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ACIT, Central Circle-2, New Delhi Versus M/s Essel Shyam Communication Ltd.

2015 (10) TMI 183 - ITAT DELHI

Penalty imposed u/s 271(1)( c) r/w section 274 - disallowing excess and incorrect deduction u/s 80IA on account of profit from trading of VSAT equipment , service charges for computer software updating of NMS, FDRs pledged with Bank for availing non fund based working capital limits treating it as income from other sources and profit earned from segment charges - CIT(A) deleted penalty levy - Held that:- The issue of penalty is consequential to the disallowance/addition made in the quantum proce .....

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rding due opportunity of hearing for the assessee and keeping in view the outcome of quantum proceedings orders by respective quasi-judicial and judicial forums and without being prejudiced from the earlier penalty and impugned appellate orders. - Decided in favour of revenue for statistical purposes - I.T.A.No.4356/Del/2011 - Dated:- 5-8-2015 - SHRI N.K. SAINI AND SHRI CHANDRA MOHAN GARG, JJ. For The Appellant : Smt. Parwinder Kaur, Sr. DR For The Respondent : Shri Ved Jain, CA ORDER PER CHANDR .....

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tances of the case, the CIT(A) has erred in law and on facts in cancelling the penalty of ₹ 68,56,155/- imposed by the Assessing Officer u/s 271(1)(c) of the Income Tax Act, 1961. 2. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in holding that making claim which is not sustainable in law by itself will not amount to furnishing of inaccurate particulars of income. 2. We have heard arguments of both the sides and carefully perused the relevant m .....

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SAT equipment of ₹ 50,42,717/-, service charges for computer software updating of NMS of ₹ 57,58,000/-, FDRs pledged with Bank for availing non fund based working capital limits of ₹ 8,38,626/- treating it as income from other sources and profit earned from segment charges of ₹ 25,94,935/-. Ld. DR further submitted that the AO after considering and rejecting the submissions and explanation of the assessee imposed a penalty of ₹ 68,56,155/- on the assessee u/s 271(1) .....

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. 4. Replying to the above, ld. Counsel of the assessee reiterated its argument submitted in the form of written synopsis/arguments and submitted that the AO had made disallowance u/s 80IA of the Act in respect of four issues viz. income from software division, income from trading of VSAT equipment, income from interest and service income earned from segment charges. Ld. Counsel further pointed out that the assessee filed an appeal against the assessment order before the CIT(A) and deleted the a .....

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ore the ITAT, the AO passed impugned penalty order on 25.3.2010 levying penalty of ₹ 45,70,770/- by holding that the assessee furnished inaccurate particulars of income in respect of ₹ 1,16,39,343/- by claiming deduction u/s 80IA(4) of the Act. Ld. Counsel further pointed out that the ITAT vide its consolidated order dated 31.3.2010 dismissed the appeal of the revenue and also deleted the disallowance of deduction u/s 80IA of the Act in respect of income from trading of VSAT equipmen .....

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the factual matrix relating to the interest income and expenditure thereon. Ld. Counsel pointed out that the issue of interest has to go to the file of AO for proper verification and examination to follow the directions of Hon ble High Court. 5. Ld. Counsel further contended that the assessee has fully and truly disclosed all necessary facts in the details filed along with return of income and in the computation and also filed certificate required for claiming exemption u/s 80-IA(4) of the Act. .....

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t. 6. Ld. Counsel also placed reliance on the decisions of Hon ble Supreme Court in the case of Reliance Petroproducts Pvt. Ltd. 230 CTR 320 (SC) and submitted that every disallowance does not attract penalty u/s 271(1)(c) of the Act and merely because the claim of the assessee was not accepted or was not found to be acceptable by the revenue does not automatically attract penalty u/s 271(1)(c) of the Act. Ld. Counsel submitted that since the orders of AO/CIT(A) and Tribunal are awaited on all f .....

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d. DR fairly accepted that the issue of disallowance and addition on all four grounds/issues has not attained finality in the quantum proceedings and the issue of income from software division has been restored to the file of the AO by the Tribunal, issue of income from trading of VSAT equipment has been remitted to ITAT by Hon ble High Court, the issue of income from interest has been remitted to the Tribunal by Hon ble High Court which again requires examination at the end of AO in regard to f .....

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