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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
Before: SHRI D. KARUNAKARA RAO & SHRI PAWAN SINGH
PER D. KARUNAKARA RAO, AM: This appeal filed by the assessee on 22.8.2012 is against the order of the CIT (A)-19, Mumbai dated 7.6.2012 for the assessment year 2007-2008. In this appeal, assessee raised six grounds in toto and they revolve around the issue of penalty of Rs. 2,81,000/- levied by the AO u/s 271(1)(c) of the Act and the CIT (A)‟s decision in confirming the same.
At the outset, drawing our attention to the facts of the case, Ld Counsel for the assessee submitted that this is a case where the assessee executed job works for the sister concern and received certain receipts. Against the same, assessee incurred expenses. For want of details, AO disallowed 10% of the claim. On appeal, CIT (A) restricted the said disallowed to 5%. Dissatisfied and aggrieved with the said decision of the CIT (A), assessee filed an appeal before the Tribunal. During the proceedings before the Tribunal, the said disallowance was restricted to 2% of the claim which works out to Rs. 4,17,378/-. This is the subject matter of penalty u/s 271(1)(c) of the Act.
Before us, Ld Counsel for the assessee argued that the „ad-hocism‟ is the basis for disallowance and the assessee has done his responsibility by disclosing all the facts in the return of income. In such circumstances, this is not a fit case for levy of penalty u/s 271(1)(c) of the Act.
On the other hand, none attended on behalf of the Revenue.
We have heard the Ld Counsel for the assessee and perused the orders of the Revenue Authorities as well as the relevant material placed before us. After hearing Ld Counsel and on perusal of the relevant record, we find, the argument of the Ld Counsel for the assessee is fair and reasonable. Accordingly, since ad-hoc disallowance linked penalty, we are of the opinion that this is not a fit case for levy of penalty u/s 271(1)(c) of the Act. Thus, the grounds raised by the assessee are allowed.
In the result, appeal of the assessee is allowed. Order pronounced in the open court on 29th February, 2016. (PAWAN SINGH) ACCOUNTANT MEMBER भुंफई Mumbai; ददनांक 29.2.2016 व.नन.स./ OKK , Sr. PS आदेश की प्रतिलऱपि अग्रेपिि/Copy of the Order forwarded to : अऩीराथी / The Appellant 1. 2. प्रत्मथी / The Respondent. 3. आमकय आमुक्त(अऩीर) / The CIT(A)- आमकय आमुक्त / CIT 4. ववबागीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई / DR,
ITAT, Mumbai गार्ड पाईर / Guard file. 6. 3 सत्मावऩत प्रनत //// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt.