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TMI Blog2023 (2) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... was determined at Rs. 27,08,18,876/- on various disallowances were made by the Assessing Officer. 2.1. On further appeal before Ld. CIT(A) and Hon'ble ITAT the assessee partly succeed its appeal. The Assessing Officer issued a letter dated 07.12.2013 as to why penalty u/s. 271(1)(c) should not be imposed on the various disallowances confirmed by the Appellate Authorities as follows: Particulars Amount Rs. Disallowance u/s. 35D 25,16,488/- Disallowance of deduction u/s. 35E 77,83,160/- Disallowance of Rent & taxes 2,72,81,590/- 2.2. The assessee sought for some time to reply to the show cause notice. However the Assessing Officer levied a penalty of Rs. 1,37,51,914/- u/s. 271(1)(c) of the Act. 2.3. Aggrieved against the same, the assessee filed an appeal before Ld. CIT(A), who cancelled the penalty levied u/s. 271(1)(c) as follows: 6.2 So far as levy of penalty u/s. 271(1)(c) on disallowance u/s 35D of the Act, it is observed that Hon'ble Ahmedabad ITAT AY 2003-04 has held as under: 16.1 From the mindful reading of the above section 35D of the Act, it can be construed that ROC fee is allowable only when paid for registration of the company printing charges are to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dance has been lent from the judgement of Hon'ble Gujarat HC in case of DCIT v. Gujarat Narmada Valley Fertilizers Co. Ltd. (2014) 42 taxmann.com 438 (Gujarat)/(2014) 222 Taxman.com 30 (Gujarat) (MAG), the relevant extract is reproduced as under:- It is an undisputed position that claim under Section 35D of the Act did not arise for consideration for the first time. Since last several years, the Assessing Officer had granted such claim on the same consideration. The Tribunal therefore, correctly held that such claim could not have been suddenly disallowed. We may refer to a decision of this Court in case of Saurashtra Cement & Chemical Industries Ltd. u. CIF (1980) 123 ITR 669/(1979) 2 Taxman.com 22 (Guj.), wherein, in the context of successive claim of tax holiday, the Court held that the ITO was not justified in refusing to continue the benefit of such tax holiday granted to the assessee in the earlier years, without disturbing the relief granted for the initial years. We are conscious that the issue is not identical in nature. However, the Income-tax Act recognizes the principle of consistency. 16.3 We also took a note that where the view taken by AO was incorrect at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgment in the case of Sundaram Finance Ltd. reported in 99 taxmann.com 152 and Hon'ble Supreme Court in the case of Jivanlal and Sons reported in 103 taxmann.com 208 and confirmed the levy of penalty u/s. 271(1)(c) of the Act. 3. Aggrieved against the same, the Revenue is in appeal before the raising the following Grounds of Appeal: i) "Whether, the Ld. Commissioner of Income Tax(appeals) has erred in law and on facts in deleting the penalty of u/s.271(1)(c) of Rs.9,21,035/- levied on addition of Rs.25,16,488/- on account of disallowance u/s.35D of the Act." ii) "Whether, the Ld. Commissioner of Income-Tax(appeals) has erred in law and on facts in deleting the penalty of u/s.271(1)(c) of Rs.99,81,402/- levied on addition of Rs.2,72,71,402/- on account of disallowance of rent, rate and taxes of the Act." iii) On the facts and circumstances of the case, the Ld. Commissioner of Income Tax(appeals) ought to have upheld the order of the Assessing Officer. iv) It is, therefore prayed that the order of the Ld. Commissioner of Income-tax (Appeals) may be set aside and that of the Assessing Officer be restored. 3.1. The Ld. Sr. D.R. Shri Rakesh Jha appearing for the Revenue fairly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s paid to the Revenue Authorities in respect of such lands needs to be capitalized. Hence the AO, disallowed the expenses towards the rent and taxes with respect to such lands amounting to 2,72,81,590.00 and added to the total income of the assessee. Aggrieved assessee preferred an appeal to the learned CIT (A). 27. The assessee before the learned CIT (A) submitted that the project on such land is likely to be executed with the strategic partner Ms Nirma Chemicals Works Limited. As such it has already received a sum of 3,37,83,784.00 in order to the execute the project. 27.1 The assessee also claimed that these expenditures are incurred year after year and there does not come into existence any new fixed assets 27.2 The learned CIT (A) after considering the submission of the assessee deleted the addition made by the AO by observing an under: "5.3. The matter has been gen de consideration and I am inclined to agree with the arguments of the Authorized Representative. Besides the fact that the expenses involved are recurring in nature and do bring into existence any new fixed assets, emphasized by the Authored Representative, laying out of such expense is a necessity to kee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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