2012 (7) TMI 1015

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.... the facts of the case are that the assessee filed its return declaring total income of Rs. 2.51 crore. During the course of assessment proceedings it was observed by the A.O. from the Notes to the computation filed by the assessee that it claimed to have received certain reimbursements in the nature of link charges on a cost to cost basis from Convergys Information Management (India) Private Limited (CIM). The said amount was claimed as not chargeable to tax. On being called upon to explain as to how the said amount was not chargeable to tax, the assessee stated that CIM had used data communication lines procured by the assessee from third party service providers. Since these charges were allocated by the assessee on a cost to cost basis, ....

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....net (India) (P) Ltd. v. ITO [(2009) 27 SOT 523 (Mum.)]. In the light of these precedents it is apparent that the payment for access to internet and bandwidth charges cannot be described as fees for technical services. 4. It is an entirely different matter that the assessee agreed to the addition and did not challenge it in the appellate proceedings. The mere fact that an addition has been accepted cannot per se be a ground to impose penalty u/s 271(1)(c). Both the assessment and penalty proceedings are distinct from each other. Though the finding given in quantum proceedings is relevant but not conclusive as to the imposition of penalty u/s 271(1)(c). If during the penalty proceedings the assessee succeeds in proving that it made a bona ....