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Asiatic Colour Chem Indu. Ltd. Versus CIT, Ahmedabad

2016 (9) TMI 459 - ITAT AHMEDABAD

Penalty imposed u/s.271(1)(c) - exclusion of interest income and miscellaneous income for the purpose of deduction u/s.80IA - Held that:- CIT(A) has held that the amounts representing interest and miscellaneous income for which assessee has claimed deduction u/s.80IA but was not granted by the A.O., would not be considered as furnishing of inaccurate particulars or concealment of income. As far as the other two items are concerned i.e. Duty Draw Back and sale proceeds of DEPB license are concern .....

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rat High Court in the case of India Gelatine & Chemicals Ltd., reported in (2004 (4) TMI 20 - GUJARAT High Court ) was in favour of the assessee. Therefore, at that time, it was a quite debatable issue. The ld. CIT(A) has observed that in view of the decision of Hon’ble Supreme Court in the case of Pandian Chemicals Ltd. v CIT (2003 (4) TMI 3 - SUPREME Court ) or in the case of CIT v. Sterling Foods (1999 (4) TMI 1 - SUPREME Court) assessee ought to have not made this claim is concerned that ins .....

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it emerges out that against the original disallowance the issue travelled up to the Tribunal. The Tribunal has set aside the matter to the Assessing Officer. In the fresh assessment order, ld. A.O. has not initiated penalty proceedings against the assessee u/s.271(1)(c) of the Act. The A.O. has nowhere in the assessment order observed that the penalty proceedings against the assessee would be taken up. Therefore, no penalty can be imposed upon the assessee on this issue. In view of above, no pen .....

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ed for A.Y. 2001-02. 2. Solitary grievance of the assessee is that the ld. CIT(A) has erred in confirming the penalty imposed u/s.271(1)(c) of the Income Tax Act. 3. The brief facts of the case are that the return of income was filed by the assessee on 01.02.2002 declaring total income of ₹ 1,16,780/-. The assessment order was passed u/s.143(3) of the Income Tax Act on 26.03.2004 determining the total income at ₹ 59,34,440/-. Assessee carried the dispute up to the Tribunal and the Tr .....

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a penalty of ₹ 13,50,559/- vide order dated 30.03.2006. The assessee challenged the penalty order before the ld. CIT(A). The appeal of the assessee was dismissed vide order dated 08.11.2006 because the authorized person did not sign the appeal memo. Against this order, assessee went to the Tribunal. The Tribunal has allowed the appeal vide order dated 27th August, 2010 and set aside the order of ld. CIT(A) and restored the issues back to the file of ld. CIT(A) with a direction that assess .....

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, it would reveal that basically ld. A.O. has levied penalty for two reasons, namely, (a) the claim of deduction made by assessee u/s.80IA of the Act has not been approved to the extent of ₹ 21,28,089/-, (b) Similarly, the claim made u/s.80HHC has been reduced by a sum of ₹ 12,86,726/-. As far as reduction with regard to the claim made u/s.80IA is concerned, the Assessing Officer has excluded following items: Particular Amount Interest Recd. 5,02,076 Misc. Income 6,66,404 Duty Draw B .....

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culars or concealment of income. As far as the other two items are concerned i.e. Duty Draw Back and sale proceeds of DEPB license are concerned, we find that assessee has filed the return of income on 01.02.2002. There was a controversy, whether the income resulting on transfer of duty draw back or DEPB license would be considered as derived from industrial undertaking. This controversy has been resolved finally by the Hon ble Supreme Court on 31.08.2009 in the case of Liberty India Ltd. V. CIT .....

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