Court No.-10 Case:- INCOME TAX APPEAL No.-354 of 2013 (A.Y.-2002-03) Appellant :- Commissioner Of Income Tax, Noida Respondent :- Technip Italy Spa India Project Counsel for Appellant :- Dhananjay Awasthi,Bharat Ji Agarwal, Csc Counsel for Respondent :- Nishant Mishra Hon'ble Arun Tandon,J. Hon'ble Dr. Satish Chandra,J. present appeal is filed by department against impugned order dated 28.06.2013 passed by Income Tax Appellate Tribunal, Delhi in I.T.A. No. 2101/Del./2010 for assessment year 2002-03, where Tribunal has cancelled levy of penalty under Section-271(1)(c) of Act. On 12.12.2013, this Court has admitted appeal on following substantial questions of law"- "(1) Whether on facts and circumstances of case , ITAT erred in law on deleting penalty on ground that quantum has already been deleted and that thee return was filed on NIL income when there is no such exception carved out by legislator in language of Section 271 (1)(c). (2)Whether on facts and circumstances of case ITAT was justified in law in concluding that since quantum has already been deleted , hence, there is no question of penalty absolutely ignoring that order of deletion of quantum has been admitted has been admitted by jurisdiction High Court vide order dated 13.2.2013. (3) Whether on facts and circumstances of case, that ITAT erred in law in concluding that no penalty is leviable as tax sought to be evaded as NIL totally ignoring that NIL income was after adjustment and no tax was paid on returned income and entire amount of TDS was claimed as refundable. (4) Whether on facts and circumstances of case, ITAt was justified in deleting penalty on quantum of addition of Rs.3,55,85,515/- assessed u/s 115-A, without appreciating fact that quantum addition was confirmed by ITAT and there was no two views of taxing income was assessed U/s 115-A." brief facts of case are that assessee is company incorporated in Itlay, was awarded turn key contract by Indian Oil Corporation Ltd. (IOCL) in November 1999 for design, construction and commissioning of hydro treater and hydrogen facility at IOCL's Gowhati refinery. Under terms of contract, Technip was required to supply equipment to IOCL and undertake construction/installation services and related design and engineering services, consideration for which was dominated partly in Indian and partly in Foreign currency. Revenues arising to "Technip" from on shore construction, on shore design and engineering, on shore supply, off shore construction and off shore design and engineering were offered to tax in India by Technip. revenues from off shore supply of equipment were not considered to be chargeable to tax in India. But A.O. has not accepted this plea and made addition. At same time on off shore supply and on estimation of G.P., after rejecting books of account under Section- 145 of Act, A.O. has levied penalty under Section-271(1)(c) of Act. But same was cancelled by both appellate authorities by observing that for all shores supply of equipment and fluctuation of foreign currency, additions were deleted in quantum appeal by Tribunal. Further, it was observed by Tribunal that regarding addition made on account pertaining to fee for design and engineering under Section-115A is concerned, matter is squarely covered in favour of assessee as per ratio laid down in following cases: (1) CIT Vs. S. Dhanabal, (2009) 309 ITR 268 (Del.); (2) Cit Vs. Reliance Products P. Ltd., 332 ITR 158 (SC); and (3) CIT Vs. Amit Jain, 213 (351) ITR 74 (Del.). In abovementioned cases, it was held that assessee had bona-fide belief regarding manner of income on account of design and engineering fees. There is no dispute that computation of income was duly disclosed by assessee and accepted by A.O. In these circumstances, entire addition was deleted by both appellate authorities. Later, this Hon'ble Court upholds same by dismissing appeal filed by department. When addition was deleted in quantum appeal, then there is no justification for levy of penalty. Hence, we find no reason to interfere with impugned orders passed by both appellate authorities and same is hereby sustained alongwith reasons mentioned therein. answer to substantial questions of law are in favour of assessee and against department. In result, appeal filed by department is dismissed. . (Dr. Satish Chandra,J.) (Arun Tandon,J.) Order Date :- 20.4.2015 pp/ Commissioner Of Income-tax, Noida v. Technip Italy Spa India Project