AMPOULES & VIALAS MFG. CO. LTD,MUMBAI vs. CIT 14 CIR 6(1)(3), MUMBAI

The present appeal has been preferred by the assessee against the order dated 03.11.2014 of Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)]. The assessee has agitated the confirmation of the penalty of Rs.1,20,684/- imposed on the assessee by the Assessing Officer (hereinafter referred to as the AO) under section 271(1)(c) of the Income Tax Act.

None has come present on behalf of the assessee despite notice. However, considering the sole issue involved and the facts of the case, we are of the view that the case can be decided after hearing the Ld. D.R.

The brief facts of the case are that the director of the assessee company namely Mr. Arvind Kejriwal along with his wife Smt. Sapna Kejriwal visited

The Ld. CIT(A) confirmed the said penalty levied by the AO under section 271(1)(c) of the Act. The assessee, thus, has come in appeal before us.

We find that in the statement of facts before the Ld. CIT(A), the assessee had explained that Smt. Sapna Kejriwal had accompanied her husband Mr. Arvind Kejriwal, the director of the company for foreign travel and they visited to Dubai, Hong Kong fair, cotton fair in China and USA for business purposes; That Smt. Sapna Kejriwal helped her husband in procuring the business orders because she knows the Spanish and French languages. She had also taken part in one exhibition of business. Further, that as a result of their visit the company got various orders and made exports. The company has already suffered fringe benefit tax of 20% of the expenses on such travel expenses. Considering the above statements, we find that neither it is a case of furnishing of inaccurate particulars of income nor of concealment of income. Merely because the AO did not allow the foreign travel expenses of the wife of the Director, that itself cannot be held to be a case of furnishing of inaccurate particulars of income or concealment of income. The assessee was under bonafide belief that it was entitled to the claim of above expenses. The assessee has also given justification for the same as discussed above. Every disallowance of expenditure cannot also be held to be a case of levy of penalty under section 271(1)(c) of the Act.

In view of this, we do not find any justification on the part of the lower authorities in imposing the above penalty upon the assessee. The penalty levied by the lower authorities under section 271(1)(c) of the Act is therefore ordered to be deleted.