TMI Blog2012 (9) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... rwal, CA. ORDER PER G.D. AGRAWAL, VP : The only ground raised in this appeal by the Revenue reads as under:- On the facts and circumstances of the case, the CIT(A) was justified in deleting penalty u/s 271(1)(c) despite a patently incorrect claim of the deduction as no export proceeds were received after the date of STPI approval for exemption u/s 10A in that financial year. 2. At the time of hearing before us, it is stated by the learned DR that during the year under consideration, the assessee got STPI (Software Technology Park of India) approval on 20th March, 2006. Thus, in view of the CBDT Circular No.1 dated 6th January, 2005, the receipt of the assessee after 20th March, 2006 was eligible for deduction under Section 10A. That the entire receipt of the assessee was before 20th March, 2006, therefore, she was not entitled to exemption under Section 10A, though she claimed the deduction amounting to ₹ 13,88,200/-. The claim of the assessee under Section 10A was patently wrong and false, therefore, in view of the decision of Hon ble Jurisdictional High Court in the case of Commissioner of Income-tax Vs. Zoom Communication P.Ltd. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld as under:- 9. The provisions nowhere suggest or imply that research and development facility is to be approved from a particular date and, in other words, it is nowhere suggested that date of approval only will be cut-off date for eligibility of weighted deduction on the expenses incurred from that date onwards. A plain reading clearly manifests that the assessee has to develop facility, which presupposes incurring expenditure in this behalf, application to the prescribed authority, who after following proper procedure will approve the facility or otherwise and the assessee will be entitled to weighted deduction of any and all expenditure so incurred. The Tribunal has, therefore, come to the conclusion that on plain reading of section itself, the assessee is entitled to weighted deduction on expenditure so incurred by the assessee for development of facility. The Tribunal has also considered Rule 6(5A) and Form No.3CM and come to the conclusion that a plain and harmonious reading of Rule and Form clearly suggests that once facility is approved, the entire expenditure so incurred on development of R D facility has to be allowed for weighted deduction as provided by Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Petroproducts Pvt.Ltd. (supra) would be squarely applicable. 6. We have carefully considered the arguments of both the sides and perused the material placed before us. We find that the Hon ble Jurisdictional High Court in the case of Zoom Communication P.Ltd. (supra) relied upon by the learned DR considered the decision of Hon ble Apex Court in the case of Reliance Petroproducts Pvt.Ltd. (supra) relied upon by the learned counsel for the assessee and held as under:- In the case of Reliance Petroproducts P.Ltd. [2010] 322 ITR 158 (SC), the addition made by the Assessing Officer in respect of the interest claimed as a deduction under section 36(1)(iii) of the Act was deleted by the Commissioner of Income-tax (Appeals) though it was later restored, by the Tribunal, to the Assessing Officer. The appeal filed by the assessee against the order of the Tribunal was admitted by the High Court. It was, in these circumstances, that the Tribunal came to the conclusion that the assessee had neither concealed the income nor filed inaccurate particulars thereof. In recording this finding, the Tribunal felt that if two views of the claim of the assessee were possible, the explanation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is a company which must be having professional assistance in computation of its income, and its accounts are compulsorily subjected to audit. In the absence of any details from the assessee, we fail to appreciate how such deductions could have been left out while computing the income of the assessee-company and how it could also have escaped the attention of the auditors of the company. 7. Thus, after considering the decision in the case of Reliance Petroproducts Pvt.Ltd. (supra), it was stated by the Hon ble Jurisdictional High Court that mere submitting a claim which is incorrect in law would not amount to giving inaccurate particulars of the income of the assessee but if the claim, besides being incorrect in law is mala fide, Explanation 1 to Section 271(1)(c) would come into play. If the assessee s claim is bona fide, then he will not be liable for penalty. Therefore, the precise question to be adjudicated by us is whether the assessee s claim was bona fide or mala fide. 8. After considering the facts of the case and the arguments of both the sides, we are clearly of the opinion that the assessee s claim was bona fide. Admittedly, the assessee has fulfilled ..... X X X X Extracts X X X X X X X X Extracts X X X X
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