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M/s Sidharth Soya Products Pvt Ltd (Now M/s Adm Agro Industries Kota And Akhola Pvt Ltd) Versus Deputy Commissioner Of Income Tax

2016 (3) TMI 580 - ITAT INDORE

Penalty u/s 271(1)(c) - disallowance of deduction u/s 80HHC for furnishing of inaccurate particulars of income - Held that:- The issue in controversy is covered by the decision of Hon'ble Madras High Court in the case of CIT vs. Caplin Point Laboratories Limited (2007 (6) TMI 38 - HIGH COURT, MADRAS ), wherein the Hon'ble Madras High Court has held that mere rejection of claim of assessee u/s 80HHC by relying on different interpretation did not amount to concealment or furnishing of inaccurate p .....

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he penalty of ₹ 3,40,000/- u/s 271(1)(c) of the Income-tax Act, 1961. 2. The brief facts of the case are that the assessee is a Private Limited Company engaged in the business of agro based industry having solvent extraction plant and refinery. The assessee filed its return of income for assessment year 2002-03 on 28.10.2002 declaring income of ₹ 42,30,741/- after setting off brought forward business loss and depreciation. The assessee company has shown income u/s 115JB of ₹ 1, .....

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s noticed that assessee was having other income to the tune of ₹ 47,57,465/- which included rent, dividend, misc. income, interest etc. and the assessee had not reduced 90% of these receipts for computing "profits of the business" for calculating deduction u/s 80HHC. The AO, accordingly, revised the allowable deduction u/s 80HHC(3) at ₹ 21,71,698/- and, thus, disallowed the deduction u/s 80HHC to the tune of ₹ 8,56,148/- (Rs. 30,27,846/- (-) ₹ 21,71,698/-). The .....

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or conclusion that the assessee is liable to be penalized on such additions made in the quantum proceedings. Penalty is to be levied only if an income has either been concealed or inaccurate particulars have been furnished in respect of any income. On the given facts, it would be noted that the assessee made a claim u/s BOHHC amounting to ₹ 30.27.846/-. However, the Assessing Officer in his wisdom reduced such claim to ₹ 21,71,698/-. The difference arose on account of various items .....

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r the benefit of section 80HHC or not. According to the assessee, all such items arose purely out of business transactions of the assessee. The export incentives received clearly fall under section 28 of the Income Tax Act and are treated as business income. However, a differential treatment to such export expenditure has been prescribed by the Finance Act retrospectively from 2005 onward. Insurance claim received is also another item which arise out of business transactions and has been taxed a .....

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ispute, as already stated, is with regard to the items of income, 90% of which were required to be reduced as per the opinion of Assessing Officer. However, according to the assessee, all such receipts were eligible for the benefit u/s 80HHC. The computation of claim u/s 80HHC had been certified by a Chartered Accountant who had also in his wisdom and opinion certified these receipts to be eligible for the benefit/reduction u/s 80HHC. The assessee has a legal right to make a claim, which accordi .....

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