CIT Vs. TEDCO GRANITE LTD

JUDGEMENT

(1.) The Revenue is aggrieved against the order dated 22nd January, 2010 passed by the Income Tax Appellate Tribunal (tribunal, for short) deleting penalty under Section 271(1)(c) of the Income Tax Act, 1961 (Act, for short). For the assessment year 2001-02, the assessee had returned loss of Rs. (-)5,72,51,810/-. Assessment order was passed making several additions and the taxable income was assessed at Rs. 2,59,52,863/-. The Assessing Officer had disallowed bad debts on three heads namely, (i) subsidy not received from the Government of Rs. 7,18,730/-, (ii) special drought discount of Rs. 79,03,809/- and (iii) dealers discount of Rs. 51,04,000/-.

(2.) The CIT(Appeals) in quantum proceedings granted substantial relief to the assessee and deleted most of additions made by the Assessing Officer except the three additions mentioned above. As a result of the order passed by the CIT(Appeals) in the quantum proceedings, the taxable income of the assessee for the assessment year 2001-02 was assessed at a negative figure of Rs. 4,35,20,671/-. The assessee was a sick company under the provision of Sick Industrial Companies (Special Provisions) Act, 1985. The respondent-assessee thereafter did not prefer any appeal.

(3.) The respondent-assessee had filed an application under Section 46A before the CIT(Appeals) for production of additional evidence in the quantum proceedings and the Assessing Officer had furnished remand report dated 23.06.2004. The additional evidence submitted by the assessee was taken on record and considered by the CIT(Appeals). After referring to the additional evidence, several additions as noticed as noticed above were deleted.