TaxTMI 
TaxTMI 
2025 (12) TMI 869
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....(3) of the Act on 28-03-2016, determining the total loss at Rs. 3,52,60,518/-. While completing the assessment, the AO made an addition on account of impairment loss on fixed asset at Rs. 1,66,90,983/-, provision for service tax receivable at Rs. 18,00,000/- and addition on account of unaccounted revenue at Rs. 63,91,700/-. Separately penalty proceedings u/s. 271(1)(c) of the Act were initiated. 3. The assessee-company did not file any appeal against the aforesaid order passed u/s. 143(3) of the Act. Therefore, as far as the quantum proceedings are concerned, the same has attained finality. 4. In the penalty proceedings, the AO issued show cause notice dt. 28-03-2016 and thereafter, further show cause was issued on 15-09-2016 wherein the assessee was asked to submit as to why the penalty u/s. 271(1)(c) of the Act should not be levied on various additions/disallowances made in the order passed u/s. 143(3) of the Act. There was apparently no compliance on the part of the assessee and the AO thereafter passed the penalty order u/s. 271(1)(c) of the Act dt. 30-09-2016, levying penalty of Rs. 80,73,186/-. 5. The assessee carried the matter in appeal before the Ld.CIT(A). The Ld....
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....it is an asset adjustment, which is not deductible u/s. 37 of the Act. The AO disallowed it after no response to notice dt. 22-12-2015, holding it inflated expenses and understated income. It was submitted that the Ld.CIT(A) overlooked that CENVAT credit is not an expense, but a recoverable credit, treating it as such was a deliberate inaccuracy, not bonafide. And the assessee did not provide any evidence of irrecoverability and write-off claims are allowable only if unutilizable. 9. It was further submitted that the assessee treated the advance revenue of Rs. 63,97,700/-, but the AO held that it pertained to the current year income after no explanation to notice dt. 23-02-2016. It was submitted that the Ld.CIT(A) failed to appreciate this factual finding by the AO. It was also submitted that the classification of the revenues being in the nature of advance revenues classification was unsupported, indicating evasion, magnitude suggests no oversight, but intent to defer tax. 10. It was accordingly submitted that the order of the Ld.CIT(A) is legally unsustainable and factually erroneous. It prioritizes procedural hyper- technicality over substantive justice and misapplies judi....
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....CIT vs. Samson Perinchery [2017] 88 taxmann.com 413 (Bombay), which has been consistently followed by various Benches of the Tribunal. It was submitted that the Revenue has not challenged the said findings of the Ld.CIT(A) and hence, on this ground itself, the order of the Ld.CIT(A) should be sustained in absence of the challenge by the Revenue to the findings so recorded by the Ld.CIT(A). 13. On the merits of deletion of penalty, it was submitted that as far as the addition on account of impairment loss on fixed asset amounting to Rs. 1,66,90,983/- is concerned, though the assessee's plea before the Ld.CIT(A) was in terms of oversight by consultant while filing the return of income, however, on subsequent examination of the return of income, it was found that the assessee has infact suo moto disallowed the said amount of Rs. 1,66,90,983/- while filing the return of income. In this regard, our reference was drawn to the copy of return of income which was filed during the course of hearing and our reference was drawn to the Schedule-BP (computation of income from business or profession), wherein the assessee has shown a figure of Rs. 7,97,42,464/- being the loss before tax as per....
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....appellant company. It was further submitted that during the Assessment Year i.e. F.Y. 2012-13, the CENVAT Input available on the expenses paid by the appellant company was to the extent of Rs. 21,28,193/- which was not debited to Profit & Loss Account but was separately shown under Balance Sheet head under the Service Tax Receivable on expenses paid, however, during the year end, due to the Non- viability of the business and the appellant company being not as a going concern, it was decided that Service Tax Input credit availed on expenses would be charged off to expenses instead of carrying it forward as an asset in the Balance Sheet of the Company. Thus based on the same, the amount of Rs. 18,00,000/- was reversed back to Expenses. It was further submitted that the Company being in defunct state, the Quantum Appeal was not filed in view of heavy Carried Forward Losses since the appellant company was sure that the Carried Forward Losses would not be utilized by the company. After considering the nature of this addition, I am inclined to agree with the appellant's argument. The penalty u/s. 271(1)(c) is attracted only if any person has concealed the particulars of its income or....
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....Mercantile system of accounting, it raised the Invoices for various durations ranging from one month to one year as and when the contract for services is entered by appellant company and thus as and when the Invoices were raised by the appellant company, the amount pertaining to next financial year was accounted as Subscription Received in advance since the services would be rendered in the next financial year. It was further submitted that due to the fact that the Invoice was raised for one year, any period after the end of 31st March was accounted as Subscription Received in advance and shown as was subsequently reversed next year. It was pointed out that during the year, the Opening Balance of Rs. 14,98,446/-which were shown as Subscription Received in advance was transferred to current year's income and from current year's billing for current year's Invoices raised, the amount pertaining to period after 31.3.2013 was transferred to Subscription Received in advance amounting to Rs. 63,91,700/- and the Closing Net Balance for advance received was of Rs. 46,28,029/-, thus after passing the entry of Rs. 63,91,700/-, certain income which pertains to current year amountin....
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.... adopted in penalty proceedings and the authorities have to consider the matter afresh from different angle. This Court in the case of VASANTH K HANDIGUND reported in 327 ITR 233, has held that when addition has been accepted to buy peace and avoid litigation and the explanation was found reasonable by the appellate authorities the cancellation of penalty was justified. This Court in the case of BHADRA ADVANCING PVT LIMITED reported in 210 CTR 447, held that merely because the assessee has filed a revised return and withdraw some claim of depreciation penalty is not leviable. The additions in assessment proceedings will not automatically lead to inference of levying penalty. This Court in the case of GUJAMGADI reported in 290 ITR 168, has held that every addition to income by the Income Tax Officer will not automatically attract levy of penalty. Similar view has also been taken by this Court in the case of BALAJI VEGETABLE PRODUCTS PRIVATE LIMITED reported in 290 ITR 173. The facts of the addition has to be looked into and the conduct of the assessee may also be taken into consideration. Merely because addition has been accepted and taxes paid along with interest should mitigate th....
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....ale of shares. In any case, it cannot be said that the assessee has concealed any particulars so far as its computation of income is concerned and as such provisions of section 271(1)(c) of the Act are not attracted in this case and we do not find any infirmity in the reasoning given by the Tribunal." In view of the above, penalty levied in respect of addition of Rs. 63,91,700/- on account of Unaccounted Revenue stands deleted." 15. We have heard the rival contentions and perused the material available on record. The matter under consideration relates to levy of penalty u/s. 271(1)(c) on account of disallowance of impairment loss on fixed asset at Rs. 1,66,90,983/-, provision for service tax receivable at Rs. 18,00,000/- and addition on account of unaccounted revenues at Rs. 63,91,700/-. 16. As far as impairment loss on fixed assets is concerned, the ld AR during the course of hearing has duly demonstrated through the return of income and the financial statements that the assessee has suo-moto disallowed the same while filing its return of income and therefore, the question of further disallowance thereof doesn't arise for consideration. The fact that the quantum pro....