ITAT affirms deletion of penalty & addition, grants depreciation on computer peripherals

The ITAT upheld the CIT(A)'s decision to delete the penalty u/s 271(1)(c) for the quantum addition of commission paid to directors u/s 36(1)(ii) for A.Y. 2003-04, as the quantum addition was already deleted. Additionally, the ITAT affirmed the CIT(A)'s deletion of the addition made on account of commission paid to the Director and allowed depreciation on computer peripherals and accessories for A.Y. 2007-08, following consistency in decisions and reliance on Tribunal's orders.

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Issues involved:
The issues involved in this judgment are the deletion of penalty u/s 271(1)(c) for quantum addition of commission paid to directors u/s 36(1)(ii) for assessment year 2003-04, and the deletion of addition made on account of commission paid to Director of the company and the allowance of depreciation on computer peripherals and accessories for assessment year 2007-08.

Issue 1: Deletion of penalty u/s 271(1)(c) for quantum addition of commission paid to directors u/s 36(1)(ii) (A.Y. 2003-04):
The revenue appealed against the deletion of penalty u/s 271(1)(c) by CIT(A) based on the ITAT's deletion of the quantum addition of commission paid to directors u/s 36(1)(ii). The ITAT upheld the CIT(A)'s decision, stating that since the quantum addition was deleted, the penalty was rightly deleted.

Issue 2: Deletion of addition made on account of commission paid to Director and allowance of depreciation on computer peripherals and accessories (A.Y. 2007-08):
The revenue contested the deletion of addition made on account of commission paid to Director and the allowance of depreciation on computer peripherals and accessories. The CIT(A) relied on the ITAT's order in the assessee's own case for A.Y. 2003-04 to delete the disallowance of commission paid to directors u/s 36(1)(ii). The CIT(A) also allowed depreciation @ 60% on computer peripherals and accessories, following Tribunal's decisions. The ITAT upheld the CIT(A)'s decisions on both grounds, dismissing the revenue's appeals.

This judgment highlights the importance of consistency in decisions across different assessment years and the significance of following Tribunal's orders in similar cases for the proper application of tax laws.

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