9911796707
TMI Blog2012 (12) TMI 212X X X X Extracts X X X X X X X X Extracts X X X X ..... peal is dismissed with no order as to costs. X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed the appeal of the appellant herein in respect of Rs.10.81lacs being paid as service charges to M/s Primco Pvt. Ltd. This was allowed by the Commissioner of Income Tax (Appeals) on the ground that the revenue had not produced any material/evidence to show that the labour of M/s Primco Pvt. Ltd. was not utilized by the appellant. (c) The revenue-respondents herein being aggrieved by the Order dated 28th. December 1992 of the Commissioner of Income Tax (Appeals) carried the matter in appeal to the Tribunal. By an order dated 4th May, 2006, the Tribunal allowed the respondent-revenue's appeal holding that during the course of search of the appellants premises documentary evidence was found which showed that the appellant was indulging in manipulating its accounts to reduce its profit. Further the Tribunal held that the deletion of the addition of Rs.10.81lacs paid to M/s Primco Pvt. Ltd. by the Commissioner of Income Tax (Appeals) was without considering the input -output ratios, quantum of production, price of the finished products etc. Therefore, the Tribunal while reversing the order dated 28th. December 1992 of the Commissioner of Income Tax (Appeals) upheld the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 271(1)(c) of the Act with regard to Rs.10.81lacs was upheld. 4) Mr. Arun Sathe, Senior Counsel in support of the appeal submits as under: (a) Penalty not imposable as in quantum proceeding, the Commissioner of Income Tax (Appeals) by order dated 28th. December 1992 has allowed the expenditure of Rs.10.81lacs being service charges (salary and wages) paid to M/s Primco Pvt. Ltd. Therefore as there could be two possible views on the allowability of the expenditure, no penalty is imposable; and (b) In view of the decision of the Apex Court in the matter of Commissioner of Income Tax Vs. Reliance Petroproducts Pvt. Ltd., reported in 322 ITR 158 (SC) = (2010-TIOL-21-SC-IT) no penalty can be imposed merely on account of making an unsustainable claim. Therefore he submits that mere making of a claim which is not sustainable in law, would not amount to furnishing of inaccurate particulars regarding the income; In view of the above, Mr. Sathe the learned Sr. Counsel submits that the Appeal be admitted. 5) Mr. Suresh Kumar, learned Counsel for the Revenue supports the order passed by the Tribunal and submits as under: (a) The order dated 28th December 1992 of the Commissioner of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income Tax (Appeals ) accepting the appellant's submission that an amount of Rs.10.81lacs had been paid to M/s Primco Pvt. Ltd. as reimbursement of wages and salaries would stop the Revenue from imposing penalty under section 271(1)(c) of the Act is not acceptable. This is for the reason that the order dated 28th December, 1992 no longer exists, as the same has been set aside by an order dated 4th May, 2006 passed by the Tribunal. The order of the Tribunal dated 4th May, 2006 is the `final word on the alleged payment of Rs.10.81lacs to M/s Primco Pvt. Ltd. In the above order the Tribunal has held that in fact the payment of Rs.10.81lacs was not made. This finding has also been accepted by the appellant. A notice to show cause why penalty should not be imposed upon the appellant was issued to the appellant on 8th. December 2006 i.e. after the order of the Tribunal dated 4th May, 2006 in quantum proceeding setting aside the order dated 28h. December 1992 of the Commissioner of Income Tax(Appeals). Therefore, an order which has been set aside is an order which does not exist and cannot be relied upon to establish that the payment of Rs.10.81lacs made by the appellant to M/s Primco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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