TaxTMI 
TaxTMI 
2015 (11) TMI 1366
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....ng grounds :- "1. The order passed by the Hon'ble CIT(A), Baroda is bad in law, contrary to legal pronouncements and same be quashed. 2. The Hon'ble CIT(A), Baroda has erred in not accepting technical ground raised by your appellant as to stipulating whether penalty imposed for concealment of income or furnishing inaccurate particulars of income. Your appellant submits that mere addition to income cannot automatically lead to the conclusion that there was concealment of particulars of income by the assessee or furnishing of inaccurate particulars thereof. Hence, the penalty levied by AO is unjustified. It be held so now and the AO be directed to delete the penalty. 3. The Hon'ble CIT(A), Baroda has erred ....
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....and initiated penalty proceedings u/s.271(1)(c) of the Act and accordingly imposed the penalty of Rs. 1,07,100/- u/s.271(1)(c) of the Act by passing the order on 09.02.2011. 4. Aggrieved assessee went in appeal before the CIT(A) for deletion of penalty imposed at Rs. 1,07,100/- u/s.271(1)(c) of the Act, but could not succeed as ld. CIT(A) confirmed the penalty imposed u/s.271(1)(c) of the Act by observing as under: "10. The above entire facts show that the basic document i.e. agreement itself was not genuine in the case of appellant on the basis of which it has claimed that the services have been rendered by M/s. Arihant Metal Corporation. On the basis of above facts, it can be safely presumed that the agreement was not existing....
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....damages, if any, inspection of the machines supplied by assessee along with providing relevant information during pre/post inquiry at ordering level connected with the tender. The said party, namely, M/s. Arihant Metal Corporation was also responsible for prompt realization of payment, collection of statutory forms, bank guarantees etc. The Assessing Officer has not disputed about the type of services provided by M/s. Arihant Metal Corporation to the assessee. The commission payment of Rs. 3lacs has been paid after deducting income tax at ITA No. 1582/Ahd/ 12 A.Y. 02-03 (Power Bui ld Ltd. v s . ACIT) Page 4 source at Rs. 15,450/- and the difference amount at Rs. 2,84,250/- (gross Rs. 3,00,000/- less TDS Rs. 15,450/-) was paid by account pay....
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....onceal income of a meager amount of Rs. 3lacs by claiming excess expenditure. On other hand, ld. D.R. firmly supported the orders of lower authorities. 6. We have heard the rival contentions, gone through the facts and circumstances of the case and perused the material on record. The only issue involved is in relation to imposition of penalty u/s.271(1)(c) of the IT Act, for furnishing of inaccurate particulars in the shape of wrong claim of commission ITA No. 1582/Ahd/ 12 A.Y. 02-03 (Power Bui ld Ltd. v s . ACIT) Page 5 expenses with intention to reduce tax incidence. From the available records, we find that assessee is a Private Limited Company which has declared income at Rs. 33,72,667/- in its return of income and having an annual tu....
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....nd execution of the order and receipt of old dues, whichever, is earlier and the consideration to be paid to the agent. 6.2 This makes clear that the relationship and services to be provided by the commission agent along with the quantum of commission to be paid was well established on record and not confronted by the Assessing Officer. The alleged commission was duly paid by the assessee company after deducting the applicable income tax at source which in this case was Rs. 15,450/- and the balance amount after reducing TDS was paid to M/s. Arihant Metal Corporation at Rs. 2,84,250/- by cheque on 29th July, 2002. The only lacuna in this complete transaction on commission payment is that the agreement has been entered on stamp paper dated....
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.... meager sum of Rs. 3lacs even when all the conditions required for a genuine transaction of commission payments have been brought on record by the assessee company except the agency contract agreement stamp paper, which was purchased on 8th July, 2012 and the clause mentioning the existence of oral agreement between the principal and agent was missing, which could have regularized the service contract w.e.f. 24.11.2001. For this single mistake, it will not be justified to treat the assessee in default and to impose penalty ITA No. 1582/Ahd/ 12 A.Y. 02-03 (Power Bui ld Ltd. v s . ACIT) Page 7 against him u/s.271(1)(c) of the Act. Further, Section 271(1)(c) of the Act refers to the situation whether the assessee has concealed the particulars ....