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TMI Blog2013 (11) TMI 362X X X X Extracts X X X X X X X X Extracts X X X X ..... f this dividend income u/s 14A at 2% of the earning of dividend received against which the assessee has not preferred any appeal to the High Court thereby the same becomes conclusive. This results in the presumption that the assessee would have known the eligible disallowance on this issue. When the fact is being so, it is a fit case for levy of penalty – Decided in favor of Revenue. Levy of penalty on disallowance of compensation for agreement for exclusive utilisation in non-compete fees - During the previous year the assessee had paid a sum of Rs.1,05,00,000/- towards compensation for agreement for Exclusive utilisation, non- competitive business practice and keep out covenant. This expenditure in the book of accounts was treated as d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee's appeal relates to the levy of penalty on disallowance of excess depreciation claimed on trucks. The relevant facts are that the assessee, a company while declaring a total income of Rs.2,86,87,904/- had claimed a depreciation on tracks amounting to Rs.1,44,57,382/-. During the assessment proceedings, in response to the notice issued on 21.10.2003, when the AO asked the assessee to explain why the excess depreciation has been claimed on trucks, the assessee submitted a revised working for depreciation on trucks admitting that the depreciation of Rs.22,10,867/- was claimed excessively. The AO thereby disallowed the excess claim. Consequently, the AO levied the minimum penalty on the tax sought to be evaded by the assessee on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue has been raised by the AO vide notice dated 21.10.2003, the assessee has withdrawn the excess claim of depreciation. Hence the same should not be treated as a bonafide mistake of the assessee. But for the excess claim noticed by the AO, the assessee would have walked away with a huge excess deduction to which he is not entitled. 3.2 We have heard both the parties on this ground and perused the material on record. It is pertinent to note that the excess claim of depreciation on trucks has been noticed by AO during the course of assessment proceedings and only after the issuance of notice by the AO, the assessee has withdrawn the excess claim of depreciation. So it is very clear that the assessee has not voluntarily disclosed the wrong ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Mohammed Mohatram Farooqui Vs. CIT (SC) 2010-TIOL-23-Supreme Court-IT. We, therefore, overturn the impugned order on this issue and restore the matter to the file of AO for taking a fresh decision after deciding the matter in quantum proceedings. 5. Ground No. 5 relates to the levy of penalty on the disallowance made u/s 14A of the Act. The relevant facts are that in the assessment framed u/s 143(3) of the Act, the AO noticed that the assessee had not disallowed interest expenses incurred for earning the dividend income and thereby disallowed an amount of Rs.82,04,428/-. On appeal, the Ld.CIT(A), had reduced the same to Rs.54,69,088/-. Consequently, in the penalty proceedings, a penalty of Rs.54,69,088/- has been levied by the AO an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... round of appeal raised by the Revenue relate to the levy of penalty by the AO on disallowance of compensation for agreement for exclusive utilisation in non-compete fees and the same deleted by the Ld. CIT(A). 6.1 The relevant facts are that during the previous year the assessee had paid a sum of Rs.1,05,00,000/- towards compensation for agreement for Exclusive utilisation, non- competitive business practice and keep out covenant. This expenditure in the book of accounts was treated as deferred revenue in nature, the entire sum had been claimed as an allowable expenditure in the year in which the same was incurred, though a different treatment had been adopted in the books of accounts. During the assessment proceedings, it was noticed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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