Case Law Details
DCIT Vs M/s. Prabhudas Liladhar P. Ltd. (ITAT Mumbai)
Conclusion: Payment made by assessee to SEBI under consent order was an allowable business expenditure under section 37(1) and the same was not in the nature of the penalty for infraction of the law.
Held: AO had levied penalty under section 271(1)(c) on the ground that payment paid by assessee to SEBI under consent order was in the nature of the penalty for infraction of the law and was hit by Explanation 1 to section 37(1) and hence was not an allowable business expenditure. It was held once the whole basis of addition itself as made by AO in quantum had been deleted by Tribunal and expenses were held to be business, there was no reason and merit in the penalty being levied by AO u/s 271(1)(c). Thus, penalty levied by AO u/s. 271(1)(c) on payment made by assessee to SEBI under consent order was not sustainable in the eyes of law.
FULL TEXT OF THE ITAT JUDGMENT
This appeal, filed by Revenue, being ITA No. 6479/Mum/2017, is directed against appellate order dated 22.08.2017 passed by learned Commissioner of Income-tax (Appeals)-9, Mumbai (hereinafter called “the CIT(A)”), for assessment year 2009-10, the appellate proceedings had arisen before learned CIT(A) from the penalty order dated 30.03.2015 passed by the learned Assessing Officer ( hereinafter called “ the AO “) u/s 271(1)(c) of the Income-tax Act,1961 for assessment year 2009-10.
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