DCIT 10(1), MUMBAI vs. ALL SERVICES GLOBAL P. LTD ( FORMELRY KNOWN AS ALL SERVICES UNDER 1 ROOF INDIA P.LTD), MUMBAI

Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा सद�य सद�य राजे�� राजे�� केकेकेके अनुसार अनुसार PER RAJENDRA, AM- लेखा लेखा लेखा सद�य सद�य राजे�� राजे�� अनुसार अनुसार Challenging the order dt.06.05.2013 of CIT(A)-21,Mumbai,the Assessing Officer(AO) has filed the present appeal. 2.Assessee-company,engaged in the business of facility management and manpower recruit -ment,filed its return of income on 29.09.2009,declaring income at Rs.4.73 Crores.The AO completed the assessment on 05.12.2011,u/s. 143(3) of the Act determining the income of the assessee at Rs.4.62 Crores. During the assessment proceedings,the AO made certain disallowances/additions amounting to Rs.28.84 lakhs(Preliminary Expenses of Rs.41,500/-,Payment of employees’ contribution to PF after stipulated date-Rs.9.49 lakhs,share issue expenses-Rs.8.70 lakhs,difference in AIR information-Rs.1.73 lakhs and disallowance of Rs.4.49 lakhs u/s.14A of the Act).Aggrieved by the order of the AO,the assessee preferred an appeal before the First Appellate Authority (FAA),who confirmed the addition/disallowances made by the AO.The assessee did not agitate the matter before the Tribunal with regard to the additions. Meanwhile the AO initiated penalty proceeding u/s.271(1)(c)of the Act for furnishing inaccurate particulars of income.After considering the submissions of the assessee,the AO held that during the assessment proceedings delayed payment of PF was treated as income from other sources,that share issue expenses were treated as capital expenditure as against the revenue expenditure claimed by the assessee,that the assessee had not furnished any explanation with regard to the AIR difference of Rs.1.73 lakhs,that a disallowance of Rs.4.49 lakhs was also made u/s.14A r.w.rule 8D during the assessment proceedings.He imposed a penalty of Rs.8.44 lakhs u/s.271 (1)(c)of the Act,for furnishing inaccurate particulars of income. 3.During the appellate proceedings,before the FAA,the argued that certain additions/ disallow -ances were made by the AO,that such disallowance should not result in automatic levy of penalty,that it had incurred all the expenses for carrying out the business,that the question with regard to share issue expenses was a debatable issue and penalty was not leviable in such matters.After considering the 5328-All Services Global -09-10 submissions of the assessee,the FAA held that disallowance u/s.14A,preliminary expenses and issue of non reconciliation of AIR informati-on were the legal issues,that expenditure incurred on account of issuing shares was debatable. Finally,the FAA deleted the penalty levied by the AO relying upon the judgment of Reliance Petroproducts Pvt.Ltd.(322ITR158). 4.Before us,the Departmental Representative(DR)stated that the assessee had not reconciled the difference of AIR information,that additions made by the AO were confirmed by the FAA were not contested by the assessee.Authorised Representative(AR)argued that the addition in quantum proceedings did not prove that the assessee had filed inaccurate particulars.On a specific query by the Bench he admitted that on explanation was filed about the difference in AIR information before the FAA and that the assessee was aware about the adverse inference drawn by the AO in that regard during the assessment proceedings. 5.We have heard the rival submissions and perused the material before us.We find that the AO had made certain allowances and additions while finalising the assessment,that the FAA confirmed the additions/disallowances.We are of the opinion that the mere confirmation of additions/disallowances should not and do not result in concealment penalty,as the assessment and penalty are two different proceedings.Decision taken by the AO or FAA or the Tribunal in quantum may be helpful to decide the issue of imposing penalty. But,it is not the sole criteria.Explantion filed by the assessee during penalty proceedings have to be compulsorily considered.In the case under consideration the assessee had filed all the details and the AO had not doubted the incurring of expenditure.There was difference of opinion between the AO and the assessee as how to treat a particular item of expenditure.The assessee claimed some expenses as revenue,whereas the AO treated it capital in nature.In our opinion addition made on that account was justified,but no penalty for filing inaccurate particulars could be levied for it.Similarly,for the disallowance made u/s.14A r.w.r.8D no concealment penalty is leviable.Besides,the stand taken by the AO with regard to the Preliminary Expenses and Payment of employees’ contribution could be considered valid for quantum but claim for such expenses should not be visited by penal provisions.As far as difference about AIR information is concerned we find that the assessee had failed to file any explanation in that regard before the AO or the FAA during penalty proceedings.Therefore,partly confirming the order of the FAA,we hold that penalty levied for all other items except for difference of AIR information,was rightly deleted by her.We uphold the order of the AO with regard to AIR information difference.Effective ground of appeal