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2014 (7) TMI 860 - AT - Income TaxQuantum appeal set aside - Penalty u/s 271(1)(c) - Liquidated damages not declared Held that:- The Tribunal in earlier assessment year held that liquidated damages had not accrued to the assessee - assessee contended that the addition no longer subsists, thus, the penalty proceedings have no legs to stand - It is not a fit case for levy of penalty u/s 271(1)(c) of the Act since the addition made in the quantum proceedings has been deleted by the Tribunal decided in favour of Assessee. Interest on liquidated damages accrual of income - Held that:- The Tribunal in earlier assessment year, it has been held that on account of the letters exchanged between the parties there is an explicit agreement for not charging liquidated damages and interest which amounts to changing the terms of agreement in which event the interest component on the assumed liquidated damages cannot be added - the interest component of liquidated damages did not accrue to the assessee in the year and the AO is directed to delete the addition Decided in favour of Assessee.
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