VIPIN VERMA,ETAH vs. CIT(A) ALIGARH, ALIGARH

The facts leading to levy of penalty are that Ld. AO made additions of Rs.9.12 Lacs in the assessment order. The assessee was engaged in online trading of MCX at commodity exchange. In the financial statements, the assessee reflected unsecured loans of Rs.9 Lacs but the assessee failed to file the confirmation and creditworthiness of the lender. Accordingly, this amount was added to the income of the assessee. The addition of Rs.0.12 Lacs represents adhoc 25% disallowance of expenses. Consequently, impugned penalty was levied against the assessee. During appellate proceedings, the assessee contended that the receipt was wrongly classified as loan whereas the same represent gift from family members. Considering the same, the assessee accepted the assessment and chose not to file any further appeal. Nevertheless, the same would not justify the impugned penalty. However, Ld. CIT(A0 rejected the same against which the assessee is in further appeal before us.

It is quite clear that the addition of Rs.0.12 Lacs is nothing but estimated disallowance of expenses. No case of concealment of income could be made out against this item. The other item is also reflected in the financial statements. The same was added for want of sufficient documentary evidences. However, the same would not attract penalty in terms of decision of Hon’ble Supreme Court in the case of Reliance Petroproducts Pvt. Ltd. (189 Taxman 322) holding that mere non-acceptance of a claim would not automatically lead to imposition of penalty on the assessee. Therefore, we delete the impugned penalty and allow the appeal of the assessee.

The appeal stand allowed in terms of our above order. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963.