SHERVANI HOSPITALITIES LTD. Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This appeal by the assessee which relates to the assessment year 2001-02, in effect impugns order dated 26th March, 2010, passed by the Income Tax Appellate Tribunal(tribunal for short) confirming imposition of penalty under Section 271(1)(c) of the Income Tax Act, 1961 (Act, for short). By order dated 19th December, 2011, the following substantial question of law was framed:-

(2.) While framing the question of law, it was observed that the court was not framing any question on the issue of limitation as there is a judgment of the Delhi High Court against the assessee, on the said aspect. It was observed that in case the judgment or ratio is reversed by the Supreme Court, the assessee would be at liberty to raise the said question at the time of hearing.

(3.) The assessee is a company engaged in hospitality services. For the assessment year 2001-02, the assessee filed its return declaring loss of Rs.43,15,328/-. The assessment was completed under Section 143(3) of the Act, vide order dated 27th February, 2004, at a positive income of Rs.9,26,510/-. The Assessing Officer made following additions/ disallowance in the quantum proceedings: " S.No. Particulars Amount 1. Loss of closure of South Extension Unit Rs.25,37,521 2. Capital Expenditure for interior designing Rs.1,32,000 3. Depreciation on assets purchased from M/s Star Hospitality Rs. 3,03,433 4. Donations Rs. 10,494 5. Loss of subsidiary Company Rs.1,39,595 .."