2011 (12) TMI 612

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....ncome tax Act, 1961 by the ld. CIT-I Ludhiana is against law and facts on the file in as much as the penalty order passed by the ld. AO can neither be said to be erroneous nor prejudicial to the interest of revenue. 2. That the issue with respect to the leviability of penalty u/s 271(1)(c) on the amount of sales tax subsidy had merged with the order of ld. CIT(A) who had adjudicated the issue vide order dated 10.12.2010." 3. In the course of present appellate proceedings against the order dated 15.4.2011 passed by the CIT u/s 263 of the Act, it was contended by the ld. 'DR' that the issue of sales tax subsidy for the purpose of levy of penalty u/s 271(1)(c) has been duly considered and adjudicated by the CIT(A) vide order dated ....

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....DER THE SAME AS CAPITAL RECEIPT. THUS THE SALES TAX SUBSIDY MAY PLEASE BE TREATED AS CAPITAL RECEIPT AT THE TIME OF FRAMING OF ASSESSMENT." Refer to point No.22(b) of form 3CD of tax audit report dated" From the aforesaid discussion and also discussion made in the assessment order it is seen that the assessee company itself has shown the aforesaid sales tax subsidy as revenue receipt and claim to treat the sales tax subsidy as capital receipt was made only by way of a note to computation of total income as reproduced above. However, claim of the sales tax subsidy to be treated as capital receipt has been disallowed by the AO. In view of the above discussion, I am of the opinion that the assessee cannot be said to have concealed its inco....