Indo Hongkong Industries (P) Ltd., New Delhi DCIT, Circle- 12(1), New Delhi

The Income Tax Appellate Tribunal heard an appeal from Indo Hongkong Industries (P) Ltd. concerning a penalty of Rs. 33,80,701 levied for the assessment year 2006-07. The penalty arose from additions made by the Assessing Officer, who disallowed certain revenue and administrative expenses totalling over Rs. 1 crore, treating them as capital expenditure and subsequently allowing depreciation on them. The assessee had initially declared a total income of Rs. 12,48,000.

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: ‘C’ NEW DELHI

BEFORE SHRI G.S. PANNU, HON’BLE VICE PRESIDENT
&
SHRI K.N. CHARY, JUDICIAL MEMBER

ITA No.-6247/Del/2017
(Assessment Year:2006-07)

Indo Hongkong Industries
(P) Ltd.,
B-56, Shivalik Malviya Nagar
New Dlehi.
PAN No. AAACI0265N
Appellant 

Vs.

DCIT,
Circle 12(1)
New Delhi.
Respondent

Assessee by Sh. Sobagya Agarwal, Adv.
Revenue by Sh. Gaurav Dudeja, Sr. DR

Date of hearing: 30.12.2020
Date of Pronouncement : 30.12.2020

ORDER

PER K. NARASIMHA CHARY, JM

Aggrieved by the order dated 30/08/2017 in appeal No. 67/2017-18/CIT (A), New Delhi passed by the learned Commissioner of Income Tax(Appeals)-22 Delhi (“Ld. CIT(A)”), in the case of M/s Indo Hong Kong industries (P) Ltd (“the assessee”) for the assessment year 2006-07 confirming the penalty, assessee preferred this appeal.

2. Brief facts of the case are that for the assessment year 2006-07, the assessee filed the return of income on 30/11/2006 showing a total income of Rs. 12, 48, 000/-and during the course of assessment proceedings, learned Assessing Officer made an addition of Rs. 1, 19, 56, 652/-on account of default Revenue expenditure, administrative expenses, business promotion and depreciation. The claim of the assessee that the default Revenue expenses to the tune of Rs. 1, 00, 43, 676/-debited in P&L Account was denied and such an expenditure was inadmissible but the learned Assessing Officer allowed depreciation on such account by treating it as capital expenditure. Proceedings under section 271(1)( c ) of the Act were initiated simultaneously and by order dated 21/3/2016 passed under section 271(1)( c ) of the Act, learned Assessing Officer levied a penalty of Rs. 33, 80, 701/-.

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