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TMI Blog2016 (6) TMI 845X X X X Extracts X X X X X X X X Extracts X X X X ..... Equally the disallowance on account of repair and maintenance under Section 40(a)(ia) of the Act was made on estimate basis and finally the disallowance had been restricted by the Tribunal at ₹ 1 lac during quantum proceedings. Regarding deletion of penalty by the CIT(A) on addition made on account of deferred tax computed on book profits under Section 115JB of the Act, the Tribunal had observed that clause (viii) was inserted to Explanation 1 below Section 115JB(1) by Finance Act, 2008 but was made retrospective. Since the present case pertained to the assessment year 2007-08, the assessee would not know that retrospective amendment was likely to come later. No illegality or perversity could be demonstrated by learned counsel for the revenue that the findings of the CIT(A) and the Tribunal were erroneous or perverse in any manner. In CIT v. Reliance Petroproducts (P) Limited (2010 (3) TMI 80 - SUPREME COURT) the Apex Court had held that under Section 271(1)(c) of the Act, there has to be concealment of income of the assessee or the assessee must have furnished inaccurate particulars of his income. In the present case, the claim made by the assessee has not been shown t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n progress; (iii) ₹ 27,562/- on account of disallowance of proportionate interest under Section 14-A of the Act; (iv) ₹ 3,01,940/- on account of disallowance under Section 40(a)(ia) of the Act; and (v) ₹ 16,14,610/- on account of capitalization of expenditure on account of building repair and maintenance. Besides charging interest under Sections 234B, 234C and 234D of the Act, proceedings for levy of penalty under Section 271(1)(c) of the Act were also initiated. 3. Feeling aggrieved by the aforesaid assessment order, Annexure A-1, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [for brevity the CIT(A) ]. The CIT(A) vide order dated 1.3.2011 confirmed the additions mentioned at Sr. No. (ii) to (v) and deleted the addition mentioned at Sr. No.(i) above. Against the order dated 1.3.2011, the assessee filed an appeal challenging the additions at Sr. No. (ii) to (v) confirmed by the CIT(A) whereas the revenue challenged the addition at Sr. No. (i) deleted by the CIT(A) before the Tribunal. The Tribunal vide order dated 28.1.2015 (Annexure A-2) set aside the order of the CIT(A) and directed the Assessing Officer t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain details. The appellant had not concealed any particulars of its income or had not furnished inaccurate particulars and so the concealment penalty on such disallowance could not be levied in view of the judgment of the Hon'ble Supreme Court in Commissioner of Income Tax v. Reliance Petroproducts Ltd. (2010) 322 ITR 158 (SC). Hence, the concealment penalty levied on this issue is cancelled. 7. The penalty for disallowance of proportionate interest under Section 14-A of the Act was cancelled by the CIT(A) with the following observations:- 4.3. I have considered the facts of the issue. Penalty for concealment can be levied when the assessee has concealed particulars of income or furnished inaccurate particulars. The disallowance has been made u/s 14A of the Act. The appellant had not concealed particulars of its income or had not furnished inaccurate particulars and so penalty for concealment cannot be levied on such disallowance in view of the judgment of the Hon'ble Supreme Court in Commissioner of Income Tax v. Reliance Petroproducts Ltd. (2010) 322 ITR 158 (SC). Concealment penalty levied on this issue is accordingly cancelled. Ground of appeal No.3 is al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther, the Tribunal held that the disallowance on account of capitalization of interest related to capital work in progress under Section 36(1)(iii) of the Act, the Distillery Division of the assessee had already started functioning and since the details of funds utilized for individual projects were not reconcilable, the assessee had agreed for disallowance of proportionate interest for which the assessee cannot be held liable for either concealing particulars of income or furnishing inaccurate particulars of income. Similarly, though the issue of disallowance of proportionate interest under Section 14A of the Act was not agitated before the Tribunal due to smallness of amount of ₹ 27,562/- but due to the factum that interpretation of this provision had not been settled finally, therefore, no penalty under Section 271(1)(c) of the Act was exigible. Equally the disallowance on account of repair and maintenance under Section 40(a)(ia) of the Act was made on estimate basis and finally the disallowance had been restricted by the Tribunal at ₹ 1 lac during quantum proceedings in ITA No. 429/CHD/2011. Regarding deletion of penalty by the CIT(A) on addition made on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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