THERMAX BABCOCK & WILCOX LIMITED,PUNE vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE - 10, PUNE

आयकर अपीलीय अिधकरण “बी” �यायपीठ पुणे म� । IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, PUNE BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM आयकर अपील सं. / ITA No.2052/PUN/2017 िनधा�रण वष� / Assessment Year : 2004-05 Thermax Babcock & Wilcox Limited, 14, Mumbai Pune Road, Wakdewadi, Pune-411003. .......अपीलाथ� / Appellant PAN : AAACT3908K बनाम / V/s. ACIT, Circle-10, ……��यथ� / Respondent Pune. Assessee by : Shri Sanjay Bhare Revenue by : Shri Pankaj Garg सुनवाई क� तारीख / Date of Hearing : 30.09.2019 घोषणा क� तारीख / Date of Pronouncement : 01.10.2019 आदेश / ORDER PER D. KARUNAKARA RAO, AM: This appeal is filed by the assessee against the order of CIT(A)-6, Pune dated 22.05.2017 for the Assessment Year 2004-05. 2. The solitary issue raised in the appeal relates to the penalty levied u/s 271(1)(c) of the Act in connection with the disallowance of Rs.66,25,000/-. 3. Before us, at the outset, ld. Counsel for the assessee submitted that the penalty was levied in connection with the disallowance of the commission payments amounting to Rs.66,25,000/-. In this regard, ld. Counsel brought our attention to the order of the Tribunal on merits vide ITA No.402/PUN/2013

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along with C.O. No.22/PUN2014 and others dated 05.09.2019 and submitted that the contents of para 16 and its sub-paragraphs are relevant. Referring to the said para 16 of the order of the Tribunal (supra), ld. Counsel submitted that the payments, made i.e. Rs.36,25,000/- to AyokiFabricon Pvt. Ltd., Pune and Rs.30,00,000/- to M/s New Bombay Ispat Udyog, Mumbai, are found allowable at the end of the proceedings before the Tribunal. For the sake of completeness, the relevant lines of sub-para 16.3 of the order of the Tribunal (supra) are extracted hereunder :- “16.3 ……… The reasons for disallowing commission is purely on surmises and conjectures. The findings of the Commissioner of Income Tax (Appeals) on this issue are erroneous and hence, liable to be rejected. We hold and direct accordingly. The payment of commission to M/s. Ayoki Fabrication Pvt. Ltd. and M/s. New Bombay Ispat Udyog Ltd. is allowed. Thus, ground No.3 of the cross objections filed by the assessee is allowed.” 4. On the other hand, ld. DR for the Revenue relied heavily on the orders of the Assessing Officer and the CIT(A). 5. We heard both the sides and perused the orders of the revenue authorities and also the order of the Tribunal (supra) on merits. From the above extracted lines of the order of the Tribunal (supra), it is evident that the disallowance of Rs.66,25,000/-, the commission payment made to couple of companies (supra), are found eventually allowable by the Tribunal. Considering the relief granted to the assessee on merits by the Tribunal, we are of the opinion that the penalty order has no legs to stand. The penalty is

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unsustainable in law. Accordingly, the grounds raised by the assessee are allowed. 6. In the result, the appeal of the assessee is allowed. Order pronounced on 01st day of October, 2019. Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (D. KARUNAKARA RAO) �याियक सद�य/JUDICIAL MEMBER लेखा सद�य/ACCOUNTANT MEMBER पुणे / Pune; �दनांक / Dated : 01st October, 2019 Sujeet आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(A)-6, Pune. 4. The Pr. CIT-5, Pune. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “बी” ब�च, 5. पुणे / DR, ITAT, “B” Bench, Pune. गाड� फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.