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TMI Blog2015 (10) TMI 2239X X X X Extracts X X X X X X X X Extracts X X X X ..... hed. Hence, from the spirit of the scheme, it is seen that it is not voluntary in nature and accordingly, in the circumstances, when the assets are in the process of being sold out, the employees are made to go and the business is being in the process of closure down. In these circumstances, the appellant’s contention that their case is not covered by the scheme contemplated by section 35DDA has to be accepted. - Decided in favour of assessee. Penalty imposed u/s. 271(1)(c) - once the impugned addition on the basis of which the penalty was imposed by the Assessing Officer, stands deleted by us, there remains no justification to hold that the assessee had furnished inaccurate particulars of its income. Therefore, the very basis for imposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2004 declaring total loss of ₹ 815,49,10,915/- and claimed ₹ 16,09,740/- as refund on account of tax deducted at source. The assessment of the assessee was completed u/s. 143(3) vide order dated 15.11.2006, assessing the total income of ₹ 38,57,489/-. This assessment was revised by the learned CIT u/s. 263 of the Act vide order dated 23.03.2009 on the limited issue of deduction allowable u/s. 35DDA and restored the matter to the file of the Assessing Officer. Thereafter, the Assessing Officer after hearing the assessee passed fresh assessment order u/s. 143(3)/263 vide order dated 27.11.2009 by further making disallowance of ₹ 90,40,000/- i.e., 4/5th of the total payments on account of expenditure on payment made to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vaded by the assessee. The assessee preferred an appeal before the ld. CIT(A) against the penalty order, where the ld. CIT(A) deleted the penalty vide impugned order dated 30.08.2013. The Revenue was not satisfied with the order of CIT(A). Hence, this appeal before us. 4. The learned AR of the assessee submitted that the voluntary separation scheme of the Company was compulsory in nature to be opted by all the employees and workers not availing the offer, shall be paid retrenchment compensation which was evident from the above circular and hence, it should not strictly be interpreted with section 35DDA(1) of the IT Act. It was submitted that the business of the assessee has been closed down by the decision of the Govt. of India and there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o employees under VSS. This amount should have been deferred over the period of five years and 4/5th of the amount should have been added to the total income after allowing 1/5th u/s. 35DDA(1). The provisions of section 35DDA clearly provide that only 1/5th of the amount paid in accordance with the scheme of Voluntary Retirement could be allowed in the year under consideration. He further stated that the appellant has introduced the scheme named as VSS , but it was compulsory in nature to be opted by all the employees is not acceptable. Para 2 of the circular dated 19.09.2002 says that workers not available the voluntary separation during this period shall be paid retrenchment compensation under the Industrial Dispute Act after obtaining th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any previous year by way of payment of any sum to an employee in connection with his voluntary retirement, in accordance with any scheme or schemes of voluntary retirement, one-fifth of the amount so paid shall be deducted in computing the profits and gains of the business for that previous year, and the balance shall be deducted in equal installments for each of the four immediately succeeding previous years. After considering the submissions of the assessee in the light of above section and the facts on record, it is seen that section 35DDA pre-supposes that there is a continuance and existence of business for next relevant years on going concern concept basis, which is not the fact in the assessee s case. Here, the Govt. of India ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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