Income Tax Appellate Tribunal - Delhi
Jcit, New Delhi vs M/S. American Express (India) Pvt. ... on 6 April, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'G' NEW DLEHI
BEFORE SHRI G.D. AGRAWAL, PRESIDENT
AND
SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER
I.T.A. No.4688/Del/2016
Assessment Year: 2005-06
Jt. Commissioner of Income-tax vs M/s American Express (India) P. Ltd.
Special Range-1, New Delhi. Metropolitan Saket, 7th floor office
Block, Distt. Centre, Saket,
New Delhi.
(PAN: AAACA8163F)
(Appellant) (Respondent)
Appellant by: Smt. Aparna Karan, CIT DR
Respondent by: Shri Nageshwar Rao
Date of hearing: 22.03.2018
Date of Pronouncement: 06.04.2018
ORDER
PER K. NARASIMHA CHARY, JM
Aggrieved by the order dated 22.6.2016 in Appeal No.237/15-16, passed by the Commissioner of Income-tax (Appeals) -I, New Delhi {hereinafter referred to as "CIT(A)"}, Revenue preferred this appeal.
2. The assessee, M/s American Express (India) P. Ltd., is wholly owned subsidiary of American Express International Inc., USA and has been deriving its income from the business of manufacturing and export of articles of Data Management, Information Analysis and rendering call centre services to its American Express affiliates. During the Financial Year 2004-05, the assessee carried on its business through the undertakings, viz., FC-East unit and FCE-GGN 2 units which are entitled to claim deduction u/s 10B of the Income-tax Act, 1961 ("the Act"). For the Asstt. Year 2005-06, they have filed their return of income on 30.10.2005 declaring a loss of Rs.32,09,220/-. After scrutiny, learned AO made the following additions:
1 Transfer Pricing Addition Rs.29,00,51,046/- 2 Interest earned on short term deposits Rs.35,62,715/- 3 Interest earned on short term deposits Rs.2,07,57, 519/- 4 Interest earned on income tax refund Rs.10,27,284/-
Simultaneously, learned AO initiated proceedings u/s 271(1)(c) of the Act and levied penalty by way of order dated 28.3.2015.
3. Assessee preferred appeal against the quantum addition and when the matter reached the level of the Tribunal, the Tribunal by way of order dated 16.5.2016 in ITA No.2712/Del/2014 deleted the item Nos. 1 to 3 above. Pursuant to the same, learned AO passed order dated 31.3.2017 u/s 250/254/143(3) of the Act giving effect to the order of the ITAT and deleting the above three additions, leaving behind the only addition to the sustained in respect of the fourth addition of Rs.10,27,284/-.
4. When the learned CIT(A) considered the penalty order dated 28.3.2015, it was in his knowledge that the Tribunal in the quantum proceedings decided three additions in favour of the assessee and the learned CIT(A) considered the sustainability of the penalty in respect of the fourth addition of Rs.10,27,284/-.
5. By way of impugned order, learned CIT(A) noticed that there has been adequate disclosure regarding the claim of deduction u/s 10B of the Act of deduction on interest on income-tax refund was made in the notes to computation filed with the return of income, as such there cannot be any concealment of the particulars of income. He further observed that inasmuch as 3 the only issue to be considered was whether interest income forms part of profits of business or netting of interest income with interest income is allowed, learned CIT(A) answered that when two views are possible, different of opinion between the AO and the assesse cannot expose the assessee to penalty. Learned CIT(A) drew strength from the judicial precedence for this proposition.
6. It is pertinent to note that learned CIT(A) recorded findings that similar question had arisen for consideration in assessee's own case for Asstt. Year 2002- 03 and 2003-04 wherein the issue was decided in favour of the assessee vide orders dated 205.2014 and 12.8.2013 respectively. Observing so learned CIT(A) deleted the penalty which the revenue is challenging before us stating that the learned CIT(A) had committed an error in deleting the same.
7. In so far as the facts are concerned, absolutely there is no dispute. Out of four additions made by the learned AO, three additions were directed to be deleted by the Tribunal by order dated 16.5.2016 in ITA No.2712/Del/2014, a copy of which is placed in the paper book vide page nos.143 to 163. Pursuant thereto, learned AO passed the order dated 31.3.2017 giving effect to the orders of the ITAT and it is to be found at page 264 of the paper book. There is also no dispute from the revenue that in respect of Asstt. Year 2002-03 and 2003-04, a similar question had arisen in assessee's case and such a question was decided in favour of the assessee by orders dated 20.5.2014 and 12.8.2013 respectively. Nothing is brought to our notice disturbing this consistent opinion in the case of the assessee on this issue.
9. Further our attention is drawn to page No.88 of the paper book wherein vide S.No.5 in the notes attached to the computation of total income, a claim for deduction of interest of Rs.10,27,284/- u/s 10B of the Act was disclosed on the income-tax refund and interest on FD of Rs.2,07,57,519/-. In view of this disclosure by the assessee in the computation of income filed along with the 4 return of income, we do not find any factual error committed by the learned CIT(A)/ At the same time, there is no legal error also committed by him inasmuch as no penalty could be sustained merely because a deduction claimed was disallowed. According to us also, these facts do not suggest any concealment of income or furnishing inaccurate particulars by the assessee, as such, the impugned penalty cannot be sustained. With this view of the matter, we do not find any merit in the appeal of the revenue and the same is accordingly dismissed.
10. In the result, appeal of the revenue is dismissed.
Order pronounced in the open court on this the 6th day of April, 2018.
Sd/- sd/-
(G.D. AGRAWAL) (K. NARASIMHA CHARY)
PRESIDENT JUDICIAL MEMBER
Dated: 6th April, 2018
'VJ'
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR, ITAT
By order
Asstt. Registrar