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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: SH. SANJAY ARORA & SH. N.K.CHOUDHRY
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA No.525(Asr)/2017 Assessment Year:2006-07
Ms. K.C. Land & Finance Vs. Dy. CIT, (Regd.), Central Circle-II, K.C. Tower, Chandigarh Road, Jalandhar Nawanshahar PAN:AAEFK 0109J (Appellant) (Respondent)
Appellant by: Sh. M.R. Bhagat & Rajinder Kr. Chopra Respondent by: Smt. Parwinder Kaur (Ld. DR) Date of hearing: 07.08.2018 Date of pronouncement: 16 .08.2018 ORDER PER N.K.CHOUDHRY, JM: The instant appeal has been preferred by the Assessee/Appellant, on feeling aggrieved against the order dated 03.05.2017, passed by the Ld. CIT(A)-5, Ludhiana, u/s. 250(6) of the I.T. Act, 1961 (hereinafter called as ‘the Act’) for Asst. Year: 2006-07 whereby the ld. CIT(A) has confirmed the penalty of Rs.75,000/- imposed by the Assessing Officer. 2. The only ground of appeal raised by the assessee. “That the ld. CIT(A) erred in confirming penalty of Rs.17,000/- without appreciating the facts that the addition of Rs.49,271/- as 40% disallowances of expenses are purely on estimation basis and without having any documentary evidence in hand. Since no penalty can be imposed on difference of opinion and estimation as is covered in various cases of Punjab & Haryana High Court. It is prayed that penalty may be deleted.”
At the outset, it reflects from the record that the Assessing Officer in addition to other disallowances also disallowed @ 40% of such expenses as shown in the debit side in the income and expenditure account under various heads which includes salaries, printing and stationary, postage and telegram, office expenses, bank charges, legal fees, misc. expenses, news paper, income tax, conveyance
ITA No.525/Asr/2017 (A.Y.2006-07) 2 M/s K.C. Land & Finance., Nawanshahar v. DCIT
and maintenance and depreciation etc. It was further affirmed by the ld. CIT(A) and penalty of Rs.17,000/- was made on the addition of Rs.49,271/-. Our attention was drawn by the ld. AR to the P&L Account for the year under consideration and submitted that the addition was made even of the Income Tax paid by the assessee and other monetary expenses such as salaries, printing and stationary, postage and telegram, office expenses, Bank charges, legal fees etc. which goes to show that the Assessing Officer has not applied his mind.
The ld. DR relied on the order of the authorities below. 5. We have given our thoughtful consideration to the submission of the parties. The Assessing Officer also taken into consideration the Income Tax as well as legal fees paid by the assessee while disallowing expenses @ 40% and the Assessing Officer without considering the crucial facts as mentioned above imposed the penalty, hence we are in agreement with the submission of the Ld. AR to the effect that the Assessing officer has not applied his mind independently while imposing the penalty. In our view, the said crucial facts were paramount to be considered by ld. CIT(A) while adjudicating the issue, who also failed to observe, hence the non- application of mind goes to the root of the case which at least can vitiate the penalty order, therefore on the reasons stated above, we do not find any substance to uphold the penalty order imposed by the Assessing Officer and confirmed by the ld. CIT(A), and consequently the penalty of Rs.17,000/- stands deleted.
In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 16.08.2018.
Sd/- Sd/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated:16.08.2018 /PK/ Ps. Copy of the order forwarded to: (1) Ms. K.C Land 7 Finance (Regd.), K.C. Tower, Chandigarh Road, Nawanshahar (2) The DCIT, Central Circle-II, Jalandhar (3) The CIT(A)-5, Ludhiana (4) The CIT concerned (5) The SR DR, I.T.A.T., Amritsar True copy By order