By TIOL News Service

AHEMDABAD, JAN 22, 2018: THE issue is - Whether an Assessee can claim his agreement towards impugned additions made by AO, as the basis to negate consequential penalty. NO IS THE ANSWER.

Facts of the case:

The Assessee-company, engaged in conceptualizing and organizing various events, had filed its return for the relevant AY, which ultimately resulted in an assessment, imposed a penalty pertaining to the quantum addition on account of cessation of liability. On appeal, the CIT(A) deleted the penalty.

ITAT held that,

++ the second quantum disallowance item is cessation of liability amounting to Rs.333500/-. The assessee’s case is that these amounts were outstanding in its book since long as payable to its customers/party plot owners. It emerges that the assessee could not even state details of its relevant customers to whom it owed the money in question. It is noticed that the very factual position has continued in the impugned penalty proceedings. Therefore, there is no merit in Assessee's contention that the mere fact of the impugned addition being an agreed one would render the corresponding penalty unsustainable. Therefore, this court adopt consistency in the instant facts as well for affirming the lower authorities’ action imposing the penalty in question.

(See 2018-TIOL-128-ITAT-AHM)