2014 (1) TMI 654

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he assessee without deducting TDS u/s 40a(ia). Accordingly, entire freight charges of Rs. 20,61,434/- was disallowed and added to the income of the assessee. The assessee did not file any appeal and paid tax thereon. However, the Assessing Officer also levied penalty u/s 271(1)(c) with respect to the disallowance so made. 3. By the impugned order, the CIT(A) after considering the decision of the coordinate Bench on the identical issue in the case of ACIT vs. Seaway Shipping Ltd.; ITA No. 80H/2011 decided by I.T.A.T., Hydrabad A-Bench vide order dated 11thJune, 2010 wherein precise observation of the Tribunal at para 5 was as under, deleted the penalty :-    "At the time of hearing on 16.06.2011, none appeared on behalf of the as....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ter considering the decision of the coordinate Bench as narrated above, the CIT(A) deleted the penalty after making the following observations :-    "If we consider the issue, though there is lapse on the part of appellant in deducting TDS before making freight payment to 19 parties, but that is compensated by payment of tax on such amount and that does not make freight expense itself a bogus expense. The disallowance u/s 40(a)(ia) is owing to technical breach of provisions of the Act, which could not give rise to a conclusion that amount in question of freight payment was in any way concealed or inaccurate particulars were furnished for such expense. Hence relying on the decisions of L.G. Chaudhary, I.T.A.T., D-Bench, Ahmadabad ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... said disallowance. It was contended that the issue is covered by the decision of the Supreme Court in the case of Suresh Chand Mittal; 25I ITR 9. The learned counsel for the assessee also relied on the decision of the Hon'ble Supreme Court in the case of Price Water House Copper Pvt. Ltd. 20 ITJ 629 wherein it was held that where notional addition made by the Assessing Officer and accepted by the assessee by paying tax and interest thereon, such bonafide mistake does not warrant any levy of penalty u/s 271(1)(c) of the Act. 6. We have considered the rival contentions, carefully gone through the orders of the authorities below and find from record that default for non-deduction of tax in respect of payment for freight charges was accepted ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... securities, will not amount to furnishing of inaccurate particulars so as to attract penalty u/s 271(1)(c) of the Act. Hon'ble Supreme Court in this case after considering the proposition of law laid down in the case of Dilip N.Shroff - 291 ITR 519 (SC) and Dharmender Textile Processors - 306 ITR 277 (SC), held as under:-    "A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the Return cannot amount to the inaccurate particulars.    Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, in our o....