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2017 (12) TMI 1607 - AT - Income TaxEnhancement of income - Disallowance of expenditure relating to the levy of penalty by the Custom Authorities - Held that - Impugned disallowance could not have been made for the assessment year under consideration and, hence, we do not find any justification on the part of the CIT(A) in enhancing the income of the assessee on this account. This ground of appeal is allowed and the enhancement of ₹ 1 lac made by the Ld. CIT(A) into the income of the assessee is hereby set aside.
Issues:
Enhancement of income by ?1 lac by the Commissioner of Income Tax (Appeals) for disallowance of expenditure relating to penalty by Custom Authorities. Analysis: The appeal was filed against the order of the Commissioner of Income Tax (Appeals) regarding the enhancement of income by ?1 lac due to the disallowance of expenditure related to a penalty imposed by the Custom Authorities. The Counsel for the assessee requested to address this specific ground of appeal. The Counsel highlighted that the penalty was imposed in 2006, whereas the assessment under consideration was for the year 2000-01, and no such penalty-related expenditure was claimed during that period. The Departmental Representative supported the CIT(A)'s order. Upon reviewing the submissions, the Tribunal concluded that the enhancement of income for the penalty imposed in 2006 could not be justified for the assessment year 2000-01. Consequently, the Tribunal allowed the appeal, setting aside the ?1 lac enhancement made by the CIT(A). As the other grounds were not pursued, they were dismissed. The appeal was partly allowed, with the decision announced in the Open Court.
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