Itxa/468/2010 Of The Commissioner Of Income Tax - 3 Mumbai v. Elpro International Ltd

sas IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.468 OF 2010 The Commissioner of Income Tax-3, Mumbai ..Appellant. V/s.M/s. Elpro International India Ltd.Mr. Vimal Gupta for the appellant. ..Respondent. Mr. Sanjiv M. Shah for the respondent. CORAM : J.P. DEVADHAR AND A.R. JOSHI, JJ. DATED : 13TH JANUARY, 2012 P.C. :- 1.Whether the ITAT was justified in deleting that the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961 ('the Act' for short), is the question raised in this appeal. 2.The assessment year involved herein is AY 1998-99. 3.In the assessment year in question, the assessing officer inter alia disallowed the expenditure of Rs.20 lakhs claimed as expenditure on account of professional fees and added the same to the income of the assessee. On account of the above additions, penalty was also levied under Section 271(1)(c) of the Act. 4.The CIT (A) deleted the penalty on the ground that the claim of the assessee was bonafide. The ITAT has upheld the order of CIT(A). Challenging the order of ITAT, the present appeal is filed. 5.The argument of the revenue is that the disallowance of the professional fees made by the assessing officer has attained finality and hence the ITAT was not justified in deleting the penalty. 6.We see no merit in the above contention. In the present case, Rs.20 lakhs was paid by the assessee as non compete fees and was claimed as revenue expenditure. The assessing officer rejected the contention of the assessee on the ground that professional fees paid being non compete fees was in the nature of acquiring capital asset and hence cannot be allowed as revenue expenditure. The CIT(A) as also the ITAT have held that all the facts relating to the payment of non compete fees as professional charges was disclosed by the assessee and, therefore, it cannot be said that the assessee has concealed the income or furnished inaccurate particulars of income. In our opinion, in the facts of the present case, no fault can be found with the decision of the ITAT. 7.In the result, we see no merit in the appeal and the same is hereby dismissed with no order as to costs. (A.R. JOSHI, J.) (J.P. DEVADHAR, J.)