TOSCANA LASTS LTD. Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS appeal filed by the assessee emanates from the order of CIT(A) -XIX. New Delhi dt. 11th Aug., 2010 for the asst. yr. 2000 -01. The assessee is engaged in the business of manufacturing and sale of wooden shoe lasts, i.e., wooden pieces put in the shoes to save it from collapsing. The assessment under s. 143(3) was made on 28th Feb., 2003 and the following additions were made:

(2.) WITHOUT prejudice to ground No. 'I' above, that the learned CIT(A) has erred on the facts and circumstances of the case in confirming the levy of penalty in respect of disallowance of payments Rs. 3,89,78,000 towards administrative charges (other than expenses relating to production and sale) made to M/s. APR Ltd., as not related to the business of the appellant company particularly when the appellant company did not have the requisite infrastructure to perform necessary administrative tasks as is evident from the assessment records of various assessment years.

(3.) WITHOUT prejudice to ground No. 'I' above, that the learned CIT(A) has erred on facts and circumstances of the case in justifying the levy of penalty in respect of expenses amounting to Rs. 72,794 lying unpaid as on March 2003 out of claim of Rs. 3,96,801 made in accounts in the year under appeal i.e., asst. yr. 2000 -01 treating the liability as unascertained liability. The same is admissible in accordance with the mercantile system/accrual principle being followed by the appellant company.