1985 (9) TMI 41

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....compass. The relevant assessment year is 1962-63, for which the relevant previous year is the accounting year March 25, 1961, to March 31, 1962. The assessee is a registered firm doing business mainly in cloth. The assessee secured a licence for importing automobile spare parts. The assessee then entered into a contract to import and sell to M/s. Bipin Automobiles 3,100 capacitors at a profit of 50 per cent. on C.I.F. value. There was a further condition in the contract that the purchaser was to bear all the expenses, including customs duty, etc. Pursuant to this agreement, the assessee placed an order for capacitors with a foreign exporter and the goods, namely, capacitors, were eventually imported. But it was found that the goods did not ....

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....sistant Commissioner agreed with the view of the Income-tax Officer that the assessee's claim in respect of penalty was not one which could be allowed under section 28 of the Income-tax Act, 1961. The assessee then preferred a second appeal to the Income-tax Appellate Tribunal. The Tribunal came to the conclusion that the assessee had contravened some of the conditions or specifications of the licence and the penalty was levied upon the assessee and not the purchaser. The assessee had rightly debited the penalty to the trading account and the assessee was not right in contending that the debit in respect of the penalty in the trading account was wrongfully made by the assessee. What the purchasers, M/s. Bipin Automobiles, had paid to the as....

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....ng the conclusion that the penalty was levied on the assessee for the default of the assessee itself and not on the ground of any other person's default. Nor is this a case in which the assessee can be regarded in any sense as a nominal licence-holder. It is not as if the assessee gave its licence to M/s. Bipin Automobiles for importing the goods in question and M/s. Bipin Automobiles imported the goods. The licence was utilised by the assessee-firm itself and that fact cannot be altered by the circumstance that they had agreed to sell the goods to be imported by them to M/s. Bipin Automobiles. It is well settled that if an assessee has to pay a penalty to the customs authorities in respect of goods imported by the assessee on account of it....