Deep Industries Limited,, Ahmedabad vs Department Of Income Tax

ी एन0एस0 सैनी, लेखा सद य एवं ी कुल भारत, या%यक सद य के सम& BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER आयकर अपील सं./ ITA No. 2080/Ahd/2011 %नधा)रण वष)/Assessment Year: 2004-2005

ACIT(OSD) Deep Industries Ltd. Range-1, Ahmedabad. Vs 6th Floor, Astron Tower, Opp: Fund Republic Cinema S.G.Highway, Ahmedabad.

PAN : AAACD 6951 E

अपीलाथ,/ (Appellant) -.यथ,/ (Respondent)

Revenue by : Shri M.K. Singh, Sr. DR. Assessee(s) by : Shri Sakar Sharma

सन ु वाई क तार ख/ Dateof Hearing : 13/02/2015 घोषणा क तार ख / Date of Pronouncement: 20/02/2015

आदे श/O R D E R

PER N.S. SAINI, ACCOUNTANT MEMBER: This is an appeal filed by

the Revenue against the order of the Commissioner of Income-Tax (Appeals)-VI, Ahmedabad dated 14.6.2011.

2. The sole ground taken by the Revenue reads as under:

"1. The Ld. CIT(A) erred in law and on the facts in deleting the penalty u/s.271(1)(c) levied by AO on account of foreign travel expenses of Rs.10,72,714/-."

3. The appeal filed by the Revenue is barred by limitation by 21 days. The Revenue has filed a condonation petition requesting for condonation of delay and admission of appeal for hearing. We are satisfied that there was reasonable cause for not presenting the appeal ITA No.2080/Ahd/2011 2

before the Tribunal in time. Hence, we condone the delay and admit the appeal for hearing.

3. We have heard rival submissions and perused the orders of the lower authorities, and materials available on record. In the instant case, the penalty under section 271(1)(c) of the Act of Rs.10,72,714/- was levied by the AO on the ground of disallowance of foreign travel expenses in the assessment made under section 143(3) of the Act.

4. On appeal, the CIT(A) deleted the aforesaid levy of penalty by observing as under:

"On the third addition of disallowance of foreign travel expenses, assessing officer levied penalty, though it was not initiated in the assessment order, on the ground that appellant was not able to substantiate the claim. However appellant submitted in detail the purpose of foreign travel, details of expenses, board resolution, foreign suppliers, and copy of foreign tour reports of directors. Appellant explained in detail the purpose of foreign travel which is relating to the business of the appellant i.e. survey of equipments related to gas compression, risk etc. considering these details, it cannot be said that appellant was not able to substantiate the claim of foreign travel expenses made by it. In any case mere disallowance of expense will not automatically result in levy of penalty. The decision of honourable Supreme Court in the case of Reliance petro products private Ltd, 322 ITR 158 is clearly applicable on the issue. Respectfully following the same, the penalty levied by the assessing officer on this issue is also deleted."

5. Before us, the DR submitted that in the quantum appeal, the Tribunal has confirmed part of disallowance and in respect of remaining part, restored the matter back to the file of CIT(A) for fresh adjudication, and therefore, the penalty order also should be restored to the file of the CIT(A).

6. On the other hand, AR vehemently supported the order of the CIT(A).

ITA No.2080/Ahd/2011 3 7. We find that DR could not point out any specific error in the order of the CIT(A) in deleting the penalty. We find that the DR could not controvert the findings of the CIT(A) that no penalty under section 271(1)(c) of the Act was initiated during the course of assessment proceedings in respect of disallowance of foreign travel expenses. In the above circumstances, we do not find any good reason to interfere with the order of the CIT(A). Thus, this ground of the Revenue is dismissed.

8. In the result, the appeal of the Revenue is dismissed.

Order pronounced in the Court on Friday the 20th February, 2015 at Ahmedabad.

Sd/- Sd/- (KUL BHARAT) ( N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER