Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Hindustan Fertilizers Corpn. Ltd. Versus D.C.I.T., Circle 12 (1) , New Delhi And Vica-Versa

2015 (10) TMI 2239 - ITAT DELHI

Penalty 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 i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion 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 i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lhi for the assessment year 2004-05, challenging the confirmation of disallowance of ₹ 90,40,000/- made by the Assessing Officer on account of expenditure incurred on payment made to employees under Voluntary Separation Scheme (hereinafter referred to as VSS ). The appeal No. 6083/Del./2013 has been preferred by the Revenue against the order dated 30.08.2013 passed by ld. CIT(A)-XV, New Delhi, challenging the deletion of penalty of ₹ 32,43,552/- levied u/s. 271(1)(c) of the IT Act fo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssessee was completed u/s. 143(3) vide order dated 15.11.2006, assessing the total income of ₹ 38,57,489/-. This assessment was revised by the learned CIT u/s. 263 of the Act vide order dated 23.03.2009 on the limited issue of deduction allowable u/s. 35DDA and restored the matter to the file of the Assessing Officer. Thereafter, the Assessing Officer after hearing the assessee passed fresh assessment order u/s. 143(3)/263 vide order dated 27.11.2009 by further making disallowance of ͅ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

/CO/Pers/P-68/2224 dated 25.09.2002, the appellant company was sanctioned VSS. As per these circulars, all the employees have to opt for voluntary separation under this scheme during this period. Workers not availing the offer of Voluntary separation during this period shall be paid retrenchment compensation under ID Act, 1947 after obtaining permission from the competent authority. Officers not availing of the offer of Voluntary Separation shall be governed by their terms of appointment. The ag .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of ₹ 32,43,552/- u/s. 271(1)(c) of the Act, representing 100% of the tax sought to be evaded by the assessee. The assessee preferred an appeal before the ld. CIT(A) against the penalty order, where the ld. CIT(A) deleted the penalty vide impugned order dated 30.08.2013. The Revenue was not satisfied with the order of CIT(A). Hence, this appeal before us. 4. The learned AR of the assessee submitted that the voluntary separation scheme of the Company was compulsory in nature to be opted by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hat as per decision of Govt. of India, Ministry of Chemicals & Fertilizers (Department of Fertilizers) following approvals were conveyed vide OM No. 39/23/94-FCA-1 Vol. IX dated 10.09.2002 : (i). Closure of HFC including all its units, offices and establishments; (ii). Disposal of assets of the company in accordance with the procedure prescribed under Sick Industrial Companies (Special Provisions) Act, 1985 and other applicable laws (iii). Remission of VSS benefits to all the employees of th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

also contended that the penalty imposed by the Assessing Officer u/s. 271(1)(c) has rightly been deleted by the ld. CIT(A). 5. The ld. DR, on the other hand, has relied upon the order of the lower authorities and submitted that the assessee has claimed an expenditure of ₹ 1.13 crores on account of payment to employees under VSS. This amount should have been deferred over the period of five years and 4/5th of the amount should have been added to the total income after allowing 1/5th u/s. 3 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

compensation under the Industrial Dispute Act after obtaining the permission from the competent authority - officers not availing voluntary separation shall be governed by their terms of appointment. This shows that the circular did provide other options for employees who did not opt for voluntary separation under this scheme. In view of these facts, it cannot be said that the scheme was compulsory in nature. Further, the assessee failed to explain how the deduction is allowable even if the sch .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rough the material available on record. We find that the assessee company is a government company and the same was closed as per Government order referred to above. The company had issued Voluntary Separation Scheme for their employees, which was applicable to all the employees as on that date. In this scheme, the Company has claimed deduction of expenditure of ₹ 1.13 crores toward payment made to employees under this scheme. For the sake of convenience we reproduce section 35DDA hereunder .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version