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2016 (3) TMI 1018 - ITAT BANGALORE

2016 (3) TMI 1018 - ITAT BANGALORE - TMI - Penalty made u/s.271(1)(c) - merger expenses - Held that:- Assessee had shown a merger 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 a .....

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ferential 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 the above amounts is ₹ 4,96,780/- being obsolete stock written off and ₹ 37,06,054/- bein .....

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at such a claim is far fetched or an illegitimate one. Just because the claim was disallowed, in our opinion, penalty ought not have been levied on the said amount.

Disallowance towards advance to Balbir Distilleries which was written off by the assessee, this Tribunal 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 ass .....

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t 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 pen .....

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im of advance / bad debt write off of ₹ 28,22,667/-. Ld. AR submitted that out of the above amounts, prior period expenditure originally claimed consisted of three items listed as under : (i) Advance to M/s. Balbir Distilleries Rs.37,06,054/- (ii) Various payments made in earlier years and shown as advances in the assessee s books Rs.1,41,05,273/- (iii) Prior period expenses Rs.1,49,658/- 03. As per the Ld. AR, CIT (A) on assessee s appeal against disallowance relating to above prior perio .....

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inst 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 Nigam. Thus according t .....

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Tribunal only for a reason that assessee could not produce documentary proof for justifying its claim. But this, according to him, would not mean that the claim made was unlawful or with any malafide intention. 05. Coming to the next item of penalty which was on the advance to Balbir Distilleries of ₹ 37,06,054/- written off by the assessee, Ld. AR submitted that out of the said amount the CIT (A) had deleted the disallowance of ₹ 33,30,000/- in quantum appeal and only ₹ 3,76,0 .....

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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 i .....

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ble jurisdictional High Court in the case of CIT v. Manjunatha Cotton and Ginning Factory, order of penalty ought not be sustained. 09. Per contra Ld. DR submitted that assessee had furnished inaccurate particulars in so far as its claim for merger expenses of ₹ 5,14,240/- was concerned. Assessee had shown merger expenses other than the above sum of ₹ 5,14,240/- separately and added back in its computation. However, the sum of ₹ 5,14,240/- which was also merger related expendit .....

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n the case of assessee was justified. 10. We have perused the orders and heard the rival submissions. In so far as levy of penalty for merger expenses is concerned, what we find is that assessee had shown a merger 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 .....

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ating to prior period expenditure of ₹ 1,25,57,985/-, admittedly the Tribunal in assessee s appeal vide para 5.4.10 of its order, 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 .....

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