TMI Blog2016 (3) TMI 1018X X X X Extracts X X X X X X X X Extracts X X X X ..... and not one done with any malafide intention or with any intention to conceal. Whether a particular expenditure can be related to merger cost itself is debatable. In our opinion, levy of penalty ought not have been done on such amount. Levy of penalty relating to prior period expenditure admittedly the Tribunal in assessee’s appeal held the differential CST of ₹ 91,89,001/- to be an allowable claim. Vide the very same para it also held that differential property tax of ₹ 23,46,492/- to M/s. Nagar Nigam paid was also an allowable claim. CIT (A) at page 5 of his order in assessee’s appeal against levy of penalty, deleted the penalty levied of ₹ 1,49,658/- made for expenses relating to earlier years. What is left out of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the sum of ₹ 15,79,679/-. When the matter reached this Tribunal it deleted the disallowance made by the AO in full. Hence penalty levied on such amount cannot be sustained. Levy of penalty is deleted on all. - Decided in favour of assessee - I.T.A No.809/Bang/2010 - - - Dated:- 19-2-2016 - SHRI. ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI. VIJAY PAL RAO, JUDICIAL MEMBER For The Assessee : Shri. K. R. Pradeep, CA For The Revenue : Shri. G. R. Reddy, CIT-DR-I ORDER PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : In this appeal filed by assessee, it assails levy of penalty made u/s.271(1)(c) of the Income-tax Act, 1961 ( the Act in short), for the impugned assessment year which was confirmed by the CIT (A), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n off Rs.4,96,780/- (iv) Expenses relating to earlier years Rs.1,49,658/- 04. As per the Ld. AR, though penalty was levied on all the above amounts, CIT (A) in assessee s appeal against such levy had deleted penalty levied on prior period expenditure claim of ₹ 1,49,658/- while sustaining the penalty levied on the other three items. Further as per the Ld. AR quantum proceedings were carried in appeal before this Tribunal and this Tribunal in its order in ITA no.553/Mum/2006, dt.17.05.2013 had deleted the addition relating to differential Sales-tax payment of ₹ 91,89,001/- and differential property tax of ₹ 23,46,492/- paid to Nagar Ni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rger expenditure of ₹ 5,14,240/- disallowed by the AO was allowed for amortisation u/s.35DD of the Act. According to him just because assessee made a claim u/s.37(1) of the Act which was found to be allowable u/s.35DD of the Act, it could not be said that assessee had furnished any inaccurate particulars or made an illegitimate claim. 07. In so far as the last item of levy of penalty which was write off of bad debts of ₹ 28,22,667/- was concerned, Ld. AR submitted that CIT (A) had deleted the levy of penalty in so far as it related to irrecoverable debts of ₹ 15,79,670/-. Penalty sustained by the CIT (A) was only in relation to bad debts of ₹ 12,42,988/-. Even this disallowance was deleted by Tribunal on assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er expenditure of ₹ 15,99,298/- in its profit and loss account and suo motu added it back in its computation statement. As per the Ld. AR, merger related expenditure to the extent of ₹ 5,14,240/- was accounted by the assessee under various other heads which came to light only during the course of verification. Nevertheless what we find is that even for this amount assessee was eligible for claiming 1/5th write off u/s.35DD of the Act. Thus at the best, claim can be considered to be erroneously made and not one done with any malafide intention or with any intention to conceal. Whether a particular expenditure can be related to merger cost itself is debatable. In our opinion, levy of penalty ought not have been done on such amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, this Tribunal at para 3.3 of its order mentioned supra, sustained the order of CIT (A) wherein he deleted the disallowance to the extent of ₹ 33 lakhs. AO had disallowed the claim for a reason that it was a capital loss being an advance, given for acquiring capital asset. There is no finding by the lower authorities that the advances were not related to the business of the assessee. Whether write off of advance can be considered as a capital loss or revenue loss is, in our opinion, is a debatable issue not amenable to a levy of penalty. 14. Coming to the last item of write off of bad debts of ₹ 28,22,667/- disallowed by the AO on which penalty has been levied, CIT (A) in assessee s appeal had deleted the penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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