TMI Blog2019 (2) TMI 1539X X X X Extracts X X X X X X X X Extracts X X X X ..... for concealment and in such case, no penalty can survive and the penalty is liable to be cancelled.” So, in view of the matter, penalty levied by the ld. CIT (A) is ordered to be deleted - Decided in favour of assessee. - Early Hearing Application No.25/Del/2019 (in ITA No.7541/Del./2018) - - - Dated:- 25-2-2019 - Vice President, Shri G.D. Agrawal And Shri Kuldip Singh, Judicial Member For the Assessee : Shri Rishabh Malhotra, AR For the Revenue : Shri Amit Katoj, Senior DR ORDER PER KULDIP SINGH, JUDICIAL MEMBER : Keeping in view the undisputed fact that the addition made by the AO and confirmed by ld. CIT (A) on the basis of which penalty proceedings were initiated, has been deleted and in the given circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in levying penalty under section 271(1)(c) of the Act on the alleged ground that the appellant has willfully and deliberately furnished inaccurate particulars of income and has also concealed the particulars of its income to the extent of the income enhanced by his office in these appellate order dated 30.06.2017. 3. Briefly stated the facts necessary for adjudication of the controversy at hand are : On the basis of completed assessment under section 143(3) of the Income-tax Act, 1961 (for short the Act ) at loss of (-) ₹ 2,85,68,828/-, penalty proceedings under section 271(1)(c) was initiated. After declining the contentions raised by the assessee, l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at research activity carried on by assessee has resulted in enduring benefits to assessee. He submitted that while doing so, Ld.CIT(A) examined various definitions of the term research to arrive at the conclusion that the activity pertains to enhancement of cumulative knowledge of human civilisation and, therefore, cost of research done by assessee resulted in long and enduring benefit, which cannot be held as revenue expenditure. Ld.Counsel submitted that Ld. CIT (A) failed to appreciate that assessee is in the business of research and informatics services for drug discovery units based upon Insilco Solutions. It has been submitted that assessee provides discovery informatics products and services and collaborative drug services that inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... training 16. Software license fee 17. Finance charges 18. Misc. Expenses 19. Bad debts Subcontractor Services 15,92,90,000 Such expenses were incurred towards sub-contracting of a part of research activities Depreciation Amortisation 8,27,41,000 Such expenses were incurred towards normal wear and tear of fixed assets Interest 13,33,54,000 Such expenses were incurred towards unsecured loans borrowed by the Appellant Total: 1,02,52,32,000 13. He placed reliance upon decision of Hon ble Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n on the basis of which penalty proceedings have been initiated is no more in existence having been deleted by the Tribunal, penalty levied by AO and confirmed by the ld. CIT(A) is not sustainable in the eyes of law, hence ordered to be deleted in view of the judgment rendered by the Hon ble Apex Court in the case of K.C. Builders Anr vs. ACIT 265 ITR 562 (SC) wherein it is held that, when the addition made in the assessment order on the basis of which penalty for concealment is levied have been deleted there remains no basis at all for levying the penalty for concealment and in such case, no penalty can survive and the penalty is liable to be cancelled. So, in view of the matter, penalty levied by the ld. CIT (A) is ordered to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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