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Income Tax Appellate Tribunal, DELHI BENCHES : SMC-II : NEW DELHI
Before: SHRI R.S. SYAL
ORDER This appeal filed by the assessee is directed against the order passed by the CIT(A) on 27.08.2014 confirming the penalty of Rs.1,16,000/- imposed by the AO u/s 271(1)(c) of the Act, in relation to the assessment year 2008-09.
Briefly stated, the facts of the case are that the assessee claimed deduction for a sum of Rs.3,75,395/- with the narration ‘Prior period expenses.’ The AO made disallowance for this amount and, thereafter, imposed penalty u/s 271(1)(c), which came to be approved in the first appeal.
I have heard the rival submissions and perused the relevant material on record. The only bedrock for the imposition of penalty is disallowance of `Prior period expenses’ amounting to Rs.3,75,395/-.
Detail of such expenses has been placed on record, which shows that these are Telephone expenses amounting to Rs.22,854/-, apart from other major item of Business promotion expenses to the tune of Rs.3,47,677/-. The ld. AR submitted that these expenses were incurred in the preceding year, but, the assessee claimed deduction for the said amount in its accounts for the current year as the bills were raised in the instant year. On a specific query, the ld. DR admitted that the assessee did not claim any deduction for Rs.3,75,395/- in the preceding year and the deduction was claimed only in the current year which also stood disallowed. I fail to appreciate the view point of the authorities in imposing and confirming the penalty u/s 271(1)(c) on this amount of disallowance of `Prior period expenses’. It is not the case of the Revenue that the assessee claimed deduction for Rs.3.75 lac in this year as well as the preceding year. By no standard this disallowance can be considered as concealment of income or furnishing of inaccurate particulars of income, so as to attract penalty u/s 271(1)(c) of the Act. I, therefore, order for the deletion of the penalty.
In the result, the appeal is dismissed.
The order pronounced in the open court on 21.06.2016.