TMI Blog2009 (9) TMI 1004X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue against the order of CIT(A) dated 27.11.2008 for the AY 2003-04, in the matter of deletion of penalty imposed u/s 271(1)(c) of the IT Act. 2. Rival contentions have been heard and record perused. Facts in brief are that the assessee filed return of income alongwith audited financial statements including notes to accounts and tax audit report. As per Schedule 14 relating to Significant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... favour of the assessee with a direction to the AO to work out corresponding expenses adopted in the next year and to allow the claim of the assessee in this year and to give consequent effect in subsequent years. 3. After the additions were made, the AO also levied penalty u/s 271(1)(c) with respect to the addition so made. In the appeal filed against the penalty order, the CIT(A) deleted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany in its books recognized TPA fees as its income on the basis of apportioning 70% of the quarter in which the fees was received and balance 30% was booked as income in the next three quarters. Accordingly, the assessee followed matching concept of income and expenses to be incurred in respect of third party insurance. As the income was belonging to one year and the services were to be rendere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the expenses to be incurred thereon. Even in the Schedule-14 relating to the significant accounting policies and the notes annexed thereto, the assessee has clearly stated that TPA fees is invoiced to the insurance company on quarterly basis which is recognized as income on the basis of 70% of the amount invoiced in the first quarter to meet initiation card insurance related cost. Balance 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulars, therefore we do not find any infirmity in the order of CIT(A) for deleting the penalty with respect to recognition of the 30% of the TPA income as having been spread over the next three quarters, insofar as the TPA fee so received was belonging to the full year i.e. four quarters. 6. In the result, the appeal filed by the Revenue is dismissed. Decision pronounced in the open Court on 25t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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