2019 (5) TMI 1270

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....acts of the case, in brief, are that the assessee is a Private Limited Company and engaged in the business of jewellery items like gold, diamonds etc. It filed its return of income on 24th September, 2014, declaring total income of Rs. 40,76,950/-. The A.O during the course of assessment proceedings observed from the details filed by the assessee that it has debited interest expenses incurred in relation to a car which was purchased in the name of the Director. Further, assessee also debited Motor Car Repairs and Maintenance and depreciation. The total of such expenditure debited to profit and loss account was Rs. 2,51,941/-. Since, the vehicle was not registered in the name of the Company, the A.O asked the assessee to explain as to why....

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.... The assessee drew the attention of the CIT(A) to the notice issued by the A.O and it was submitted that no specific charge has been mentioned in the show cause notice as the inappropriate words have not been struck off. The decision of the Hon'ble Karnataka High Court in the case of CIT Vs. Manjunatha Cotton & Ginning Factory reported in 359 ITR 565, the decision of Hon'ble Supreme Court in the case of CIT Vs. SSA's Emerald Meadows wherein the Hon'ble Supreme Court has dismissed the SLP filed by the Revenue and various other decisions were brought to be notice of the CIT(A). 6. However, the Ld.CIT (A) was not satisfied with the arguments advanced by the assessee and upheld the penalty levied by the A.O u/s 271(1)(c) of the I.....

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.... was no such concealment. Hon'ble Supreme Court in the case of CIT (A) Vs. Reliance Petro Products Pvt. Ltd. 321 ITR 158 has held that merely because the assessee has claimed the expenditure which claim was not acceptable or was not accepted by the revenue that by itself could not attract the penalty u/s 271(1)(c) of the I.T Act. In my opinion merely because the assessee in the instant case, has accepted the disallowance during the course of assessment proceedings that by itself will not preclude the assessee from taking an alternate argument before the Tribunal during penalty proceedings. In view of the above discussion and since full particulars are available before the A.O during the course of assessment proceedings, therefore, penal....