STRIDES ARCOLAB LTD.,NAVI MUMBAI vs. THE INCOME TAX OFFICER 10(3)(4), MUMBAI

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ITA 5878/MUM/2008Status: DisposedITAT Mumbai31 March 2016AY 2002-20032 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal deleted the penalty for both items. The penalty related to the section 35(2AB) deduction was deleted as the quantum addition itself was deleted by a coordinate bench. The penalty for commission income was deleted as it was considered a case of wrong assessment year with a reasonable explanation and a small amount.

What were the facts?

The assessee appealed a penalty imposed under section 271(1)(c) related to a deduction under section 35(2AB) and alleged suppression of commission income. The penalty was partly upheld by the CIT(A).

What were the issues?

Whether penalty under section 271(1)(c) is leviable when the primary addition is deleted, and whether penalty for concealment applies to income wrongly assessed in a particular year but with a reasonable explanation.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 35(2AB)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI ‘L’ BENCH, MUMBAI

Appearances by: Nitesh Joshi, for the assessee N K Chand for the assessee Date of concluding the hearing: January 7, 2016 Date of pronouncing the order: March 31st, 2016 O R D E R Per Pramod Kumar AM:

1. 1. By way of this appeal, the assessee appellant has called into question correctness of learned CIT(A)’s order dated 1st July 2008 partly upholding the penalty of Rs 1,15,65,736 imposed on the assessee under section 271(1)(c) of the Income Tax Act, 1961, for the assessment year 2002-03, to the extent it relates to (a) deduction under section 35(2AB) of Rs 1,86,63,256 and (b) alleged suppression of commission income of Rs 2,88,500.

2. So far as the first item, i.e., quantum disallowance of Rs 1,86,63,256 is concerned, we find that a coordinate bench of this Tribunal, vide order dated 15th December 2015, has deleted the same. Once the quantum addition itself is deleted, the very foundation of related penalty ceases to hold good in law. We, therefore, delete the same.

3. As regards the second item, i.e., addition of Rs 2,88,500 in respect of commission income is concerned, it is sufficient to take note of the fact that this income, according, to the assessee, pertained to the assessment year 2003-04 and has also been assessed as income of the assessment year 2003-04. However, due to some mix up, the TDS credit was erroneously claimed in the assessment year 2002-03. However, as the Assessing Officer brought the said income to tax in this assessment year, the disputed amount is held to be concealed income. At best, it is

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