TMI Blog2017 (11) TMI 1538X X X X Extracts X X X X X X X X Extracts X X X X ..... erence of opinion between the Assessing Officer and the assessee. It is not the department’s case that relevant facts were not disclosed in the income tax return of the financial statement of the assessee. It is undisputed that the assessee had furnished all the details of expenditure as well as income and no such details were found to be inaccurate nor could be viewed as concealment of income on the part of the assessee. Therefore, at most, it was a case of the assessee making an incorrect claim in law which cannot tantamount to furnishing of inaccurate particulars of income. The Hon’ble Apex Court has held in Commissioner of Income Tax vs Reliance Petroproducts (2010 (3) TMI 80 - SUPREME COURT) that merely because the assessee had cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r called the Act ) on the basis of circle rate in respect of property situated at Sector 80, Noida. ii) Disallowance of ₹ 37,31,300/- being amount disallowed by the Assessing Officer out of Director s remuneration. Subsequently, penalty of ₹ 18 lakh was imposed u/s 271(1)(c) of the Act on these two additions/disallowances which on appeal was also confirmed by the ld. CIT(A). Now, the assessee has approached the ITAT and has challenged the confirmation of penalty. 3. At the outset, ld. AR submitted that the assessee was seeking deletion of penalty only on the disallowance of ₹ 37,31,300/- which had been disallowed out of Director s remuneration. 3.1 On the second issue on which the penalty had been confirmed i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause during the initial years, it is the management of the capital outlay and its deployment which is the main function and responsibility of the management. It was also submitted that any comparison between the net profit of the old and established units at Noida and newly set up unit at Dehradun was unjust and unfair and devoid of real business consideration which the Assessing Officer had done. It was also submitted that there was no justification in apportioning the salary and wages equally between the units in Noida and Uttarakhand because Noida establishment had two units and Uttarakhand had only one unit. It was also emphasised that Noida establishment employed 1030 employees whereas Uttarakhand unit had only 660 employees during th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reliance was also placed on a judgment of the Hon ble Bombay High Court in the case of Commissioner of Income Tax vs Mirc Electronics Ltd. reported in (2017) 77 taxmann.com 67 (Bombay). Ld. AR submitted that the penalty as upheld by the ld. Commissioner of Income Tax(A) may kindly be deleted. 4. In response, the ld. C.I.T. DR read out from the order of the Assessing Officer as well as the ld. Commissioner of Income Tax(A) and submitted that as pointed out by the Assessing Officer as well as the ld. Commissioner of Income Tax(A), this was just a ploy by the assessee to avoid payment of tax and there was no justifiable reason for the assessee to have apportioned the remuneration on the basis of capital outlay. She also pointed out that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 83 held that if the Assessing Officer took a view contrary to that expressed by the assessee, it did not per se mean that the assessee had adopted an illegal device for reducing its tax liability. It is undisputed that there are no norms prescribed under the Income Tax Act for allocation of common expenses incurred by the assessee and the same has to be apportioned to various manufacturing units on the basis of an estimate only. The assessee company adopted the capital basis for apportionment whereas, as per the Assessing Officer, the same should been allocated on the basis of salary and wages. Thus, it was only a case of difference of opinion between the Assessing Officer and the assessee. It is not the department s case that relevant fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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