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Facts
The AO made an addition of Rs. 34,66,750 for estimated foreign travel expenses, which was subsequently restricted to Rs. 5,00,000 by the ITAT. Based on this, the CIT(A) sustained a penalty of Rs. 1,54,500 under section 271(1)(c) of the Act.
Held
The Tribunal held that since the addition was purely an estimate, the assessee could not be held guilty of concealment or furnishing inaccurate particulars of income. Finding the assessee's conduct not contumacious, the Tribunal deleted the penalty.
Key Issues
Whether penalty under section 271(1)(c) is leviable when the addition to income is based solely on estimation and not on proven concealment or inaccurate particulars.
Sections Cited
271(1)(c)
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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’: NEW DELHI
Before: SHRI SHAMIM
ORDER PER SHAMIM YAHYA, A.M.
This appeal by the Assessee is directed against the order passed by the Learned Commissioner of Income Tax (Appeals)-27, New Delhi, dated 18.07.2023 and pertains to Assessment Year 2016-17. The issue raised in this appeal is that the Ld. CIT(A) erred in sustaining the penalty of Rs. 1,54,500/- u/s 271(1)(c) of the Act.
Brief facts of the case are that the AO found foreign travels of assessee. On the ground that the assessee has not cooperated and given full details, the AO made an addition of Rs. 34,66,750/- on account of estimated expenditure incurred on foreign travelling. In the appellate proceedings, the same was reduced and finally in the order
ITA No.- 2334/Del/2023 Kartikay Nayyar of ITAT, the addition was restricted to Rs. 5,00,000/-. On this amount penalty was levied sustained by the CIT(A).
Against the above order, the assessee is in appeal before ITAT.
I have heard both the sides and perused the records.
I find that addition in this case is purely based upon an estimate. In my considered opinion, given the facts and circumstances of this case, the assessee cannot be held guilty of concealment or furnishing in particulars of income. Moreover, the assessee’s conduct is not contumacious to warrant the levy of penalty. Accordingly I delete the penalty.
In the result, appeal filed by the assessee is allowed.
Order Pronounced in the Open Court on 16 .01.2024
Sd/- (SHAMIM YAHYA) ACCOUNTANT MEMBER Dated: 16/01/2024 (Pooja) Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT
ASSISTANT REGISTRAR ITAT NEW DELHI ITA No.- 2334/Del/2023 Kartikay Nayyar Date of dictation 12.01.24
Date on which the typed draft is placed before the dictating Member Date on which the typed draft is placed before the Other Member
Date on which the approved draft comes to the Sr. PS/PS
Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr. PS/PS Date on which the final order is uploaded on the website of ITAT
Date on which the file goes to the Bench Clerk
Date on which the file goes to the Head Clerk