Case Law Details
Bistro Hospitality Pvt. Ltd. Vs ACIT (ITAT Delhi)
ITAT Delhi held that imposition of penalty u/s 271(1)(c) of the Income Tax Act on the mere allegation that assessee failed to justify the revenue nature of the expenditure is unsustainable as penalty proceedings are independent of assessment proceedings.
Facts-
In the instant case the AO vide assessment order dated 29.12.2016 passed u/s 143(3) of the Act, made three additions i.e. (i) disallowance of service tax claimed in the P& L a/c at Rs. 40,45,470/-; (ii) addition on account of rejection of consumption of foods & beverages claimed at Rs. 4,07,09,028/-; and (iii) disallowance on account of certain expenses claimed as revenue at Rs. 22,27,702/-. The Assessee being aggrieved preferred first appeal before the Ld. Commissioner, who vide impugned order partly affirmed the additions, against which the Assessee has preferred the instant appeal.
Thereafter the AO vide penalty order dated 31.3.2019 passed u/s 271(1)(c) of the Act levied a penalty of Rs. 7,26,800/- in respect of affirmation of the addition of Rs. 2,03,54,514/- on account of disallowance (rejection of consumption claimed) and Rs. 22,27,702/-on account of disallowance (capital expenses), for concealment of income/furnishing of inaccurate particulars of income, on the ground that the Assessee has failed to justify the ‘revenue nature’ of the expenses and it is prima facie evident that the expenditure claimed are of enduring nature.
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