Itxa/797/2016 Of Pr. Commissioner Of Income Tax-7 v. Onward E Wervices Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 797 OF 2016 Pr. Commissioner of Income Tax-7 .. Appellant v/s. Onward E Services Ltd. .. Respondent Mr. Suresh Kumar for the appellant Mr. Atul Jasani for the respondent CORAM : AKIL KURESHI & M.S. SANKLECHA, J.J. P.C. DATED : 11[th] DECEMBER, 2018. 1.This appeal is filed by the Revenue to challenge the judgment ofthe Income Tax Appellate Tribunal (“the Tribunal” for short), dated31.7.2015. 2.Following question is presented for our consideration :- “Whether on the facts and in the circumstances of the case andin law, the Tribunal was justified in deleting the penalty leviedby the AO u/s 271(1)(c) of the Act without appreciating thefact that the Assessee had failed to prove as to whether theexpenses is allowable or not and also failed to produce anyauthenticated documentary evidence to support the claim?” 3.The issue pertains to penalty imposed by the Assessing Officerunder Section 271(1)(c) of the Income Tax Act, 1961 (“the Act” forshort), which was deleted by the CIT(A). In further appeal, by theimpugned judgment the Tribunal dismissed the Revenue's appeal.Hence, the present appeal. 4.In the judgment under challenge, the Tribunal has recorded thatthe assessee had made certain expenditure and claimed the same asrevenue expenditure. During the assessment, the same was treated ascapital expenditure and depreciation as per the rules was allowed. TheTribunal, therefore, was of the opinion that such dispute would not giverise to penalty proceedings. The only difference between the assesseeand the Revenue was whether the expenditure in question was revenuein nature or capital expenditure. Full matrix of the expenditure wasdisclosed in the return filed. Merely because the assessee's claim in lawwas not accepted, would not give rise to penalty proceedings. 5.We are in agreement of the view of the Tribunal. When fulldisclosures were made by the assessee and only dispute between theassessee and the Revenue was the treatment that the expenditure should receive, penalty proceedings were correctly set aside by CIT(A) and confirmed by the Tribunal. No question of law arises. 6.The tax appeal is dismissed. (M.S. SANKLECHA, J.) (AKIL KURESHI, J.)