Income Tax Appellate Tribunal, Hyderabad Benches, Hyderabad

Parties Involved

Facts Summary

The assessee company, engaged in the business of mining, had e-filed its return of income for the Assessment Year 2014-15, declaring a loss of Rs.3,81,33,177/-. The case was selected for scrutiny assessment under section 143(2) of the Income Tax Act, 1961. The Assessing Officer (AO) passed an order under section 143(3) of the Act, dated 14/12/2016, determining the income of the assessee company at a loss of Rs.1,28,37,269/- after making two disallowances: (i) disallowance of the amount charged by M/s. Bharat Coking Coal Limited (BCCL) towards penalty: Rs.2,51,48,471/-; and (ii) disallowance of cash payments made by the assessee company under section 40A(3) of the Act: Rs.1,47,437/-. The assessee company carried the matter in appeal before the Commissioner of Income Tax (Appeals) (CIT(A)) who vacated both disallowances. The Revenue has appealed against the order of the CIT(A).…

Legal Issues

• 1. Whether the disallowance of Rs. 2,51,48,471/- levied by BCCL for breach of agreement is erroneous?
• 2. Whether the disallowance of Rs. 1,47,437/- made under section 40A(3) of the Act is erroneous?

Judgment Outcome

Decided in favour of Revenue.

Precedents Relied Upon

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