TaxTMI 
TaxTMI 
2015 (5) TMI 891
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....he claim of deduction u/s. 10A overlooking the fact that orders of assessment for assessment year 2006-07 and 2007- 08 were passed after the return for assessment year 2008-09 was finalized. 3. The roots for the levy of penalty u/s. 271(1))(c) of the Act lie in the assessment order dt. 21.12.2011 made u/s. 143(3) of the Act. While scrutinizing the return of income, the Assessing Officer observed that the assessee is rendering software services from three different units out of which one of the unit was eligible for deduction u/s. 10A of the Act. The AO further observed that the total sales and services for the year under consideration were at Rs. 93.06 crores and the net profit has been reported at Rs. 82.15 lakhs as compared to Rs. 6.47 c....
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....Tribunal there against. As a practical measure and in order to avoid protracted litigation on a largely factual matter involving a substantial degree of estimation, it was felt that it would be in the interests of the company to accept the methodology of estimating profits which found favour with the CIT(A). Accordingly, in assessment year 2007-08 we filed revised claim in which the amount of deduction u/s. 10A was reworked whereby we had allocated common expenses incurred at locations other than Bangalore on particular basis." 4. The allocation of expenditure was accepted by the AO except for two expenses namely (1) software purchase expenses and (2) interest expenses. The AO was of the opinion that the assessee has allocated only Rs. 16,....
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....also present in the year under consideration. According to the AO, the issue of allocation of common expense is coming from past two years i.e. right from the year in which deduction u/s. 10A has been claimed. The re-allocation made in the assessment year 2006-07 have been confirmed by the Tribunal also. 4.3. Drawing support from the decision of the Hon'ble Delhi High Court in the case of Zoom Communication (P) Ltd 327 IYTR 510, Hon'ble Supreme Court in the case of K.P. Madhusudhan Vs CIT 251 ITR 99 and Hon'ble Supreme Court in the case of Dharmendra Textile Processors & Others 295 ITR 244 the AO proceeded by imposing penalty u/s. 271(1)(c) of the Act at Rs. 71 lakhs. 5. Aggrieved by this, the assessee carried the matter before the Ld. CI....
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.... there is no question of furnishing of inaccurate particulars inasmuch as all the expenses have been debited in the profit and loss account. The dispute is only in respect of the allocation of expenses which cannot tantamount to concealment of income or furnishing inaccurate particulars of income. In support of his submission, the Ld. Counsel relied upon the decision of the Hon'ble Supreme Court in the case of Reliance Petroproducts Pvt. Ltd. 322 ITR 158, Bombay High Court in the case of Aditya Birla Nova Ltd in ITA No. 3899/2010, Tribunal Mumbai Bench in the case of Dushyant Development Corpn. In ITA No. 2285/M/2011, Hon'ble Bombay High Court in the case of Mansukh Deying & Printing Mills in ITA No. 1113 of 2008, Hon'ble Bombay High Court ....
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....oncluded that when the assessee has filed the return for the year under consideration, it was well aware of the view taken by the department in earlier assessment years, in so far as the allocation of expenses is concerned, yet the assessee did not allocate the expenses in the manner in which they were allocated in the earlier assessment years by the AO. 9.2. The claim of the assessee that it received the appellate order for A.Y. 2006-07 after filing the return is not acceptable for the simple reason that the assessee was well aware of the contentious issue of earlier assessment year just because the AO did not levy penalty in earlier assessment year does not exonerate the assessee from the levy of penalty for the year under consideration.....