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A.C.I.T., Range-V, Lucknow Versus M/s PTC Industries Ltd.,

2015 (12) TMI 963 - ITAT LUCKNOW

Penalty u/s 271(1)(c) - claim of revenue expenditure u/s 35(2AB) disallowed - Held that:- The claim of the assessee was not accepted by the Assessing Officer for the sole reason that the assessee could not get the approval from DSIR till completion of scrutiny assessment proceedings and therefore, in the facts of the present case, this judgment of Hon'ble Apex Court in CIT vs. Reliance Petroproducts [2010 (3) TMI 80 - SUPREME COURT ] wherein it was held that merely because of the assessee's clai .....

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P. K. Tandon, Advocate ORDER PER A. K. GARODIA, A.M. Both these appeals are filed by the Revenue for the same assessment year i.e. 2010-2011 and out of these two appeals, one appeal i.e. I.T.A. No.728/Lkw/2014 is in quantum proceedings and the second appeal i.e. I.T.A. No.729/Lkw/2014 is in course of penalty proceedings u/s 271(1)(c) of the Act. Both the appeals were heard together and are being disposed of by way of this common order for the sake of convenience. 2. First we take up the appeal i .....

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se of assessment proceedings, the assessee did not file any such Form- 3CL received from Ministry of Science & Technology, Department of Scientific and Industrial Research, New Delhi. 2. The Commissioner of Income-tax (Appeals), Lucknow has erred in law and on facts of the case to decide the issues involved in the assessment order u/s 143(3) of the Act dated 30.01.2013 ignoring the fact that no appeal was filed before him against the said order. 3. The Commissioner of Income-tax (Appeals), L .....

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der of the Assessing Officer u/s 154 whereas Learned A.R. of the assessee supported the order of learned CIT(A). 4. We have considered the rival submissions. First of all, we find that as against the deduction allowed by the Assessing Officer to the extent of ₹ 27.43 lacs, the CIT(A) has allowed deduction to the extent of ₹ 37.38 lac and therefore, it is seen that the extra deduction allowed by CIT(A) is to the extent of ₹ 9.95 lacs only. The tax effect on this relief of ₹ .....

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leting the penalty of ₹ 10,02,053/- imposed u/s 271(1)(c) of the Income-tax Act, ignoring the facts that the assessee has claimed the deduction u/s 35 (2AB) in excess and that while calculating the deduction u/s 35(2AB) it did not exclude the amounts of revenue expenditure which were not eligible for the claim of deduction u/s 35(2AB) of the Income-tax Act. 7. Learned D.R. of the Revenue supported the penalty order whereas Learned A.R. of the assessee supported the order of learned CIT(A). .....

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8377; 32,42,889/- (150% deduction claimed at ₹ 21,61,926/-). The appellant has disclosed in its return of income in respect of the expenses claimed and shown in its return of income but the A.O. has found the same as disallowable expenses in the absence of approval/ sanction of Secretary, DSIR, New Delhi. The said approval was received by appellant from Secretary, DSIR, New Delhi vide letter dated 06.02.2013. In said approval letter the Secretary, DSIR has granted the approval of revenue e .....

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uantum of revenue expenses allowed by Secretary, DSIR of ₹ 37.38 lacs vide letter dated 06.02.2013. It is worthwhile to mention here that the said letter was received well before the passing the present penalty order u/s 271(1)(c) of I.T. Act and the letter was submitted before A.O. by appellant during penalty proceedings but the A.O. has over-looked the quantum of revenue expenditure approval i.e. 37.38 lacs. As mentioned above the appellant has furnished each detail/ information in respe .....

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were incurved and recorded in its books of accounts. The A.O. has never doubted the genuineness and correctness of the Revenue expenditure claimed and shown by appellant on which penalty was levied. Only sole reason to impose the penalty u/s 271(1)(c) was that necessary approval from DSIR received till completion of scrutiny assessment order. Therefore, I hold that the appellant's case does not deserve to impose the penalty u/s 271(1)(c) and the penalty levied by A.O. of ₹ 10,02,053/- .....

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vt. Ltd. (2010) 36 DTR 449 (SC). Held: Merely because of the assessee's claim deduction of the interest of expenses which has not been accepted by revenue penalty u/s 271(1)(c) not attracted, merely making of the claim, which is not sustainable in law by itself will not amount furnishing inaccurate particulars regarding the income of assessee." (v) CIT Vs. Asim Kumar Agarwal (2005) 275 ITR 48 (Jharkhand) Held: That no penalty unless there is a deliberate attempt on part of assessee. Mer .....

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of ₹ 10,02,053/-is hereby cancelled. 8.1 From the above paras from the order of learned CIT(A), we find that the relief was allowed by CIT(A) on the basis that the assessee was under bonafide belief that his claim of revenue expenditure u/s 35(2AB) was genuine as per the provisions of the Act, although the approval DSIR was pending till completion of scrutiny assessment proceedings. He has also given a finding that the assessee has filed proper application for approval in the form of 3CL f .....

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