal was partly allowed, with the penalty to be levied only on the sustained addition amount. The decision was pronounced on 20.11.2015.

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