ACIT, New Delhi V. M/s. Keihin Panalfa Ltd, New Delhi

ITA 4097/DEL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8147 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 04-02-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 09-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GARIMA BHAGAT
• Assessee Lawyers: R K KAPOOR
• Keywords: Royalty expenses
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D: NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER & SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 4097/DEL/2009 ASSESSMENT YEAR : 2003-04 THE ACIT, CIRCLE 5(1), NEW DELHI. VS. M/S. KEIHIN PANALFA LTD. M-34, 2 ND FLOOR, GREATER KAILASH-II, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : MS. GARIMA BHAG AT, SR. D.R. RESPONDENT BY : SHRI R.K. KAPOOR, C.A. O R D E R PER: C.L. SETHI, J.M. THE REVENUE IS IN APPEAL AGAINST THE ORDER DATED 03.08.2009 OF THE LD. CIT(A) DELETING THE PENALTY OF RS. 12 LAKHS LEVIED BY THE A.O. U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT) FOR THE ASSESS MENT YEAR 2003-04. 2. IN THIS CASE, THE SUM OF RS. 22,53,000/- BEING 2 5% OF TOTAL RUNNING ROYALTY EXPENSES WERE HELD TO BE OF CAPITAL IN NATURE BY TH E A.O. AND THEREBY THE ASSESSEES CLAIM OF DEDUCTION TO THAT EXTENT WAS DI SALLOWED IN THE ASSESSMENT MADE BY THE A.O. FURTHER, THE A.O. ALSO DISALLOWED THE AMOUNT OF RS. 14,52,020/- U/S 40A(2) WHILE MAKING THE ASSESSMENT. IN RESPECT OF THE AFORESAID TWO ADDITIONS MADE BY THE A.O., THE A.O. INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AND THEREAFTER ULTIMATELY LEVI ED THE PENALTY. ITA NO. 4097/DEL/2007 2 3. ON AN APPEAL, THE LD. CIT(A) DELETED THE PENALTY FOR THE REASON THAT THE ITAT, DELHI BENCH I, NEW DELHI IN ITA NO. 3714/DE L/2006 VIDE ITS ORDER DATED 27.02.2009 HAS DELETED BOTH THESE ADDITIONS A ND, THUS, THE PENALTY LEVIED BY THE A.O. U/S 271(1)(C) IN RESPECT OF THE AFORESAID TWO ADDITIONS DOES NOT SURVIVE. 4. WE HAVE HEARD BOTH THE PARTIES AND HAVE CAREFULL Y PERUSED THE MATERIAL ON RECORD. 5. IN THE COURSE OF HEARING OF THIS APPEAL, THE LD. COUNSEL FOR THE ASSESSEE HAS FURNISHED A COPY OF ORDER DATED 27.02.2009 PASSED B Y THE ITAT, DELHI BENCH I, NEW DELHI IN ITA NO. 3714/DEL/2006 WHEREBY THE TRIB UNAL HAS DELETED BOTH THE ADDITIONS, NAMELY, ADDITION OF RS. 22,53,000/- ON A CCOUNT OF ROYALTY EXPENSES AND ADDITION OF RS. 14,52,020/- BEING DISALLOWANCE U/S 42A(2) OF THE ACT. IN THE LIGHT OF THESE FACTS, IT IS, THUS, CLEAR THAT THE ADDITIO NS ON THE BASIS OF WHICH PENALTY HAS BEEN LEVIED DO NOT SURVIVE ANY MORE AND, THEREFORE, THE PENALTY LEVIED BY THE A.O. U/S 271(1)(C) HAS BEEN RIGHTLY CANCELLED BY TH E LD. CIT(A). 6. THE ORDER OF LD. CIT(A) IS, THUS, UPHELD. ITA NO. 4097/DEL/2007 3 7. THIS DECISION IS PRONOUNCED IN THE OPEN COURT ON 4 TH FEBRUARY, 2010 IMMEDIATELY AFTER THE HEARING WAS OVER. SD/- SD/- (SHAMIM YAHYA) ACCOUNTANT MEMBER (C.L. SETHI) JUDICIAL MEMBER DATED: 4 TH FEBRUARY, 2010. MAMTA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. BY ORDER DEPUTY REGISTRAR