TMI Blog2013 (1) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee had made adequate disclosure in its return with respect to the unrealized export proceeds at the time of filing its ROI, no fault on the conduct of the assessee found. Thus respectfully following the decision in the case of DSL Software Ltd. (2012 (4) TMI 360 - ITAT DELHI) and the Circulars issued by the competent authority, i.e. RBI, with regard to receipt of export proceeds, and also the fact that the AO himself had dropped the penalty proceedings on same facts in the subsequent year penalty under section 271(1)(c) is not exigible in the instant case - in favour of assessee. - ITA No.7459/Mum/2011 - - - Dated:- 9-1-2013 - Rajendra Singh And Vivek Varma, JJ. Appellant Rep by: Mr V Krishnamoorthy Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO observed that the assessee could not furnish any reason for treating the unrealized export proceeds, eligible for claim for exemption u/s 10A. He, accordingly, added back ₹ 13,72,927/- and initiated penalty proceedings u/s 271(1)(c). 4. In the penalty proceedings, the assessee reiterated its submissions that information with regard to the non-realization of export proceeds was duly made in the Form No. 56 of the Audit Report and that there was no deliberate attempt on the part of the assessee to make an illegitimate claim u/s 10A. The assessee pleaded that since there was no malafide intention on the part of the assessee, its case for penalty to be dropped is squarely covered by the decision of Hon ble Supreme Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articulars. Further, the Delhi High Court in the case of CIT vs Bhramaputra Consortium Ltd. (supra) on the similar set of facts has held that the claim of deduction of the fee paid to ROC to increase the authorized share capital though cannot be treated as revenue expenditure in view of the categorical judgment of the Apex Court in the case of Punjab State Industrial Development Corporation Ltd. vs. CIT reported in 225 ITR 792 (SC), however, penalty cannot be imposed as the appellant had not filed any wrong particulars of income or made a false claim. Therefore, in view of the foregoing and following the decision of the Hon ble Delhi High Court, the penalty levied by the Ld. AO is not sustainable in law. I am, therefore, of the opinion that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Competent Authority guarding the FOREX movement, wherein the RBI has relaxed the repatriation of export proceeds for units at SEZs without any time limit and for STPI units till the completion of one year from the date of export. The AR submits that even Explanation 1 to the impugned section refers to the competent authority for regulating payments and dealings in foreign exchange, and that competent authority in the relevant section is RBI. He, therefore, submitted that the non receipt of export proceeds was not only intimated by the assessee through form No. 56F appended to Audit Report and computation accompanying the ROI, but was well within the ambit and regulations of the competent authority, i.e. RBI. 12. The AR submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned orders concluded that a disallowance of quantum of a claim of deduction does not necessarily imply concealment or furnishing of inaccurate particulars because the issue regarding allowability of deduction u/s 10A as well as u/s 80HHE were debatable issues. We find that it is not a case where the assessee has not disclosed full details at the time of filing of returns or during the course of assessment proceedings. In terms of provisions of sec. 10A(5) and 80HHE(4) of the Act, the deduction under these sections is not admissible unless the assessee furnishes in the prescribed form, along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AR further pointed out that in the similar circumstances, the AO himself dropped penalty proceedings, after making the disallowance in the assessment order, pertaining to assessment year 2005-06 (the AR submitted the copies of assessment order and order dropping the penalty u/s 271(1)(c), as initiated by him). 14. The AR, therefore, submitted that the impugned disallowance, resulting in penalty cannot be attributed to be the malafide intention of the assessee or that there was a deliberate attempt on the part of the assessee to have claimed the exemption on the unrealized export proceeds, when the Act on its own provides that the foreign exchange transaction has to be managed by the competent authority, i.e. the RBI. 15. The AR, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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