Disallowance on account of liquidated damages under the Income Tax Act


Quick Summary
This Income Tax Appellate Tribunal case involved M/s. Fibcom India Limited and the Assistant Commissioner of Income Tax concerning disallowance related to liquidated damages. The appeal was dismissed as the assessee opted for the Direct Tax Vivad Se Vishwas Act, 2020. The Tribunal clarified that the appeal could be restored if the dispute isn't fully settled under the scheme.

Court :
ITAT Delhi

Brief :
This appeal by Assessee is filed against the order of Learned Commissioner of Income Tax (Appeals)-3, New Delhi, [“Ld. CIT(A)”, for short], dated 25.09.2018 for Assessment Year 2015-16.

Citation :
ITA No:- 8143/Del/2018

IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH: ‘B’: NEW DELHI)
(THROUGH VIDEO CONFERENCING)
BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER
AND
SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER
ITA No:- 8143/Del/2018
(Assessment Year: 2015-16)

M/s. FIBCOM INDIA LIMITED
LGF-84, World Trade Centre
Barakhamba Lane,
New Delhi-110001

vs

Asstt. Commissioner of
Income Tax,
Cirlce-9(1),
New Delhi.

Assessee By : Shri Sidhant Arora, CA
Revenue By : Md. Gayasuddin Ansari, Sr. DR

At the time of hearing, at the outset, we took notice of letter sent by M/s Arora and Bansal, Chartered Accountants, the Authorised Representatives of the assessee, informing that the assessee has opted for Direct Tax Vivad Se Vishwas Act, 2020 (“VSVS”, for short). It was further informed in their letter that Designated Authority under VSVS had issued Form-3 already and that the assessee had also filed Form-4 under VSVS. At the time of hearing before us, the Learned Authorised Representative (“Ld. AR” for short) for assessee as well as the learned Senior Departmental Representative (“Ld. Sr. DR”, for short) submitted before us that this appeal may be treated as withdrawn and may be dismissed on account of the aforesaid VSVS.

2. Before we part, we hereby clarify, by way of abundant caution, that if the disputes under this appeal are not fully settled under VSVS, then the assessee will be at liberty to approach ITAT for restoration of this appeal in accordance with law.

3.  In the result, this appeal is dismissed. This order has been already pronounced on 15th September, 2021 in Open Court, in the presence of Representatives of both sides; after conclusion of the hearing. Now, this written order is signed today on 16/09/2021.

Please find attached the enclosed file for the full judgement

FAQ :

The case concerned the disallowance of liquidated damages under the Income Tax Act, with M/s. Fibcom India Limited as the assessee.

The appeal was dismissed because the assessee, M/s. Fibcom India Limited, opted for the Direct Tax Vivad Se Vishwas Act, 2020, and the dispute was being settled under that scheme.

The Vivad Se Vishwas Act, 2020 is a scheme that allows taxpayers to settle tax disputes.

Yes, the assessee is at liberty to approach the ITAT for restoration of the appeal if the disputes are not fully settled under the Vivad Se Vishwas scheme.

 

Poojitha Raam Vinay
Published in Income Tax
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