TMI Blog2010 (11) TMI 1003X X X X Extracts X X X X X X X X Extracts X X X X ..... 271AA and in the second appeal directing the Assessing Officer to allow the deduction under section 80HHE on the basis of adjusted book profits under section 115JB of the Income Tax Act for the assessment years 2002-03 and 2003-04 respectively are challenged. 3. These appeals have been heard together and are being disposed of by this single order for the sake of convenience. I.T.A. No. 1126/Mds/2010 for the assessment year 2002-03 4. Facts indicate that the assessee company is engaged in the business of exporting engineering design services to its group companies. The assessee field its return of income on 31.10.2002 declaring income at Rs. Nil. The assessment was completed under section 143(3) on 28.12.2004. The assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of penalty, he, on merit deleted the penalty by recording the contention in para 5 and concluding in para 5.1 of his order. Para 5 and 5.1 are reproduced as under: 5. The next ground pertains to deletion of penalty on merits. In this regard, the contentions of the appellant are as under: The assessment order does not contain any indication that penalty proceedings are to be initiated. Section 271AA envisages the levy of penalty for violation of Sec.92D. Section 92 D prescribes maintenance of a record of all details and particulars pertaining to international transactions, with which the assessee is engaged in. Section 92E further mandates a Chartered Accountant s certificate to be filed alongwith the return of income, ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t order passed without considering the replies filed by the assessee is a nullity . 5.1 I have carefully considered the facts of the case, the contentions of the ld. AR, transfer pricing order and the penalty order. I have also gone through the decisions relied on by the ld. AR. It is well settled that provision dealing with penalty should be strictly construed. They are to be construed within the terms and language of the particular statute. Penalty under section 271AA is leviable for failure to keep and maintain information and documents in respect of international transactions, as required by sec.92 D(1) or 92D(2) of the Act. In the instance case, the TPO (the Addl. CIT) has not observed any discrepancy in the maintenance of recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuments in respect of international transactions as per the requirement of section 92D. The assessee has also not furnished the comparable data to support the transactional nor marginal method so penalty proceedings were rightly initiated and after issuing notice, penalty has been lawfully imposed. The ld. CIT(A) has just deleted the penalty without considering these aspects when even before the ld. CIT(A), the assessee has not been able to produce necessary material as required under relevant provisions. Therefore, penalty is exigible in this case, which has rightly been imposed and the ld. CIT(A) was not justified in deleting the same. It was, thus, urged for setting aside the order of the ld. CIT(A) and restoring that of the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has appropriately dealt with the issue as reproduced in earlier part of the order in which no fault has been found. Therefore, while concurring with the findings of the ld. CIT(A), we upheld the action of the ld. CIT(A) and dismiss the appeal of the Department being devoid of any merits. I.T.A. No. 1127/Mds/2010 for the assessment year 2003-04 8. Facts indicate that the assessee company is engaged in the business of exporting engineering design services to its group companies. The assessee company filed its return of income for the assessment year 2003-04 on 31st October, 2003 declaring NIL income after adjusting carried forward business loss. The assessee had claimed deduction under section 80HHE on the book profit for the cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the claim of deduction u/s. 80HHE of the appellant while computing book profits is covered by the judgment of the Hon ble ITAT, Chennai in its own case for assessment year 2002-03 in I.T.A. Nos. 347/Mds/2006 dated 21.09.2007. Therefore, respectfully following the above decision as well as the other decisions of the Hon ble Madras High Court and other ITATs cited by the ld. AR, I direct the AO to allow the deduction u/s. 80HHE on the basis of adjusted book profits u/s. 115JB of the Act. Therefore, the appellant succeeds on this ground. 9. Aggrieved by this order of the ld. CIT(A), the Department has come up in appeal and it was contended that the ld. CIT(A) has erred in directing the assessing office to allow the deduction u ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
