TMI Blog2018 (7) TMI 2099X X X X Extracts X X X X X X X X Extracts X X X X ..... rightly observed and held that the TPO was not justified in levying the penalty under Section 271G of the Income Tax Act. We are in complete agreement with the view taken by the learned Tribunal. The findings of the fact recorded by the learned Tribunal are on appreciation of material on record. No substantial question of law arises. - R/Tax Appeal No. 788 of 2018 - - - Dated:- 9-7-2018 - Mr. M.R. Shah and Mr. A.Y. Kogje, JJ. Mr Manish Bhatt, Senior Advocate with Mrs Mauna M Bhatt(174) for the Appellant. ORAL JUDGMENT Mr. M.R. Shah [1.0] Feeling aggrieved and dissatisfied with the impugned order dated 25/10/2017 passed by the learned Income Tax Appellate Tribunal, K Bench, Mumbai (hereinafter referred to as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 271G upon the assessee amounting to ₹ 2,15,98,527/- vide its penalty order dated 24/07/2015. Aggrieved by the levy of penalty under Section 271G of the Income Tax Act, assessee preferred Appeal before the learned CIT(A). Learned CIT(A) vide order dated 29/04/2016 allowed the appeal of the assessee and deleted the penalty levied under Section 271G of the Income Tax Act by holding that the levy of penalty under Section 271G of the Income Tax Act was neither fair nor reasonable, and therefore, it was not justified in the facts of the case, viz, the nature of diamond trade, substantial compliance made by the assessee and reasonable cause showed by the assessee. On Appeal before learned Tribunal by the revenue, by the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act. [5.0] Having heard Shri Manish Bhatt, learned Senior Advocate appearing on behalf of the revenue and considering the order passed by the learned Tribunal confirming the order passed by the learned CIT(A) deleting the penalty under Section 271G of the Income Tax Act, what is noticed by the learned Tribunal in paragraph 19 is as under; 19. We find that the assessee had in the backdrop of the very nature of its business, viz. Manufacturing of diamonds, had though explained to the TPO the practical difficulty in furnishing segment wise Profit Loss account of the AE segment and the non-AE segment, however, the TPO insisted for the same and invoked Rule 10D of the Income-tax Rules, 1962, and instead of determining the arms len ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in light of the peculiar nature of the trade of the assessee would not be possible. We find ourselves to be in agreement with the CIT(A) that if one lot had diamonds of variety of size, colour, shape and clarity, the prices would vary from diamond to diamond and lot to lot, and further, now when the entire lot of diamonds had a common price tag per carat for the whole lot, therefore, it was not possible to evaluate the price of each diamond. We also cannot be oblivious of the fact that even otherwise in the diamond trade line, unless a diamond would weigh half carat or more or one carat or more, the same would not be priced separately in the bill because it was not practical to price diamonds of weights of lower than half carat or one car ..... X X X X Extracts X X X X X X X X Extracts X X X X
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