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2007] 294 ITR 134 [2008] 174 TAXMAN 406 (MAD.) HIGH COURT OF MADRAS Commissioner of Income-tax v. Cafco Syndicate Shipping Co.* K. RAVIRAJA PANDIAN AND P.P.S. JANARTHANA RAJA, JJ. TAX CASE (APPEAL) NO. 942 OF 2007â-  JULY 23, 2007 Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 2002-03 - During survey of business premises of assessee-company, it was found that some of expenses claimed by it in its return of income were not supported by third party receipts, vouchers, etc. - Assessee, thereafter, filed a revised return admitting some additional income - Assessing Officer held that when expenses were not supported by proper vouchers, assessee should not have claimed same for deduction - He, therefore, held that assessee had concealed its income and, imposed on it penalty under section 271(1)(c) - Whether when books of account revealed that expenses were incurred by assessee, mere incapacity of assessee to produce proper vouchers for said expenses would amount to concealment of income so as to warrant imposition of penalty - Held, no - Whether therefore, Commissioner (Appeals) as well as Tribunal were justified in deleting penalty so levied - Held, yes FACTS The assessee-company was engaged in the business of clearing and forwarding of import and export cargo at Chennai Port. It had filed its return of income. During the course of survey at its business premises, it was noticed that some of the vouchers of expenses were self-vouchers and they were not supported by third party receipts, vouchers, etc. Thereafter, the assessee filed a revised return admitting some additional income. The Assessing Officer held that since the expenses were not supported by proper vouchers, the assessee should not have claimed the expenditure as deduction. He, therefore, held that the assessee had concealed its income, and imposed on it the penalty under section 271(1)(c). On appeal, the Commissioner (Appeals) deleted the penalty holding that the Assessing Officer had not proved that such expenses were not incurred by the assessee. On the revenue's appeal, the Tribunal held that mere addition of income by disallowing expenses…

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