Deputy Commissioner of Income-tax, Circle - 1(1),, Pune M/s. Applied Micro Circuits India Private Limited,, Pune

This case involves an appeal by the Deputy Commissioner of Income Tax against the deletion of a significant penalty imposed on M/s. Applied Micro Circuits India Pvt. Ltd. The penalty, amounting to Rs.74,87,580, was initially levied under Section 271(1)(c) of the Income Tax Act due to transfer pricing adjustments. The CIT(Appeals) had previously deleted this penalty, leading to the Revenue's current appeal to the Income Tax Appellate Tribunal.

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE

BEFORE SHRI R.S. SYAL, VP AND
SHRI S.S. VISWANETHRA RAVI, JM

ITA No. 2620/PUN/2017
Assessment Year : 2010-11

The Deputy Commissioner of Income Tax,
Circle-1(1), Pune.
Appellant

V/s.

M/s. Applied Micro Circuits India Pvt. Ltd.
601, 6th Floor, Cerebrum IT Park,
Kalyani Nagar, Pune-411 006.
PAN : AAHCA3503C
Respondent

Assessee by : Shri Nikhil Kulthe &
Shri Siddhesh Chaugule
Revenue by : Shri Mahadevan A M Krishnan

Date of Hearing : 29.04.2021 
Date of Pronouncement : 29.04.2021

ORDER

PER R.S. SYAL, VP :

This appeal by the Revenue is directed against the order dated 18.08.2017 pa*ssed by the ld. CIT(Appeals)-13, Pune in relation to the assessment year 2010-11, deleting penalty of Rs.74,87,580/- imposed by the Assessing Officer (AO) u/s.271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as „the Act‟).

2. Briefly stated, the facts of the case are that the assessee company is engaged in the business of designing and development of chip, integrated  circuits and storage components and providing allied services for its holding company AMCC, USA. The assessee filed return declaring total income at Rs. Nil and book profit of Rs.2,25,12,625/- u/s.115JB of the Act. The assessee claimed deduction u/s.10A of the Act at Rs.2.05 crore on the income of its STPI unit. Because of certain international transactions entered into by the assessee, the AO made a reference to the Transfer Pricing Officer (TPO) for determining the arm‟s length price of the international transactions. The TPO passed order u/s.92CA(3) of the Act proposing transfer pricing adjustment of Rs.2,74,67,960/-. In the first appeal, the transfer pricing adjustment was reduced to Rs.2,20,29,573/-. The Assessing Officer invoked Explanation 7 to section 271(1)(c) of the Act and imposed penalty of Rs.74,87,850/- on the amount of transfer pricing addition sustained in the first appeal. The ld. CIT (Appeals) deleted the penalty, against which the Revenue has come up in appeal before the Tribunal.

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