Dcit, Circle 9(1), R... v. Sierra Industrial En...

Smt. Diva Sing, J.M:— This is an appeal filed by the Department against the order dated 10.09.2010 of CIT(A)-XII, New Delhi on the following grounds:—

1. “On the facts and circumstances of the ld. CIT(A) erred in law as well as on merits in directing to recomputed Penalty imposed u/s. 271(1)(c) at disallowance of Rs. 2,78,849/- (i.e 5% of Rs. 43,24,615/-) in place of Rs. 43,24,615/- which was imposed by the AO u/s. 271(1)(c) on account of disallowance made of Rs. 43,24,615/- out of customer claim and defectives.

2. The appellant craves to amend modify, alter, add or forego any ground of appeal at any time before or during the hearing of this appeal.”

2. Right at the outset ld. AR, Sh. Surender Kumar submitted that the issue is covered as the CIT(A)'s order in quantum proceeding on the issue has been confirmed by the ITAT. Attention was invited to page 74 to 79 of the paper book which contains its order dated 08.10.2010 in ITA No. 1951.Del/10, wherein the department had come in appeal before the ITAT on the following judgments against the action of CIT(A) in granting relief to the assessee to the tune of Rs. 41,08,384/- on account of additional sale proceeds of customer claim & defects to the extent of 5% has been upheld as a departmental appeal has been dismissed. A perusal of the order in quantum proceedings shows that before the ITAT its department had come in appeal on the following ground:—

“Ld. Commissioner of Income (Appeals) erred, in law and on the facts and circumstances of the case, in restricting the disallowance of Rs. 43,24,615/- made by the AO on account of additional sale proceeds of the customer claims and defectives to 5% and thereby allowing relief to the assessee amount to Rs. 41,08,384/-.”

The ld. AR relying upon K.C Builders v. ACIT 265 ITR 562 (SC) submitted that the impugned order deserves to be upheld.

3. The ld. DR confronted with the order of the Tribunal could not point out to any infirmity in the direction given by the CIT(A).

4. In the aforementioned peculiar facts and circumstances taking into consideration the order of the Tribunal in the quantum proceedings and the judgment of the Apex Court relied upon by the assessee being satisfied by the reasoning and finding of the CIT(A). The ground raised by the department is dismissed.

5. In the result, the appeal of the department is dismissed.