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2019 (7) TMI 983 - AT - Income TaxPenalty u/s. 271(1)(c) - expenses incurred for increase in share capital after amalgamation process, not covered u/s.35DD - HELD THAT:- No justification in sustaining the penalty. Further, we find the Hon'ble Rajasthan High Court in the case of CIT Vs. cosmopolitan Trading Corporation [2003 (7) TMI 14 - RAJASTHAN HIGH COURT] and in the case of CIT Vs. Prakash Industries Ltd [2009 (10) TMI 291 - PUNJAB AND HARYANA HIGH COURT] has held that when the entire additions had been deleted in the quantum appeal, no reason survives for sustaining the penalty. Thus, we sustain the deletion of penalty from the hands of assessee on this issue, Thus, ground No.1 of Revenue’s appeal is dismissed. Penalty on the issue of disallowance of warranty provision - HELD THAT:- This issue had been allowed for statistical purposes and the issue has been remitted back to the file of Assessing Officer. The issue of penalty is also therefore remitted back to the file of Assessing Officer in the interest of justice. The Assessing Officer shall adjudicate the issue as per law in conformity with the principles of natural justice. Thus, ground No.2 raised in appeal by the Revenue is allowed for statistical purposes. Penalty for disallowance on account of excess claim of VRS expenses disregarding the provisions of section 35DDA - HELD THAT:- Since this issue has been remitted back to the file of AO, similarly the issue of penalty is also remitted back to his file in the interest of justice and he shall adjudicate the issue as per law after complying with the principles of natural justice. Thus, ground No.3 raised in appeal by the Revenue is allowed for statistical purposes. Penalty for disallowance on account of inventory written off - HELD THAT:- As decided in own case [2013 (2) TMI 883 - BOMBAY HIGH COURT] Since in quantum appeal, the addition has been deleted, there is no justification in sustaining the penalty. We further find in the case of CIT Vs. cosmopolitan Trading Corporation [2003 (7) TMI 14 - RAJASTHAN HIGH COURT] and CIT Vs. Prakash Industries Ltd [2009 (10) TMI 291 - PUNJAB AND HARYANA HIGH COURT] has held that when the entire additions had been deleted in the quantum appeal, no reason survives for sustaining the penalty. Thus, we sustain the deletion of penalty from the hands of assessee on this issue, Thus, ground No.4 of Revenue’s appeal is dismissed. Penalty for disallowance on account of sale of scrap - HELD THAT:- Since this issue in quantum appeal has been restored to the file of AO for verification of the contentions of the assessee, thus in the interest of justice, the issue of penalty is also restored to the file of the Assessing Officer for proper adjudication as per law in compliance with the principles of natural justice. Penalty for disallowance on account of loss on sale of investment - HELD THAT:- CIT(Appeals) has categorically stated that the assessee has not suppressed any facts or details at any stage of proceedings either before the Assessing Officer or at the Appellate stage. The facts on records demonstrates specially from the findings of the CIT(Appeals) on the issue that there is no “concealment of income” or “furnishing of inaccurate particulars of income” by the assessee either before the Assessing Officer or before the CIT(Appeals). Relying on the decisions of the Hon”ble Supreme Court of India in the case of Price Waterhouse Coopers Pvt. Ltd [2012 (9) TMI 775 - SUPREME COURT] and in the case of Reliance Petro Products (P) Ltd. [2010 (3) TMI 80 - SUPREME COURT] CIT(Appeals) deleted the penalty from the hands of the assessee. Penalty for disallowance on account of advance to custom account and bad debts written off - Tribunal has dismissed this ground of the assessee on merits - HELD THAT:- We observe that proceedings on penalty stand on two parameters i.e. “concealment of income” or “furnishing of inaccurate particulars of income”. In the findings of the Ld. CIT(Appeals) itself has been stated that the assessee has neither concealed his income nor furnished inaccurate particulars of income. Thus, with regard to the deletion of penalty on the disallowance on account of “advance to customs account”, this issue is restored to the file of AO for proper adjudication as per law. Hence, this part of ground of Revenue’s appeal is allowed for statistical purposes. With regard to the deletion of penalty on account of “bad debts written off”, as per our aforesaid findings, we sustain the relief provided to the assessee by the Ld. CIT(Appeal). Thus, this part of ground of Revenue’s appeal is hereby dismissed.
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