CIT vs. INTERTOLL ICS CECONS O & M COMPANY P. LTD
What did the High Court hold?
The Tribunal held that the disallowance under Section 40(a)(ia) was unwarranted due to an amendment effective from April 1, 2005. It also upheld the assessee's claim for depreciation on printers, scanners, and UPS, citing previous High Court decisions. The Tribunal further ruled that the amount claimed as penalty was actually a recovery for service deficiencies as per contract terms.
What were the facts?
The Revenue appealed against an ITAT order concerning assessment year 2005-06. The appeal involved three grounds: disallowance under Section 40(a)(ia), depreciation on printers, scanners, and UPS, and a claim for penalty on contract.
What were the issues?
Whether disallowance under Section 40(a)(ia) was applicable given the amendment, and the correct depreciation rate for printers, scanners, and UPS. The nature of the amount claimed as penalty on contract was also an issue.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cases cited in this judgment(1)Show listHide list
Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.
- CIT v. Orient Ceramics & Industries Ltd.19 citing56 DTR 397 · 2011 · HC
!::: t'i: $-7 * IN THE IIIGH COURT OF DELIII AT NEW DELHI -l- rrA4t4t20r2 ..... Appellant Through: Mr. Sanjeev Sabharwal, Sr. Standing Counsel with Mr. Puneet Gupta, Jr. Standing Counsel and Ms. Gayatri Verma, Advocatc. versus INTERTOLL ICS CECONS O & M COMPANV p. t.rn ..... Respondent Through: Mr. Prakash Kumar, Advocate. CORAM: TION'BLE MR. JUSTICE S. RAVINDRA BIIAT IION'BLI] MR. JUSTICE R.V.EASWAR ORDER " 22.08.2012 1. 'fhree grounds have been urged by the Revenue in supporl of this appeal against thc order of the ITAT dated 30.09.2011 in ITA No.4402lDcIl20I0 for the assessment year 2005-06. Z. The first ground urged is in respect of disallowance of { 1,30,25,9321-. On this, the ltibunal observed that the CIT (A) who had allowcd the appcal took into colsideration the amended provisions of Section a0 (a) (ia) and held thc disallowance to be unwauanted. Accordingly, that amount was deleted. The Coufl is of thc opinion that there is no infirmity with the irnpugned findings of the Tribunal since the amendment carne into force w.c.f. I.4.2005,i.e., during the relevant assessment year. 3. I'he second ground of appeal urged is in rcspcct of disallowance of certain amount on account of depreciation towalds printers, scanners and UPS. Thc assessee lrad clairncd 60% deprecialion. Thc AO allor.ved only 25Yo. This Cout notices that the items i.c. printers, scanners and UPS are separatcly covered by two decisions of this Court. i.e.. CIT v. Orient Ceramics and Industries Ltd, (2011) 56 DTR 397 (Del) (in CIT t B Digitally Signed By:AMULYA Signature Not Verified
Lj *t respect of UPS), CIT v. B,S/S Yamuna Powers Ltd., and CIT v. BSE^S Rajdhani Pou'ers Ltd.,lTANo.l267l20l0 and 126612010 in respect of printers and scanners (both decided on 31.08.2010). No substantial question of law arises on this aspect; findings of the 'fribunal are accordingly upheld. 4. 'fhe third ground urged is in respect of the claim made by the assessee to the tune of lts.2,70,82,8591- being penalty on contract. The 'Iribunal held as follows: - "We have heard the rival contentions in tight of the material prodttced and precedent relied upon. We find that Ld. Commissioner of Income Tax (Appeals) has given (t correct finding that the amount oJ Rs.2,i0,-ti2B,5g/- was not actually penalty, but it lt,cts ct recovery nmde on account of deficiencies detected in the quantity and quality of services rendered by it in tcrnts of O&M Ag"eements. Thus, these amount recovered are not for any infraction of law, rather as per the terms of tle conh'ctct. Hence,- in our considered opinion, there is no infirmity in the l "rif,fJ,i{r,!:rf;,go*r'issioner of rnconte T'ax (Appeats), rherefore' we 5. This Cout is of the opinion that the findings are not only concuncnt but based on the facts of the case and no interference is called for. The appeal is dismisscd. S. RAVINDRA BIIAT, J N*,. R.V.EASWAR, J AUGUST 22,20L2 /vks/ u,
More judgments on Section 40(a)(ia)
- Rekha Agarwal, Jaipur vs ITO WD 4(1), JaipurITA 844/JPR/2025[2021-22]Status: Disposed21 Oct 2026AY 2021-22
- Cdg Petchem Limited, Hyderabad vs ITO, Ward - 1(1), HyderabadITA 1900/HYD/2025[2018-2019]Status: Disposed16 Oct 2026AY 2018-2019
- M/S. Shree Laminators Ltd., Kolkata vs DCIT, Circle 4(4), KolkataITA 1534/KOL/2026[2011-2012]Status: Disposed15 Oct 2026AY 2011-2012
- J.D. Marketing, Kolkata vs ITO, Ward 37(1), KolkataITA 1493/KOL/2026[2015-2016]Status: Disposed15 Oct 2026AY 2015-2016
- J.D. Marketing, Kolkata vs ITO, Ward 37(1), KolkataITA 1492/KOL/2026[2013-2014]Status: Disposed15 Oct 2026AY 2013-2014
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