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TAXAP/148/2011 4/ 4 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 148 of 2011
=========================================================
COMMISSIONER
OF INCOME TAX-II - Appellant(s)
Versus
MAMTA
MACHINERY PVT LTD - Opponent(s)
=========================================================
Appearance
:
MRS
MAUNA M BHATT for
Appellant(s) : 1,
MR MANISH J SHAH for Opponent(s) :
1,
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CORAM
:
HONOURABLE
MR.JUSTICE AKIL KURESHI
and
HONOURABLE
MS JUSTICE SONIA GOKANI
Date
: 19/10/2011
ORAL
ORDER
(Per
: HONOURABLE MS JUSTICE SONIA GOKANI)
Revenue
has challenged the order of the Income Tax Appellate Tribunal dated
16th July, 2010 proposing following question of law for
consideration:
“Whether
the Appellate Tribunal is right in law and on facts in deleting levy
of penalty on commission income and rate difference in foreign
exchange?”
Heard
learned counsel Mrs. Mauna Bhatt for the revenue and learned counsel
Mr. Shah for Caveator-respondent. At the outset, it was pointed out
to us that the issue concerns levying of the penalty, only in
relation to the commission income and not on account of rate
difference on the foreign exchange as suggested in the question
proposed.
As
can be noted, the CIT (A) in its order had confirmed the levying of
the penalty on commission income of Rs.19,63,490/- from the business
profit from computation of deduction under Section 80HHC. The
Tribunal in its discussion has noted that this was a debatable issue
and therefore, there was no justification in levying the penalty as
has been done. As has been pointed out to us, this Court in Tax
Appeal No.1786 of 2010 also adjudicated an identical question and
upheld the order of the Tribunal of not sustaining the order of the
Assessing Officer of imposing the penalty in the following manner:
“Issue
pertains to penalty under section 271(1)(c) of the Income Tax Act,
1961. The Assessing Officer imposed penalty for claim made by the
assessee under section 80HHC of the Act, but found not acceptable.
CIT (Appeals), rejected the assessee’s appeal. In further appeal, the
Tribunal, however, restored the matter to the file of the Assessing
Officer for working out the penalty making following observations :
“16. In
this year, penalty under section 271(1)(c) is levied on addition made
by the AO by disallowing the claim of assessee for deduction under
section 80HHC on commission, interest etc. The AO levied the penalty
in respect of entire addition without identifying as to which items
were in the knowledge of the assessee that they were required to be
excluded. The ld. CIT(A) practically restored the matter to the file
of AO for working out those items of addition for calculating
deduction under section 80HHC which were in the knowledge of
assessee.
17. We
have heard ld. AR and Ld. DR. Since it has to be satisfied as to
which item under Explanation (baa) to section 80HHC is clearly
disallowable and which items are debatable we restore the matter to
the file of AO for re-working out the levy of penalty after giving
an opportunity of being heard and identifying clearly those items
which cannot at all be treated as income derived from export
activities. No penalty under section 271(1)(c) can be levied in
respect of items of exclusion of income which are debatable. We
accordingly, allow the appeal of assessee but for statistical
purposes.”
We
see no reason to interfere. The Tribunal to the extent the claim was
dependable directed the Assessing Officer not to levy penalty and
for the rest of the items, the Assessing Officer was permitted to
pass fresh order No question of law arises. Tax Appeal is
dismissed”.
The
question has since already been decided by this Court and as
the treatment accorded to the same by the Tribunal in the present
Tax Appeal also warrants no interference and when no further
question of law is at large, this tax appeal is dismissed.
(AKIL
KURESHI, J.)
(Ms.
SONIA GOKANI, J.)
(ashish)
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