9911796707
TMI Blog2012 (7) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... e under section 143(3) of the Act had made several additions running into crores which included addition of Rs. 65,15,040/- on account of transfer pricing adjustment u/s. 92CA(3) in relation to professional fees and I.T. implementation fees. The AO had also initiated penalty proceedings under section 271(1)(c) of the Act. The AO noted that though the assessee had disputed the above addition in appeal, the ground was later withdrawn before CIT(A) and addition stood confirmed. The assessee during the penalty proceedings submitted that it had neither concealed any income nor filed inaccurate particulars of income. It was also submitted that mere withdrawal of the ground could not be considered as acceptance of addition by the assessee. The AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... withdrawn the ground before CIT(A) to buy peace of mind and to avoid further litigation which should not be considered as acceptance of addition by the assessee. The assessee also placed reliance on the judgment of Hon'ble Supreme Court in the case of CIT v. Reliance Petroproducts (P.) Ltd. [2010] 322 ITR 158/189 Taxman 322. CIT(A) however did not accept the contentions raised. It was observed by him that the case of the assessee was covered by Explanation-7 to section 271(1)(c) as the assessee had not proved to the satisfaction of the AO or CIT(A) that the price charged/paid was in accordance to provisions of section 92C. Accordingly CIT(A) confirmed the penalty levied aggrieved by which the assessee is in appeal before the Tribunal. 3. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had to withdraw these grounds on which remand was pending to expedite disposal of appeals. The order of CIT(A) was ultimately passed on 10.1.2010. The ld. AR also submitted that the assessee had made detailed submission before CIT(A) in relation to the professional services and I.T. implementation services and also detailed working had been given. The fact that CIT(A) had remanded the matter to the TPO shows that the issue requires fresh consideration in the light of the detailed submission and working given by the assessee. These were therefore required to be considered while deciding penalty which had not been done. Both the AO and CIT(A) had levied penalty without considering these aspects. The assessee had computed internation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proves to the satisfaction of AO/CIT(A), that the transaction had been computed in accordance with the provisions of section 92C no penalty can be levied. Further, the satisfaction of AO/CIT(A) has to be exercised after considering all the relevant facts and circumstances of the case in an objective manner. In this case the addition made by AO had been disputed by the assessee before CIT(A). Before CIT(A), assessee had filed detailed submission giving full details of cost for providing professional services and I.T. implementation services as well as the related working of the international transactions. The very fact that CIT(A) remanded the issue to the AO vide letter dated 5.8.2009 shows that CIT(A) was satisfied that the matter requires ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m assessment proceedings and finding given in the assessment though it may constitute good evidence, is not conclusive in penalty proceedings. CIT(A) has not examined the detailed contentions of the assessee in relation to arm's length price which is necessary to arrive at a fair conclusion in the matter. It has only been stated that the assessee has not proved to satisfaction that international transactions had been computed in accordance with the provisions of section 92C but no reasons have been given as to how the assessee had not proved and whether satisfaction had been arrived at objectively, after considering all relevant facts and circumstances of the case which were subject matter of remand proceedings before AO. Therefore, in our ..... X X X X Extracts X X X X X X X X Extracts X X X X
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