9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (12) TMI 892 - AT - Income TaxReceipts of crane hire charges, sale of empty gunny bags/drums and insurance claim - eligible for deduction u/s 80IA or not - Held that - Following COMMISSIONER OF INCOME-TAX Versus ESCORTS FINANCE LTD. 2009 (8) TMI 677 - DELHI HIGH COURT - Even the ex-facie bogus claims attracts penalty - The assessee did not explain to the Income-tax Appellate Tribunal as to in what circumstances and on account of whose mistake, the amounts claimed as deductions in this case were not added, while computing the income of the assessee-company - The income should inextricably have a direct nexus with the ongoing business of the assessee. Insurance claim, sale of empty gunny bags and crane hire charges, though may be part of the business of the assessee but did not have direct nexus - Decided against assessee.
Issues:
Levy of penalty under section 271(1)(c) for inclusion of certain receipts in deduction u/s 80IA. Detailed Analysis: The appeal was filed against the order of CIT(A) regarding the levy of penalty u/s 271(1)(c) at Rs. 3,00,823. The assessee claimed deduction u/s 80IA, including insurance claim, crane hire charges, and sale of empty gunny bags/drums. The AO held that these receipts did not fall within the category of income derived from the business, reducing the deduction and adding the sums to the assessee's income, leading to the penalty proceedings. The assessee argued that there was no deliberate attempt to conceal income or furnish inaccurate particulars, as the primary facts were provided to the revenue authorities. However, both the AO and CIT(A) rejected these arguments, sustaining the levy of penalty u/s 271(1)(c). The AR contended that the penalty should not be levied as there were no inaccurate particulars, just a difference in inferences between the revenue authorities and the assessee. The ITAT analyzed the nature of the receipts claimed for deduction u/s 80IA, emphasizing that income must be derived directly from the business activity. Citing judicial precedents, the ITAT clarified that the receipts in question, such as crane hire charges and sale of gunny bags/drums, did not have a direct nexus with the business operation. The ITAT highlighted that even if income was earned during the course of business, it did not absolve the assessee from making infirm claims. Referring to the decision in Reliance Petroproducts Ltd., the ITAT noted that the case did not support the assessee's claim as it involved disallowed claims contrary to existing law. The ITAT concluded that the revenue authorities were correct in disallowing the claims and initiating penalty proceedings due to the deliberate inclusion of non-allowable receipts. Therefore, the ITAT sustained the orders of the revenue authorities, dismissing the appeal and upholding the levy of penalty u/s 271(1)(c). In summary, the judgment focused on the requirement for income to be directly derived from business activities to qualify for deductions under section 80IA. The ITAT emphasized the importance of accurate claims and rejected the argument that the disputed receipts were eligible for deduction. The decision highlighted the significance of consistent judicial interpretations and upheld the penalty for including non-allowable receipts in the claim for deduction.
|
