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ATOTECH INDIA LTD. Versus ASSISTANT COMMISSIONER OF INCOME-TAX

2015 (11) TMI 574 - ITAT DELHI

Penalty under section 271(1)(c) - allowability of business losses under a particular head of brought forward losses or the other head of brought forward losses - Held that:- he assessee has disclosed all material facts relevant for its assessment to the Assessing Officer at the time of assessment itself. It is a case of honest difference of opinion between the assessee and the Revenue regarding allowability of business losses under a particular head of brought forward losses or the other head of .....

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er section 271(1)(c) of the Act on its merits, we are not adjudicating the other legal issues raised by learned counsel for the assessee on the legality of the penalty order. - Decided in favour of assessee. - I. T. A. No. 1025 /Del/ 2010 (assessment year 2004-05). - Dated:- 18-3-2015 - G. C. GUPTA (Vice-President) and SMT. B. C. MEENA (Accountant Member) Salil Kapoor and Vikas Jain for the appellant. Ms. Y. Kakkar for the respondent. ORDER 1. The order of the Bench was delivered by 1. G. C. Gup .....

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for the assessee submitted that the assessee has carried forward losses and unabsorbed depreciation prior to the financial year 2001-02. He submitted that during the period relevant to assessment year 2002-03, there was a change in shareholding of the assessee-company. He submitted that the assessee has set off business income of ₹ 1.85 crores during the relevant assessment year 2004-05 and had set off the brought forward losses to that extent. The assessee, during the course of assessment .....

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in the shareholding of the company was specifically mentioned. This letter of the assessee dated December 13, 2006 was accepted by the Assessing Officer and the assessed income and returned income of the assessee had remained the same at nil. He submitted that the conduct of the assessee was bona fide as it has taken legal opinion from the esteemed M/s. Bansi S. Mehta and Co., Mumbai, dated June 15, 2001 wherein they had opined regarding the allowability of the business income set off against th .....

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e decision of the hon'ble Delhi High Court in the case of Ms. Madhushree Gupta v. Union of India [2009] 317 ITR 107 (Delhi), 155. He submitted that the charge in this case was that of furnishing of inaccurate particulars of income and the penalty was levied by invoking Explanation 1 to section 271(1)(c) of the Act, which is a deeming provision for concealment of income and not for furnishing of any inaccurate particulars of income. He submitted that the amount in question was neither added n .....

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hon'ble Delhi High Court in CIT v. Harnarain I. T. A. No. 2072/2010, CIT v. Shyama A Bijapurkar I. T. A. No. 842 of 2010 and of the Income-tax Appellate Tribunal in the case of ACIT v. A. B. Movies P. Ltd. I. T. A. No. 432/Del/2009. Alternatively, he argued that no tax was sought to be evaded and therefore, no penalty could be levied. 5. The learned Departmental representative vehemently opposed the submissions of learned counsel for the assessee. She submitted that the return of income was .....

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as old as dated June 15, 2001. She submitted that it is a case of clear violation of the provisions of section 79 of the Income-tax Act, 1961 and, therefore, the penalty was rightly levied under section271(1)(c) of the Act. She relied on a series of decisions in support of the case of the Revenue as under : (1) CIT v. Smt. Santosh Sharma [2009] 311 ITR 353 (Delhi) ; (2) CIT v. Pearey Lal and Sons (EP) Ltd. [2009] 308 ITR 438 (P&H) ; (3) CIT v. Gold Coin Health Food P. Ltd. [2008] 304 ITR 308 .....

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h S. Shah v. ITO [2013] 213 Taxman 43 (Guj) (Mag.) ; (12) CIT v. Morgan Finvest P. Ltd. [2013] 213 Taxman 23 (Delhi) (Mag) ; (13) K. P. Madhusudhanan v. CIT [2001] 251 ITR 99 (SC) ; (14) CIT v. R. M. P. Plasto P.Ltd. [2009] 313 ITR 397 (SC) ; (15) U. P. Matsya Vikas Nigam Ltd. v. CIT [2014] 41 taxmann.com 447 (All) ; and (16) CIT v. HCIL Kalindee Arsspl [2013] 37 taxmann.com 347 (Delhi). 6. She referred to the relevant portion of the order of the Assessing Officer and the Commissioner of Income- .....

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550 (Delhi). 8. We have considered the rival submissions and perused the order of the Assessing Officer and the Commissioner of Income-tax (Appeals) and also copies of various documents filed in the compilation filed before us. We find that the assessee has claimed the set off of its business income at ₹ 1.85 crores against the brought forward business losses of the earlier years. This claim of the assessee was based on the legal opinion received by the assessee from the firm M/s. Bansi S. .....

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e. It is not the law that wherever there is an addition or disallowance made by the Revenue, the assessee should be held liable for penalty under section 271(1)(c) of the Act. The issue could not be said to be non-debatable as the business loss could be adjusted against the brought forward business loss in certain conditions as detailed by the consultant in their letter dated June 15, 2001. We find that the loss was allowed to be carried forward in the earlier assessment years in the case of the .....

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ance with law. The assessed income and returned income in this case was nil. The only material change was that the business income was set off by the assessee against the brought forward business losses of the earlier years in the return of income and, thereafter, was claimed to be set off against another head of unabsorbed depreciation. The argument of the learned Departmental representative, that the assessee could not show that from which source it has received the changed legal opinion which .....

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