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2019 (5) TMI 774 - AT - Income TaxPenalty u/s 271(1)(c) - addition of bogus purchases - HELD THAT - As relying on M/S. ORIENTAL CLEARING AGENCIES VERSUS THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 4, PUNE 2017 (11) TMI 1765 - ITAT PUNE bogus purchase was offered as income of the assessee and the penalties were initiated for concealment of income. On these facts, the Tribunal held in this case stating that the penalty u/s 271(1)(c) of the Act initiated and levied under the wrong charge and the same is unsustainable In the case of bogus purchase, the correct charge/correct limb should have been the one relating to the default of furnishing of inaccurate particulars of income and not the concealment of income as the bogus purchases are very much recorded in the books of account. The penalty levied by the Assessing Officer in both the appeals are unsustainable on legal issue. Therefore, we find the orders of the CIT(A) in both the years are fair and reasonable and they do not call for any interference.- Decided in favour of assessee. Claim of deduction u/s 80IA(4)(iv)(a) - assessee claimed the set off of loss pertaining to the windmill unit against the profits of other undertaking of the assessee - HELD THAT - As decided in assessee own case 2018 (4) TMI 1627 - ITAT PUNE it was running civil construction activity from which it was showing profits from year to year and the losses arising from windmill in the earlier years have already been set off against the said income and the balance income had been assessed in the hands of assessee. It is not case of Revenue that after adjustment of losses in the respective years the assessee had shown any losses. There is no merit in the order of Assessing Officer in holding that deemed losses have to be adjusted against profits of undertaking. In view thereof, we hold that the assessee was entitled to the claim of deduction under section 80IA(4)(iv)(a) - Decided in favour of assessee.
Issues Involved:
1. Deletion of penalty under Section 271(1)(c) for the assessment years 2008-09 and 2010-11. 2. Eligibility for deduction under Section 80IA(4)(iv) for the assessment year 2012-13. Detailed Analysis: Issue 1: Deletion of Penalty under Section 271(1)(c) for Assessment Years 2008-09 and 2010-11 Background Facts: - The assessee is engaged in trading AC Sheets. - A survey action under Section 133A on 04.01.2013 revealed bogus purchases. - The assessee declared additional income of ?2,22,00,712 for 2008-09 and ?1,61,93,716 for 2010-11. - The reassessment was completed without further additions, but the Assessing Officer (AO) initiated penalty proceedings under Section 271(1)(c) for concealment of income. Assessing Officer's Position: - The AO levied penalties of ?68,60,020 for 2008-09 and ?50,03,858 for 2010-11, citing concealment of income. CIT(A)'s Decision: - The CIT(A) deleted the penalties, relying on the Pune Bench of the Tribunal's decision in the case of Dilip Yeshwant Oak. Tribunal's Analysis: - The Tribunal noted that the issue involved bogus purchases, which were recorded in the books of account and returns of income. - The Tribunal referenced the case of M/s. Oriental Clearing Agencies vs. DCIT, where it was held that such cases should be treated as furnishing inaccurate particulars of income, not concealment. - The Tribunal concluded that the penalty was levied under the wrong charge and was thus unsustainable. Conclusion: - The Tribunal upheld the CIT(A)'s decision to delete the penalties, dismissing the Revenue's appeals on technical grounds without addressing the merits of the penalty. Issue 2: Eligibility for Deduction under Section 80IA(4)(iv) for Assessment Year 2012-13 Background Facts: - The assessee, engaged in civil engineering and electricity generation through windmills, claimed a deduction under Section 80IA(4)(iv)(a). - The AO denied the deduction, arguing that losses from earlier years should be set off against current profits as per Section 80IA(5). CIT(A)'s Decision: - The CIT(A) granted relief, relying on the Tribunal's decision in the assessee's own case for previous assessment years (2004-05 to 2010-11). Tribunal's Analysis: - The Tribunal referenced its earlier decision for the assessment year 2011-12, where it allowed the deduction under similar facts. - It was noted that the losses from windmill activity had already been set off against profits from other business activities in earlier years. - The Tribunal found no merit in the Revenue's argument that deemed losses should be adjusted against current profits. Conclusion: - The Tribunal upheld the CIT(A)'s decision, affirming the assessee's eligibility for the deduction under Section 80IA(4)(iv)(a) and dismissing the Revenue's appeal. Final Judgment: - All three appeals by the Revenue were dismissed, with the Tribunal affirming the CIT(A)'s decisions on both the deletion of penalties under Section 271(1)(c) for the assessment years 2008-09 and 2010-11, and the eligibility for deduction under Section 80IA(4)(iv) for the assessment year 2012-13.
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