Emerson Process Management Power & ... vs Assessee

Emerson Process Management Vs. Income-tax Officer, Power & Water Solutions India Ward 18(3), New Delhi. Pvt. Ltd. (Formerly known as Westing House Electric Pvt. Ltd.) PAN: AAACW 2693 N

( Appellant ) ( Respondent )

Appellant by : Shri Sarabjot Walia Adv. Respondent by : Smt. Parwinder Kaur Sr. DR

Date of hearing : 12-06-2015 Date of order : 16-06-2015.

ORDER

PER S.V. MEHROTRA, A.M:-

These appeals, by the assessee, are directed against separate orders passed by the ld. CIT(A)-XXIII, New Delhi, assailing the action of ld. CIT(A) in confirming the penalty levied by the AO u/s 271(1)(c) of the Income-tax Act, 1961, relating to A.Y. 2002-03 & 2003-04. Both the appeals were heard together and are being disposed of by this consolidated order for the sake of convenience.

2 ITA no.5677 & 5678/Del/2013

2. Brief facts of the case for AY2002-03 are that assessment was completed u/s 143(3) at an income of Rs. 32,14,630/- a against the returned income of Rs. 1,64,160/-. The assessee company filed appeal before the ld. CIT(A), who disposed of the appeal as under:

Addition of Rs. Of Rs. 574398/- on account of Confirmed Adjustment by increase in Arm's length price As per order of TPO u/s 92 CA of IT Act.

Treating expenditure on acquisition of software of Confirmed Rs. 1940409/- as capital instead of revenue claimed by the assessee.

Addition of Rs. 1699910/- treating amount Only a sum of Rs. Spent on capital work in progress as capital nature 297440/- confirmed.

For rest relief allowed Addition confirmed.

2.1. After considering the assessee's submission the AO imposed a penalty of Rs. 4,82,150/-.

2.2. Ld. CIT(A) confirmed the penalty imposed by AO. Being aggrieved, the assessee is in appeal before us, assailing the action of ld. CIT(A) confirming the penalty on various grounds of appeal.

3. At the outset ld. counsel for the assessee submitted that in quantum appeal the Tribunal vide its order dated 26-3-2015 in ITA no. 3264/Del/2010 has set aside the order of ld. CIT(A), confirming the additions i.e. the very base for levy of impugned penalty and has restored the matter to his file for de novo consideration.

4. We have heard rival submissions and perused the entire material available on record. Since in quantum appeal the addition i.e. the very base for levy of impugned penalty has been set aside and the matter has been restored to the file of CIT(A), we set aside the order of ld. CIT(A) and 3 ITA no.5677 & 5678/Del/2013

restore the matter back to his file for deciding the issue relating to penalty after deciding the quantum appeal.

5. In A.Y. 2003-04, the AO levied penalty of Rs. 2,31,264/- u/s 271 (1)(c) of the Act on account of addition of Rs. 6,29,291/- to the returned income on account of ALP adjustment as per order of TPO u/s 92 CA of the I.T. Act. Ld. CIT(A) confirmed the penalty levied by the AO.

6. We find that in quantum appeal the Tribunal vide its order dated 26-3-

2015 in ITA no. 3265/Del/2010 has set aside the order of ld. CIT(A), confirming the addition made on account of ALP adjustment i.e. the very base for levy of impugned penalty and has restored the matter back to his file for de novo consideration. Therefore, herein also we set aside the order of ld. CIT(A), confirming the penalty in question and restore the matter back to his file for deciding the issue relating to penalty u/s 271(1)(c) after deciding the quantum appeal.

7. In the result both the appeals are allowed for statistical purposes. Order pronounced in open court on 16-06-2015.

Sd/- Sd/- (H.S. SIDHU) ( S.V. MEHROTRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 16-06-2015. MP: Copy to : 1. Assessee 2. AO 3. CIT 4. CIT(A) 5. DR