31 December 2013
Query is on Penalty under Section 271 (1)(c) In the search initiated in the Business Premises of assesse and his residence. Two assessee where selected for the Block. Company and the individual who is also director & shareholder of the company. During search some additional amount disclosed by the Assessee Company and accordingly expenditure also booked in the form of remuneration to the director. Assessing officer imposed penalty on the additional amount disclosed by the company without giving effect of additional expenditure claimed by the company and also imposed penalty in case of director for additional income i.e. remuneration. My questions: 1 whether assessee company can claim additional expenditure 2 AO penalised the additional income in the hands of company and also expenditure which is the income of the director also penalised whether it is justified?
Example of the case In case of Company Particular Original Return Revised Return Penalty on Sales 1000 2000 1000 Less: Exp(Remuneration) 500 600 Net taxable 500 1400 In case of Director Remuneration 500 600 100
Note: Penalty imposed by AO on sales instead of the net taxable income Is there any judicial pronouncement
02 January 2014
The additional expenditure may be claimed by the company and shall be allowed by the AO, but the penalty shall be imposed on the same on director.
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