TaxTMI 
TaxTMI 
2021 (5) TMI 102
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....d in deleting the penalty u/ s 271(1)(c) of the IT Act, relevant to assessment year 2010-11." 3. Ikea Trading (India) Private Limited is an Indian company incorporated in India on 13th June 1994. The assessee, a Merchant Exporter, granted a 'Four Star' export house status by the Government of India, is engaged in the trading of home furnishing products. The assessee purchases different home furnishing products like carpets, textile and metal etc. from various supporting manufacturers in India and exports the same outside India. 4. The assessment in this case was made at a loss of Rs. 9,87,972 /- against returned loss of Rs. 7,82,35,830 /-. The additions were made on account of transfer pricing adjustment in respect of sale of fixed....
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....ted under the Act, which was Rs. 119,205,110 /- and not as per the valuation report carried out by external valuer. After taking into consideration, WDV of the assets and value of the assets as per the valuation certificate, the AO determined that the shortfall as per ALP of Rs. 61,703,289 /- on adjustment of the ALP. 8. Heard the arguments of both the parties and perused the material available on record. 9. We find that the assessee has sold assets at the WDV of the assets as per company law whereas the TPO held that the assessee ought to have sold the assets at the value of the WDV of the block of assets as per the Income Tax Act. The WDV as per the Income Tax Act may not be / cannot be the fair market value of the assets. The asset....
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....port Purchase Invoice from Ikea Group entity (raised only for the purpose of Import of goods and subsequent clearance by the Custom Authorities), Packing list, Bill of Entry for Home consumption 4 As per the arrangement between Ikea India and the vendor, the vendor collects the defected goods from the ICD Depot (Dadri) 5 Ikea India pays the rework charges to the Vendor as per the invoice from the Vendor Purchase Invoice from the Vendor in India (It is clearly mentioned on the invoice that the goods were re-imported vide bill of entry for repairs. After doing repairs such gods are re-exported through this invoice). 6 Ikea India re- exports re- worked goods to the Group entity Sale Invoice to the Group entity, Shipp....
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....on for invoking Explanation 1 to section 271(1)(c) of the Income Tax Act, 1961 is that the assessee " fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) to be false.". It is only in such a situation that the Assessing Officer can invoke the Explanation to Section 271(1)(c) and impose penalty. 16. We also hold that the penalty cannot be sustained in view of the judgment of the Hon'ble Jurisdictional High Court in the case of ACIT Vs Delhi Cloth & General Mills Co. Ltd. 157 ITR 822 wherein it was held that the mere fact that a claim for expenditure stands disallowed does not by itself lead to the inference that the assessee had furnished inaccurate particulars in reg....