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2016 (5) TMI 1220 - ITAT MUMBAIPenalty u/s 271 (1) (c) - disallowance of provisions for discount - Held that:- From the order of the First Appellate Authority for the subsequent year i.e. AY 2008-09, we find that the assessee had taken additional ground vide para 9 at page 6 of the appellate order passed under section 250(6) praying before the First Appellate Authority to allow the provision for discount of ₹ 30,95,650/- disallowed in the assessment year 2007-08 for being contingent in nature. Para 3.3 at page 7 of the said order reveals that the assessee had created provisions for ₹ 30,95,650/- and out of which ₹ 8,23,376/- was passed on to the customers and remaining amount of ₹ 22,33,724/- was reversed and offered to tax in assessment year 2008-09. In para 3.5 of the said order, the assessee submitted that in case, the provision for discount is held to be contingent in nature in assessment year 2007-08, actual discount of ₹ 8,23,376/- passed on to the customers in assessment year 2008-09 should be allowed as expenditure in assessment year 2008-09 and further balance of ₹ 22,33,724/- which was suo motu reversed by the assessee in assessment year 2008-09 should not be taxed in assessment year 2008-09 as it has been already taxed in assessment year 2007-08. From para 12 at page 7 of the said order, we find that the ld. CIT(A) allowed the appeal of the assessee by directing the AO not to tax the provision in the subsequent year which was not allowed in the earlier years. Thus we are of the opinion that the penalty imposed u/s 271(1)( c ) and as sustained by the ld.CIT(A) is wrong and against the provision of law. - Decided in favour of assessee
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