2016 (12) TMI 1006

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....ates to Assessment Year 2002-03 and the other relates to Assessment Year 2003-04. 2. The common identical question of law raised by the Revenue in both the appeals is as under : (i) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in deleting the penalty levied by the Assessing Officer u/s 271(1)(c) of the Income Tax Act even though the assessee had deliberately furnished inaccurate particulars of income by making an excess claim under Section 80IA of the IncomeTax Act which led to concealment of income? 3. The respondent assessee is engaged in the business of manufacturing of TV sets, VCR, audio and video cassettes and compact disc players. It has seven divisions under which it operates ....

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....ner of Income Tax (Appeals) [CIT(A)] by a common order dated 6th October, 2010 allowed the respondent assessee's appeal from orders dated 30th March, 2009 for A.Y. 2002-03 and 2003-04. This inter alia by following its order for Assessment Years 200102 in penalty proceedings. This deletion of penalty was essentially on account of the fact that since the expenses to be allocated to the different units is a matter of opinion and it cannot be said that there has been any concealment of the income or filing of inaccurate particulars on the part of the assessee. 7. Being aggrieved, the Revenue carried the issue further in appeal to the Tribunal. The Tribunal by the impugned order upheld the view of the CIT(A) and held that the Tribunal has c....

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....recting to restrict the allocation of personnel expenses to 10% to the eligible unit for A.Y. 2001-02 tacitly accepted the need of allocation of expenses to the eligible unit for the purpose of determining the claim u/s 80IA and therefore confirmed that the claim of deduction u/s 80IA made by the assessee from year to year basis is high and excessive". Therefore, he submits that the penalty is justified. 10. The grievance of the Revenue as articulated by Mr. Kotangle is not sustainable. This is for the reason that it is an admitted position before us that the issue of 10% of allocation to personnel expenses to the eligible unit for the Assessment Year 2000-01 was decided by the Tribunal much after filing of return of income for the subjec....