TaxTMI 
TaxTMI 
2011 (4) TMI 654
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.... order of the Ld. CIT(A) and Tribunal has disposed off the same vide order dated 6.10.2009. 5. The AO has levied penalty at the rate of 100% on income sought to be evaded by the assessee in respect of the following items:- Sl. No. Particulars Amount (Rs.) (a) Short term capital loss incurred on sale of Mutual fund units as disallowed u/s 94(7) of the Act. 99,396/- (b) SAP Expenses 40,55,864/- (c) Expenses relatable to investments u/s 14A of the Act 4,44,600/- (d) Deduction u/s 80G of the Act not allowed on Account of non production of receipts 1,42,002/- (e) Deduction u/s 80HHC of the Act has been Recomputed at Rs. 86,64,947/- as against the Claim of Rs. 90,20,718/- 2,76,147/- 5. On appeal before the CIT(A) the assessee submitted as follows:- "The appellant submitted that, as regards the capital loss of Rs. 99,396/- is concerned, the same has arisen on account of the application of provisions of sec 94. The assessee submitted that the provisions of sec 94 of the Act are not applicable in respect of unit sold by the appellant company for the reasons that the investments in unit was made not with a view to incur loss and avoid tax. The provis....
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....(A) on this issue. 10. The second issue on which penalty has been confirmed by AO is w.r.t SAP Expenses. Before the Ld. CIT(A) the assessee submitted that though the SAP project was implemented in the subsequent year, the consultancy fees professional charges and other incidental cost etc., should not be disallowed as capital expenditure as the appellant company has been carrying on business for number of years and it has been acquiring and implementing various hardware and software systems from time to time, The said hardware and software require continuous upgradation and modification. These expenses are incurred in respect of SAP implementation and is of revenue nature. AO has ignored the alternative plea of the appellant that if it is held as capital expenditure, the same should be considered in allowing depreciation u/s 32 of the Act. Therefore, penalty should not be levied on the same. 11. On appeal against the levy of penalty the CIT(A) held as follows:- "I have considered the facts of the case and the submissions made by the AR/Appellant and the same are not acceptable, Appellant has expenses of on SAP related project which has been capitalized by th....
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.... has furnished inaccurate particulars of its income and accordingly penalty levied on the same is upheld." 12. Aggrieved, assessee is on appeal before us. The Ld. Counsel for the assessee Ms. Aarti Visanji submitted before us as follows:- "The ITAT vide order No. 2954/Mum/2006 dt. 6th October 2009 has directed the Assessing Officer to decide the issue afresh recording the clear finding of the exact nature of expenses claimed by the assessee company and allowing the same in case the expenses were incurred for study the market in connection with acquiring and implementing various hardware and software systems during the year and in case the product for purchase by the assessee has already been identified and the expenditure claimed by the assessee relates to activities which are after the identification of the product to be purchased by the assessee company, the same shall be capital in nature and not allowable. Further the appeal effect is pending. However, the necessary details have already been submitted to the assessing officer." 13. In the quantum appeal since the issue has been set aside, we set aside the penalty levied in this regard. 14. The ne....
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.... allowable. Accordingly, Assessing Officer disallowed deduction u/s.80HHC on DEPB benefits of Rs.58,09,284/-. Assessing Officer also added Rs.59,82,15,398/- on account of Excise Duty and Sales Tax to the total turnover for the purpose of computing deduction u/s.80HHC. as regards direct expenses attributable to the trading export business. Assessing Officer found that appellant has deducted estimated indirect cost of Rs.50,000/-. However, Assessing Officer estimated the indirect cost at Rs.3,88,912/- and recomputed the deduction u/s. 80HHC. Assessing Officer has also noticed that the assessee has earned other income including the following, which were not excluded from the profits of business for computing deduction u/s.80HHC. 1. Interest on deposits and others 11,66,338 2. Insurance claim 34,92,986 3. Miscellaneous income 1,15,40,294 The Assessing Officer has excluded from the profit of business 90% of the above income for the purpose of computing deduction u/s.80HHC of the Act. In view of the above, the Assessing Officer recomputed and allowed the deduction of Rs.73,83,585/- u/s. 80HHC as against Rs.90,20,718/- claimed by the assessee in the revised....