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2015 (10) TMI 2239 - AT - Income TaxPenalty u/s. 271(1)(c) - Company has claimed deduction of expenditure toward payment made to employees under Voluntary Separation Scheme - Held that:- Section 35DDA pre-supposes that there is a continuance and existence of business for next relevant years on going concern concept basis, which is not the fact in the assessee’s case. Here, the Govt. of India has decided to close the business and the scheme is not voluntary in nature. It was compulsory and was to be opted by all the employees and if it is not available by certain employees, then in that circumstance, those employees will be compulsorily retrenched. Hence, from the spirit of the scheme, it is seen that it is not voluntary in nature and accordingly, in the circumstances, when the assets are in the process of being sold out, the employees are made to go and the business is being in the process of closure down. In these circumstances, the appellant’s contention that their case is not covered by the scheme contemplated by section 35DDA has to be accepted. - Decided in favour of assessee. Penalty imposed u/s. 271(1)(c) - once the impugned addition on the basis of which the penalty was imposed by the Assessing Officer, stands deleted by us, there remains no justification to hold that the assessee had furnished inaccurate particulars of its income. Therefore, the very basis for imposition of penalty stands collapsed. We, therefore, find no reason to interfere with the order of the ld. CIT(A) in deleting the impugned penalty imposed u/s. 271(1)(c) - Decided in favour of assessee.
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