2013 (5) TMI 902 - AT - Income Tax

Summary

Issues involved:
The judgment involves appeals by the revenue against orders of the CIT(A)- III, Hyderabad for the assessment years 2006-07 to 2009-10, focusing on deletion of penalty u/s 271(1)(c) and quantum additions by the CIT(A).

Deletion of Penalty u/s 271(1)(c):
The ITAT Hyderabad considered the case where penalty u/s 271(1)(c) was levied due to a quantum addition made towards rate difference in power tariff. The tribunal held that the penalty cannot be imposed as the assessee did not furnish inaccurate particulars of income or conceal income. Referring to the Supreme Court decision in CIT Vs. Reliance Petro-products Pvt. Ltd., it was emphasized that making an incorrect claim does not amount to furnishing inaccurate particulars. Since the addition was deleted, the penalty on a non-existent addition was also deleted.

Quantum Additions by CIT(A):
The case involved an assessee engaged in power generation and supply to AP Transco. Disputes arose regarding the rate at which income should be accounted for taxation, with the assessee raising invoices at higher rates than accounted for. The ITAT upheld the CIT(A)'s decision, following a previous order for AY 2005-06, stating that income recognition should align with actual receipts. The tribunal directed that income should be taxed in the relevant assessment year when actually received, as per the finality of tariff rate judgments by higher judicial forums.

Final Decision:
The ITAT allowed appeals for statistical purposes in ITA Nos. 3, 5, 6 & 7/Hyd/2013, remitting the issue to the AO with directions similar to AY 2006-07. The appeal in ITA No. 4/Hyd/2013 was dismissed, upholding the deletion of penalty u/s 271(1)(c). The judgment was pronounced on 10/05/2013 by the ITAT Hyderabad.