2019 (4) TMI 1224 - AT - Income Tax

Penalty u/s 271(1)(c) - quantum additions - HELD THAT - Issues regarding quantum additions have been either allowed or set aside to the Assessing Officer by Tribunal therefore, the penalty sustained by Learned CIT(A) do not survive and hence these are deleted. The Assessing Officer in the set aside proceedings may initiate penalties after completion of assessment in accordance with law. - Appeals of the assessee are allowed.

Summary

Issues Involved:
Penalty imposed under section 271(1)(c) of the Act upheld by CIT(A) challenged in four appeals.

Issue 1 - Excess Depreciation:
The Tribunal admitted additional evidence and set aside the issue to the Assessing Officer for reexamination, directing a thorough review and adjudication as per law.

Issue 2 to 4 - Disallowance of Fees:
The Tribunal ruled in favor of the assessee, allowing the entire expenditure in the year claimed, based on agreements and services rendered, rejecting the notion of enduring benefit and spreading the expenditure over multiple years.

Issue 5 - Loose Tools Expenditure:
Regarding loose tools expenditure, the Tribunal remanded the matter to the Assessing Officer for reexamination due to contradictory stands taken by the assessee, directing a fresh assessment in accordance with law.

Issue 6 - Upfront Fee Deduction:
The Tribunal decided in favor of the assessee, allowing the entire upfront fee as a deduction in the relevant assessment year, setting aside the CIT(A)'s order.

The Tribunal found that issues were either allowed in favor of the assessee or remanded to the Assessing Officer for further examination, leading to the deletion of the penalties upheld by the CIT(A). The Assessing Officer was permitted to initiate penalties after completing assessments as per legal provisions. Consequently, all appeals of the assessee were allowed.