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2016 (11) TMI 454 - ITAT HYDERABAD

2016 (11) TMI 454 - ITAT HYDERABAD - TMI - Confirmation of penalty u/s. 271(1)(c) - additions pertaining to sale of PCBs and closing stock in finished goods - Held that:- It is the action of AO in bringing into tax, sale recorded in next year as ‘sale’ of this year on the reason that goods were shown as ‘discharged’ in the RG1 Register. In fact, there is no concealment as such. It is only the question of year of taxability. With reference to three Shock Pulse Analysers valued at ₹ 3,10,802 .....

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wo amounts certainly does not fall in the category of concealment of income and therefore, penalty cannot be levied on the above two amounts. - Decided in favour of assessee - Disallowance of 80-IA - Held that:- Assessee has acquired the property earlier in 01-04-1992 and the EMC Electronik unit was set up in AY. 1992-93. It was submitted that it has complied with all the conditions of Section 80-IA. This being the third year of the claim, AO analysed that assessee purchased second hand mach .....

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10 (3) TMI 80 - SUPREME COURT] - Decided in favour of assessee - I.T.A. No. 1569/HYD/2014 - Dated:- 21-10-2016 - Smt. P. Madhavi Devi, Judicial Member And Shri B. Ramakotaiah, Accountant Member For Assessee : Shri K.A. Sai Prasad, AR For Revenue : Shri K.J. Rao, DR ORDER Per B. Ramakotaiah, A. M. This is an appeal by assessee against the confirmation of penalty of ₹ 4,50,000/- u/s. 271(1)(c) of the Income Tax Act [Act] by the Commissioner of Income Tax (Appeals)-IV, Hyderabad vide orde .....

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goods ₹ 3,10,802/-. Even though assessee contested the same in the appeal, he withdrew the contentions with reference to additions whereas the Ld.CIT(A) allowed the deduction u/s. 80-IA. In the appeal by Revenue, ITAT vide its order dt. 30-03-2007, reversed the order of the CIT(A) and affirmed action of AO in disallowing the claim u/s. 80-IA. Since proceedings u/s. 271(1)(c) were initiated on 13-02-1997 when assessment was completed, AO completed the proceedings by levying penalty u/s. 27 .....

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in next year, as the same brought to tax this year. With reference to three Shock Pulse Analysers brought to tax at ₹ 3,10,802/-, it was submitted that the value was shown in the work-in-progress but for excise purposes, they were shown in the RG1 Register. Therefore, there is no escapement of income. Ld.CIT(A) however, did not agree with these contentions and confirmed the penalty. Assessee however, raised an issue of limitation in passing the orders which the CIT(A) rejected after analy .....

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nfirming the levy of penalty on the value of closing stock of finished goods said to be undisclosed without considering that the value of work in progress included a value for the same; 4. The Honourable Commissioner of Income Tax (Appeals)-IV erred in passing an order confirming the levy of penalty u/s. 271(1)(c) on the disallowance of deduction u/s. 80(IA) even though it was allowed in appeal by the CIT(A)-V and disregarding the aspect of disallowance being made only on the basis of interpreta .....

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but AO disbelieved the explanation; iii. With reference to claim of deduction u/s. 80-IA, it was submitted that assessee has acquired an undertaking on 01-04-1992 and claimed deduction u/s. 80-IA. AO disallowed the claim on the ground that assessee purchased second hand machinery. In appeal, Ld.CIT(A) allowed the claim of assessee but was reversed by the ITAT. It was a claim of deduction and assessee has justified that claim but on a different interpretation by appellate authorities, the claim w .....

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erefore, there is escapement of income. Further, with reference to 80-IA claim, the AR referred to the findings of the ITAT that assessee has purchased second hand machinery and therefore could not have claimed 80-IA. He supported the orders of AO and CIT(A). 7. We have considered the rival contentions and perused the documents on record. As far as two additions are concerned, it is the fact that sales recorded in the next year have been brought to tax during the year based on the entries in the .....

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he appellant had sold 140 PCBs for a sum of ₹ 30,569 vide gate pass No. 67 dt. 22.09.1993. This transaction had not been recorded in the account books. The appellant explained that the sale had been recorded in the succeeding year on acceptance by the customer and on receipt of payment. The appellant also submitted that for the AY 1995-96, the Assessing Officer allowed the deduction from the sale value thereof. 3.2. The Assessing Officer held that since the goods were dispatched to the cus .....

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stock statement, the closing stock was shown as nil. The appellant submitted that these items were included as part of work-inprogress in the Balance Sheet. The Assessing Officer rejected the appellant s explanation and added the sum of ₹ 3,10,802, being the value of these items, to the closing stock and brought it to tax. 4.2. In the course of the penalty proceedings, the appellant submitted that they had declared stock as part of work-in-progress in their books, that these products, thou .....

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the appellant on this issue . 7.2. As can be seen from the above, we are unable to understand on what basis penalty is levied as AO invoked both concealment of income as well as furnishing inaccurate particulars. As seen from the above facts as recorded by the CIT(A), as far as amount of ₹ 30,569/- is concerned, it is the action of AO in bringing into tax, sale recorded in next year as sale of this year on the reason that goods were shown as discharged in the RG1 Register. In fact, there .....

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s shown in work-in-progress and the addition is a double addition have not been invalidated. Considering these, we are of the opinion that these two amounts certainly does not fall in the category of concealment of income and therefore, penalty cannot be levied on the above two amounts. 7.3. The other issue on which penalty was levied is with reference to assessee s claim of deduction u/s. 80-IA. In fact, assessee has acquired the property earlier in 01-04-1992 and the EMC Electronik unit was se .....

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view of concealment of income . It can also do not form under the category of furnishing of inaccurate particulars . Hon'ble Supreme Court in the case of CIT Vs. Reliance Petro Products [322 ITR 158] has held as under: We have already seen the meaning of the word "particulars" in the earlier part of this judgment. Reading the words in conjunction, they must mean the details supplied in the return, which are not accurate, not exact or correct, not according to truth or erroneous. We .....

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