TMI Blog2018 (3) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... 0IC. Thus, it is a case where legal claim was raised by the assessee as to deduction u/s 80IC w.r.t. manufacturing done by the assessee at Vaibhav’s unit at Baddi, HP which ultimately did not found favour with the Revenue and the issue is squarely covered by decision in the case of Reliance Petroproducts Private Limited (2010 (3) TMI 80 - SUPREME COURT) wherein it is held that just making of legal claim which does not found favour with Revenue will not make the taxpayer automatically liable for penalty. - Decided against revenue. - I.T.A. No. 7529/Mum/2011 - - - Dated:- 27-2-2018 - SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Assessee : Shri. Vijay Mehta For The Revenue : Shri. R.P Meena, CIT DR ORDER PER RAMIT KOCHAR, Accountant Member This appeal, filed by the assessee, being ITA No. 7529/Mum/2011 for assessment year 2006-07, is directed against the appellate order dated 29.08.2011 passed by learned Commissioner of Income-tax (Appeals)-39, Mumbai (hereinafter called the CIT(A) ) for assessment year 2006-07, appellate proceedings had arisen before learned CIT(A) from the penalty order dated 29.06.2010 passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Machinery of the assessee unit at Baddi were still in the process of being installed during the relevant previous year under consideration. On being asked by the A.O as to why deduction u/s. 80IC for the unit of Baddi(HP) should not be disallowed as the said unit has not even started manufacturing activity, the assessee submitted before the AO during the course of assessment proceedings u/s 153A r.w.s. 143(3), as under:- The assessee has got part of the total manufacturing activities done from Vaibhav Healthcare Private Limited. The assessee has obtained the necessary licenses for manufacture of pharmaceutical products, has received the orders from the customers, purchased raw material and packing material, recruited and deputed staff for supervision and control of production and also effected the sales. The conversion of raw materials to finished goods was done by Vaibhav Healthcare Private Limited for which the job charges were paid. It may further be mentioned that in case of any problem with the goods manufactured, the assessee is fully responsible and liable. 02) On the facts of the case, the assessee is fully eligible for deduction u/s. 80IC. 03) It may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services of certain employees of other company were also utilised in that process, the manufacturing activity was really that of the assessee. It was the assessee which purchased the raw material and packing materials. The employees of other company carried out the manufactured of drugs and pharmaceuticals under the direct technical supervision of the expert staff employed by the assessee and the products manufactured were of the quality prescribed by the assessee. The risk for entire operation was that of the assessee. In view of this, it cannot be said that it was not the assessee but the other company which manufactured the said drugs and pharmaceuticals, the goods in question. The assessee must be regarded as the manufacture of the said drugs and pharmaceutical products, it is clear that the income of the assessee attributable to the said manufacturing activity in respect of the respective previous years, which are relevant to the aforesaid assessment years, was not less that 51 per cent of its total income. (iii) Commissioner of Income Tax vs. Anglo French Drug Co. (Eastern) Ltd.: (1991) 191 ITR 92(BOM) Held that: It is not necessary that the manufacturing compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... components are eligible for deduction under sec 80-IB. (vi) Assistant Commissioner of Income Tax vs. Oscar Laboratories (P) Ltd.: (2004) 88 TTJ (Chd) Held that: Assessee-company getting drugs and pharmaceuticals manufactured from another company by supplying raw material as per its own specifications and under its own control and supervision satisfied the condition regarding manufacture and production of articles and things and was entitled to deduction under sec. 80-I. 06) The decision of Hon ble Jurisdictional High court is squarely applicable to the facts of the case. Further, the scheme of the sec. 80IC is more or less similar to the scheme of sec. 80I and 80IB. It is therefore requested that the assessee may be allowed the benefit of deduction u/s. 80IC. The A.O rejected the contention of the assessee. The AO distinguished the case laws relied upon by the assessee mainly on the grounds that no manufacturing activity whatsoever was conducted by the assessee itself and complete manufacturing was done by its sister concern Vaibhav Healthcare Private Limited. The assessee held the license for manufacturing at the unit of Vaibhav Healthcare Private Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e production and is liable for penalty within the provisions of Section 271(1)(c) and the AO imposed penalty u/s 271(1)(c), vide penalty order dated 29-06-2010 passed by the AO u/s 271(1)(c) of the 1961 Act. 5. Aggrieved by the penalty levied by the AO u/s 271(1)(c) w.r.t. disallowance of its claim for deduction u/s 80IC, the assessee filed first appeal with learned CIT(A). The assessee in appellate proceedings submitted before learned CIT(A) that the assessee was setting up a new industrial undertaking at Baddi, Himachal Pradesh. The assessee submitted that the industrial undertakings set up in the said area was eligible for deduction u/s 80IC. It was submitted that while the assessee s industrial unit was not fully operational, the assessee got part of the total manufacturing activities done from the industrial undertaking of Vaibhav Healthcare Private Limited which was also situated in Baddi H.P. only. The assessee submitted that the necessary licences from Drug Controller cum Licensing Authority, Shimla, HP for manufacturing of pharmaceutical products in Baddi, HP at the unit of Vaibhav were obtained by the assessee in its name. The assessee also submitted that orders were r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill be responsible for quality of goods and its consequences will be borne by the assessee. It was submitted that Chartered Accountants M/s M G Vashi Co, Mumbai who were auditors of the company had examined this issue and based on several case laws on this subject in assessee s favour had opined that the assessee will be entitled for deduction u/s 80IC within the 1961 Act. It is only after examination of this issue, the said chartered accountants issued the audit report u/s 80IC, which copy of audit report was submitted before the AO as well before learned CIT(A). It was also submitted that another report was obtained from Mr Raman Bissa, Editor in Charge, Current Tax Reporter who also opined that assessee will be entitled for deduction u/s 80IC based on several case laws. It was submitted that the assessee filed claim for deduction u/s 80IC based on a bonafide belief that the assessee will be entitled for deduction u/s 80IC for manufacturing done at Vaibhav Healthcare Private Limited unit at Baddi, HP. It was submitted that the AO did not allow the deduction u/s 80IC as he was not agreeable to the case laws relied upon by the assessee. The assessee submitted before learned CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Bombay High Court on which the assessee relied upon to claim deduction u/s 80IC . The assessee submitted that the new undertaking of the assessee at Baddi, HP was under construction in the relevant financial year. It was submitted that Vaibhav Healthcare Private Limited was having only industrial undertaking and that too at Baddi,HP. The assessee relied on the following judgements:- a) CIT v. Reliance Petroproducts Ltd. (2010) 322 ITR 158(SC) b) CIT v. Dharmpal Premchand Ltd. (2010) 329 ITR 572 (Del) c) CIT v. Krishna Maruti Ltd. (2011) 330 ITR 547 (Del) d) CIT v. SSP Ltd. (2010) 328 ITR 643 (P H) e) ITO v. Parikh Investment Development P. Ltd. (2011) 43 SOT 537 Mumbai f) Equest India P. Ltd v. Income Tax Officer (2011) 136 TTJ (Mumbai) g) Yogesh R. Desai v CIT (2010) 38 DTR (Mumbai) (Trib) 101 h) Glorious Realty P. Ltd. v. Income Tax Officer (2009) 29 SOT 292 (i) Suren Arvindbhai v. Income Tax Officer (2011) 43 SOT 168 (Ahd) j) DCIT v. Phathankot Primary Co-operative Development Bank Ltd. (2011) 59 DTR (Asr) (Trib) 67 k) T. Ashok Pal v. Commissioner of Income Tax (2007) 292 ITR 11(SC) 6. The learned CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onafide claim before the A.O. and furnished all the details with regard to the claim and just because the appellant's claim is not found acceptable to the A.O. will not lead to furnishing inaccurate particulars of income or concealment of particulars of income. The appellant pleads that it made a bonafide claim which may be a debatable claim and that claim should not be considered as concealment of income. 7.2 I am of the view that if at all the assessee's case is covered u/s. 271(1)(c) of the IT. Act, it is through Explanation I to section 271(1)(c) of the I.T. Act. But in this case the appellant has explained that it made a bonafide claim on the basis of advice given by the auditor and all the facts relating to the claim and material to the computation of income have been disclosed by the appellant. 7.3 In the case of Yogesh R. Desai vs. ACIT (2010) 38 ITR (Mumbai)(Trib.) 101, the Hon'ble Mumbai ITAT has held as follows It is settled law that penalty under s. 271 (1)(c) is a civil liability and the Revenue is not required to prove wilfull concealment. However, each and every addition made in the assessment cannot automatically lead to levy of penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural sense); the details of a claim or the separate items of an account. Therefore, the word particulars used in the s. 271 (1)(c) would embrace the meaning of the details of the claim made. It is an admitted position in the present case that no information given in the return was found to be incorrect or inaccurate. It is not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee cannot be held guilty of furnishing inaccurate particulars. The words are plain and simple. In order to expose the assessee to the penalty unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars. Therefore, it is obvious that it must be shown that the conditions under s. 271 (1)(c) must exist before the penalty is imposed, There can be no dispute that everything would depend upon the return filed because that is the only document, where the assessee can furnish the particulars of his income - CIT vs. Atul Mohan Bindal (2009) 225 CTR (SC) 248 : (2009) 28 DTR (SC) 1 : (2009) 9 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;furnishing of inaccurate particular. The expression 'particulars' refers to 'facts, details, specifics, or information about someone or something'. Therefore, the plain meaning, of the expression 'furnishing of inaccurate particulars' implies furnishing of details information about income which are not in conformity with the facts or truth. The details or information about income deal with the factual details of income and this cannot be extended to areas which are subjective such as the status of taxability of an income, admissibility of a deduction and interpretation of law. The furnishing of inaccurate information thus relates to furnishing of factually correct details and information about income. The admission or rejection of a claim is a subjective exercise and whether a claim is accepted or rejected as nothing to do with furnishing of inaccurate particulars of income. The authorities below have apparently proceeded to treat assessee's making an incorrect claim of income as furnishing of inaccurate particulars. What is a correct claim and what is an incorrect claim is a matter of opinion. Raising a legal claim even if it is ultimately found to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29-08-2011 passed by learned CIT(A), the Revenue has come in an appeal before the tribunal. The ld. CIT-DR submitted before the tribunal that penalty u/s. 271(1)(c) of the Act was levied with respect to the disallowance of the claim of deduction u/s. 80IC to the tune of 9.99 crores filed by the assessee in the return of income filed with Revenue in pursuance to notice issued u/s 153A of the 1961 Act, wherein the A.O levied the penalty u/s. 271(1)(c) as the claim of the assessee u/s. 80IC was disallowed by the A.O in quantum assessment. It was submitted that the assessee did not filed any appeal against quantum additions made by the A.O. on account of denial of claim of deduction u/s. 80IC which was accepted by the assessee and it reached finality. It was submitted that learned CIT-A has deleted the penalty u/s. 271(1)(c) vide appellate orders dated 29-08-2011. It was submitted by learned CIT-DR that addition of ₹ 7 lacs as was made by the AO on account of income surrendered which was later upheld by learned CIT(Appeals) and the assessee has not come in appeal against the appellate order of learned CIT(A) confirming penalty on said addition of ₹ 7 lacs, but presently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed accounts for the year ended 31-03-2006 of the assessee to show that the assessee s Director and Vaibhav Directors are same. Our attention was also drawn to page 11/pb wherein it is clearly written that the assessee s business is to manufacture Pharma products on contracts basis. Our attention was also drawn to page no. 12 of the paper book wherein it is clearly stated in annual report that the new state of art manufacturing facility at Baddi,HP will start manufacturing during the financial year 2006-07. Our attention was also drawn by learned CIT DR to page no. 15 of the paper book wherein it is clearly stated that during the year under consideration the major production has been sourced from Vaibhav Healthcare Private Limited (associate/sister company). It is also stated therein that Vaibhav Healthcare Private Limited is now being merged with the assessee company with effect from 01.04.2006. It is also stated in the annual report that the assessee unit at Baddi(HP) started manufacturing in the financial year 2006-07. Our attention was also drawn to the page no. 40 of the paper book wherein unit wise profit loss account for year ended 31.03.2006 is placed wherein it is reflect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he guilt by the assessee. The learned CIT DR submitted that decision of the Hon ble Supreme Court in the case of CIT v. Reliance Petroproducts Private Limited (2010) 322 ITR 158(SC) is distinguishable as the claim filed by the assessee was ex-facie wrong and was not a bona fide claim made by the assessee. It was submitted that the advice rendered by the Chartered Accountant/Counsel that the assessee was entitled for deduction u/s 80IC was not correct and it is not a debatable issue because it was an ex-facie wrong claim made by the assessee which was not sustainable in the eyes of law. The learned CIT-DR submitted that provisions of Section 80IC are special provisions applicable to certain undertakings or enterprises in certain Special Category States and the benefit of deduction is available only on manufacture or on production while the assessee was not doing any manufacturing or production activity during the relevant previous year under consideration. The learned CIT DR submitted that learned CIT-A wrongly deleted the penalty and findings were perverse wherein learned CIT(A) erred in relying on the decision of ITAT, Mumbai in the case of Equest India Private Limited v. ITO, (20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty was rightly levied by the A.O.. The learned CIT DR also relied upon decision of ITAT, Mumbai in the case of SBI DFHI Ltd. v. ACIT reported in (2016) 71 taxmann.com 178 (Mum-trib.). The learned CIT DR also relied upon decision of Hon ble Delhi High Court in the case of CIT v. N.G Technologies Ltd. reported in (2015) 370 ITR 7(Delhi) and in this case later on Hon ble Supreme Court dismissed SLP filed by the assessee which was reported in (2016) 70 taxmann.com 37(SC). It was submitted that an opinion of CA is not relevant to get out of clutches of penalty proceedings u/s 271(1)(c). The Ld. CIT DR would also rely upon the decision of the Tribunal in the case of Mahesh. M. Gandhi v. ACIT in ITA no. 2976/Mum/2016 vide orders dated 27-02-2017 wherein one of us (Accountant Member) was member of the Division Bench passing the said judgment. The learned CIT DR also relied upon the decision of ITAT Chennai in the case of ACIT v. Harvey Heart Hospital Limited in ITA no. 1397/Mds/2012 order dated 15-11-2012. The learned CIT DR also relied upon the decision of Hon ble Supreme Court in the case of Mak Data Private Ltd. v. CIT reported in (2013) 38 taxmann.com 448(SC). The learned CIT DR also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the authorities below. It was submitted that the AO erred in holding that there is no loan license agreement entered into by the assessee. It was submitted that it was only that the assessee claim which was rejected by the AO but that will not mean that the assessee has filed a claim which was patently wrong as the manufacturing was done at the unit of the Vaibhav Healthcare Private Limited which is a sister concern of the assessee located at Baddi, Himachal Pradesh and the assessee was entitled for deduction u/s. 80IC. It was submitted that belief of the assessee while claiming deduction u/s 80IC was a bonafide belief. It was submitted that the said unit of Vaibhav was proposed to be merged with the assessee with effect from 01.01.2006 which was later changed to be with effect from 01.04.2006 and the said scheme of merger was approved by Hon ble Bombay High Court. It was submitted that no inaccurate particulars of income were furnished by the assessee while the AO may differ with the legal claim made by the assessee but that is not sufficient to fasten liability for levy of penalty u/s 271(1)(c) of the 1961 Act. The Ld. AR would rely on the appellate order passed by learned CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nit and Baddi units are separately reflected. It was submitted that depreciation has been claimed with respect to the Baddi unit only on the car as the Plant Machinery was not installed. It was submitted that Drug Controller has issued loan licence in the name of the assessee for carrying manufacturing at the premises of Vaibhav Healthcare Private Limited unit at Baddi, HP. Our attention was also drawn to the contract manufacturing agreement which is placed in paper book page no. 44 to 55 and it was submitted by drawing attention to the clauses of contract manufacturing agreement that the entire manufacturing was done under the assessee supervision and control. It was submitted that there is no requirement u/s. 80IC for ownership of plant machinery before claiming deduction u/s 80IC. Our attention was also drawn to the decision in the case of ITO v. Techdrive (India) Private Limited reported in (2010)124 ITD 249(Del-trib.). It was submitted that the department is unnecessarily putting a condition that undertaking should be owned by the assessee while requirement to get deduction u/s. 80IC is only with respect to manufacturing. Our attention was also drawn to provisions of Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s case machinery was received after the end of the previous year and a wrong claim was filed by the tax-payer which was factually incorrect. It is also submitted that in the case of CRN Investments Private Limited(supra) bogus claim was filed by the taxpayer and in the revised return, the taxpayer withdrew the claim. It was submitted that in the case of ACIT v. Khanna Annadhanam(supra), It was submitted that receipt received by the taxpayer was a revenue receipt and there was no doubt about its chargeability to tax while the taxpayer claimed the same to be capital receipt without any basis whatsoever. The learned counsel also distinguished the case of Chadha Sugars Private Limited(supra) relied upon by the learned CIT DR by submitting that claim of expenses towards ROC fee for increase in authorised capital was held by Hon ble Supreme Court in the case of Brooke Bond India Limited v. CIT (1997) 225 ITR 798(SC) and also in PSIIDC v. CIT reported in (1997) 225 ITR 792(SC) to be capital expenditure while the same was claimed by the taxpayer in this case to be revenue expenditure based on CA opinion and it was submitted that this was a claim which was ex-facie wrong in view of afores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). The assessee company is the main concern of the Ankur group and is engaged in the manufacturing of pharmaceutical products. During the previous year relevant to the impugned assessment year, the assessee had one industrial unit at Daman for manufacturing of pharmaceutical products which was operational while the other industrial unit was being set up by the assessee at Baddi, HP for manufacturing of pharmaceutical products. The assessee originally filed return of income with Revenue u/s. 139(1) on 27.11.2006 declaring total income of ₹ 3,81,37,586/-. Pursuant to search u/s 132(1), notices u/s. 153A dated 08.10.2007 were issued by the AO and served on the assessee. The assessee in response thereof to the notice u/s 153A filed return of income on 19.06.2009 declaring total income of ₹ 3,81,78,610/-. The assessee was outsourcing manufacturing of pharmaceutical products to its sister/ associated concern Vaibhav Healthcare Private Limited by availing capacity utilisation of Vaibhav s industrial unit situated at Baddi, HP for manufacturing of pharmaceutical products. The assessee availed deduction to the tune of ₹ 9,99,96,772/- u/s. 80IC of the 1961 Act for manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , purchased raw material and packing material, recruited and deputed staff for supervision and control of production at Vaibhav s unit and also effected the sales w.r.t. manufacturing done at Vaibhav s unit at Baddi, HP. The sales were carried out by the assessee for which delivery outward instructions were issued from time to time by assessee to Vaibhav.The Drug controller cum licensing authority, Simla, HP has granted drug license on loan license basis in favour of the assessee to manufacture Pharma products at Vaibhav unit at Baddi, HP which was valid from 28-04-2005 to 27-04-2010. The copies of said loan licenses held by the assessee in its own name to manufacture pharma products at Vaibhav s Baddi unit are placed in paper book filed by the assessee with tribunal. The said Vaibhav has only one unit at Baddi, HP and the said unit was eligible for deduction u/s 80IC which is evident from the assessment framed by Revenue u/s 143(3) for AY 2007-08. The assessment order passed by Revenue u/s 143(3) for AY 2007-08 in the case of Vaibhav is placed on record wherein deduction u/s 80IC was allowed by Revenue to Vaibhav, while for the AY 2006-07 in view of losses no deduction u/s 80IC we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hal Pradesh being an area notified as exempt from excise duty, there were no return filed with the excise department as there was exemption from excise duty. In our considered view keeping in view entire factual matrix of the case, we are of the considered view that assessee has given a bona-fide explanation as to the filing of the claim for deduction u/s. 80IC by the assessee w.r.t. manufacturing done by the assessee at the unit of sister concern Vaibhav at Baddi, HP under contract manufacturing agreement wherein raw materials and packing material was supplied by the assessee. The said belief for being entitled for deduction u/s 80IC w.r.t. manufacturing done by the assessee at Vaibhav s unit at Baddi, HP under assessee s supervision and control on the strength of several case laws cited by the assessee which are detailed in preceding para s of this order as well audit report issued by the auditors wherein the auditors certified that the assessee will be entitled for deduction u/s 80IC w.r.t. manufacturing done by assessee at vaibhav s unit at Baddi, HP under its supervision and control. However, allowability of the said claim u/s 80IC ultimately did not found favour with the Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances, we are directing deletion of the penalty levied by the Revenue u/s. 271(1)(c) and we uphold/confirm the well reasoned order of the learned CIT-A deleting penalty levied by the AO u/s 271(1)(c), in which we do not find any infirmity. The learned CIT DR has relied upon the decision of Hon ble Supreme Court in the case of Mak Data Private Limited(supra) but in our considered view, this decision is of no help to Revenue as in this case there was surrender of income during the assessment proceedings while the return of income was filed even after 10 months of the survey and the tax-payer never had the intention to declare the income in the return of income filed by it, on that basis the Hon ble Supreme Court held that penalty is exigible u/s 271(1)(c). The learned CIT DR also relied upon the decision of Hon ble Delhi High Court in the case of CIT v. HCIL Kalindee ARSSPL(supra) but the facts in the said case are different as the tax-payer never executed the work awarded to it by Rail Vikas Nigam Limited and M/s Rites Limited but sub-contracted the work to M/s HCIL which infringed explanation to section 80IA(13) which clearly stipulates that the tax-payers engaged in the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ather a legal claim was filed which did not found favour with Revenue. Again in the case of Sree Valliappa Textiles(supra) an ex-facie wrong claim for depreciation was lodged as no machinery was even dispatched by the sellers till the closure of the previous year and false certificate from factory manager was furnished and under those circumstances, it was held that penalty is exigible. Similarly, reliance of learned CIT DR on the case of Kuttookaran Machine Tools(supra) is of no help as again in this case ex-facie wrong/bogus claim of investment allowance and depreciation was filed w.r.t. machineries which were never purchased, installed or commissioned during the previous year and it was held that penalty is exigible u/s 271(1)(c) of the 1961 Act under those circumstances. The learned CIT DR also relied upon decision of Hon ble Delhi High Court in the case of Kanchenjunga Advertising Private Limited (supra) wherein the tax-payer did not made complete disclosure of the facts and omission to bring vital facts to the notice of the Revenue made the particulars filed in support of the claim inaccurate liable to the leviability of penalty u/s 271(1)(c) while in the instant case, comple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee and finished products were sold under order of the assessee. The case of Mahesh M Gandhi(supra) decided by ITAT, Mumbai as relied upon by the learned CIT DR is also distinguishable as in this case the tax-payer omitted to disclose income chargeable to tax in the return of income filed with the Revenue and no taxes were paid. It was only when cornered and confronted by Revenue, the tax-payer came forward and paid taxes. Similarly in the case of N G Technologies Limited(supra) relied upon by learned CIT DR is a case where the tax-payer claimed capital loss on sale of fixed assets in the Profit and Loss account and the same was claimed as deduction from the income wherein the Hon ble Delhi High Court held that capital loss on sale of fixed assets is not allowable as revenue expenses even going by the basic tenets of accountancy and it was an ex-facie wrong claim which made the tax-payer liable for penalty u/s 271(1)(c). Thus, keeping in view our aforesaid detailed discussions as above, we hold that Revenue fails in this appeal and the appeal filed by the Revenue stood dismissed. We order accordingly. 12. In the result appeal of the Revenue in I.T.A. No. 7529/Mum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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