TMI Blog2011 (5) TMI 851X X X X Extracts X X X X X X X X Extracts X X X X ..... d with the return of income. In our considered opinion, the stand taken by the assessee at the time of filing of return of income was a possible and plausible view and therefore, the penalty is not justified. The judgment of the hon'ble apex court rendered in the case of COMMISSIONER OF INCOME-TAX VERSUS RELIANCE PETROPRODUCTS PVT. LTD. [ 2010 (3) TMI 80 - SUPREME COURT] , held that mere making of a claim by itself will not amount to furnishing of inaccurate particulars regarding the income of the assessee and such a claim made in the return of income cannot amount to concealment of income or furnishing of inaccurate particulars of income unless it is found that any details supplied by the assessee in this return were found to be incorrect or erroneous or false. In our considered opinion, this judgment of the hon'ble apex court supports the case of the assessee in the present case and respectfully following this judgment, we delete the penalty - Decision in favour of Assessee - ITA No. 2698 /Del/2010 - - - Dated:- 27-5-2011 - Order The order of the Bench was delivered by A. K. Garodia (Accountant Member).-This appeal by the assessee is directed against the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being the amount of deduction claimed in respect of provision for doubtful debts, debited in the books of account. (3.1) That the Commissioner of Income-tax (Appeals) erred on facts and in law in upholding the action of the Assessing Officer in not appreciating that (i) the impugned claim was made on the basis of legal position/judicial precedents prevalent at the time of filing of return of income ; (ii) no inaccurate particulars of income or incorrect facts in respect thereof were furnished by the appellant ; (iii) the impugned issued was debatable on which two views were possible ; (iv) the explanation offered by the appellant was bona fide ; and (v) all facts material to the claim were fully disclosed. (3.2) That the Commissioner of Income-tax (Appeals) erred on facts and in law in alleging that the penalty under section 271(1)(c) was rightly imposed on disallowance of provision for doubtful debts since the same was accepted by the appellant and was not challenged in further appeal before the Income-tax Appellate Tribunal. (3.3) That the Commissioner of Income-tax (Appeals) erred on facts and in law in not appreciating that the disallowance on account of provision for dou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 36(1)(vii) of the Income-tax Act. It is submitted that this Explanation was inserted by the Finance Act 2001 with retrospective effect from April 1, 1989. It is submitted that since the return of income was filed by the assessee on November 30, 1998, at the time of filing of return of income, the claim of the assessee was justified and hence, for further disallowance as per the amended provisions of the Act, penalty is not justified. The learned Departmental representative supported the orders of authorities below on this aspect of the matter. Regarding the penalty imposed by the Assessing Officer on account of disallowance under section 43B, it is submitted by learned counsel for the assessee that allowability of such claim was a debatable issue and full facts were disclosed by the assessee in its return of income filed by the assessee. Our attention was drawn to the computation of income as available on pages 45-46A of the paper book. It is pointed out that on page 45, it has been stated that deduction is claimed to the extent of Rs. 1666.52 lakhs under section 43B in respect of payments made during the year but not debited to the profit and loss account and the details and b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the hon'ble High Court of Delhi. Reliance was also placed on the Tribunal decision rendered in the case of Honda Siel Power Products Ltd. v. Deputy CIT [2001] 77 ITD 123 (Delhi) and it is submitted that in that case, the Tribunal has followed the earlier Tribunal decision rendered in the case of Modipon Ltd. [1995] 52 TTJ (Delhi) 477. It is also submitted that in the case of Honda Siel Power Products, issue was similar, i.e., regarding allowability of deduction claimed by the assessee under section 43B in respect of amount appearing in the balance-sheet under the head "Loans and advances" with the caption "balance with customers/excise Department" which consists of balance in the profit and loss account of Rs. 10,109, RG-23A Part II Rs. 63,05,495 and RG23C Part II Rs. 15,64,516. It is submitted that the Tribunal has followed the earlier Tribunal decision rendered in the case of Modipon Ltd. and decided this issue in favour of the assessee. Our attention was drawn to paragraph 11 of this Tribunal decision where it is observed by the Tribunal that the facts in the case of Honda Siel Power Products Ltd. [2001] 77 ITD 123 (Delhi) are identical and the ratio of the decision in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the case of Modipon Ltd. [1995] 52 TTJ (Delhi) 477 was placed in the note for deduction on account of the profit and loss account balance and for Modvat credit balance, reliance was placed on the order of the learned Commissioner of Income-tax (Appeals) in the case of Maruti Udyog Ltd. He also submitted a copy of this order of the learned Commissioner of Income-tax (Appeals). It is also submitted by him that the Tribunal decision in the case of Honda Siel Power Products Ltd. [2001] 77 ITD 123 (Delhi) was delivered by the Tribunal on March 24, 2000, i.e., after filing the return of income by the assessee and hence, benefit of this Tribunal decision was not available at that point of time, i.e., filing of return of income by the assessee. It is also submitted that it was held by the Special Bench of the Tribunal in the case of Deputy CIT v. Glaxo Smithkline Consumer Healthcare Ltd. [2008] 299 ITR (AT) 1 (Chandigarh) that Modvat credit available to an assessee is in the nature of a future entitlement, which cannot be considered equivalent to actual payment of excise duty and hence deduction is not allowable under section 43B in respect of unexpired Modvat credit available to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... copy of computation submitted by the assessee, deduction under section 43B was claimed in respect of 3 amounts ; one amount of Rs. 23,74,628 is as per the profit and loss account and deduction for the same was allowed by the Commissioner of Income-tax (Appeals) and no penalty has been imposed on that account. In the note given by the assessee, the assessee has cited the Tribunal decision rendered in the case of Modipon Ltd. [1995] 52 TTJ (Delhi) 477 for claiming this deduction in respect of the profit and loss account balance but for the remaining two amounts for which deduction has been claimed by the assessee in respect of Modvat credit on components and Modvat credit for CVD, this Tribunal decision was not referred and it is stated by the assessee in the note as given in the computation that deduction is claimed as per the order of the Commissioner of Income-tax (Appeals)-XV, in the case of Maruti Udyog Ltd. for the assessment year 1994-95. This shows that the assessee was also very much aware about the factual difference in these two amounts and this argument of the assessee does not hold good that all these three amounts are same and have been considered as same by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, at the time of filing of return of income by the assessee, there was no debate going on. But still, it has to be accepted that the view taken by the assessee on the basis of an order of the learned Commissioner of Income-tax (Appeals) rendered in the case of Maruti Udyog Ltd. was not an impossible view although the same was not approved by the Special Bench of the Tribunal in the case of Glaxo Smithkline Consumer Healthcare Ltd. [2008] 299 ITR (AT) 1 (Chandigarh) but before that, it was approved by a Division Bench of the Tribunal as per decision rendered in the case of Honda Siel Power Products Ltd. [2001] 77 ITD 123 (Delhi). Under this factual position, we feel that penalty is not justified. Moreover, even after the decision of the Tribunal against the assessee in the assessee's own case in quantum proceedings, the assessee has filed appeal before hon'ble Delhi High Court and this appeal of the assessee had been admitted by the hon'ble Delhi High Court as has been contended by learned counsel for the assessee and this fact also indicates that the view taken by the assessee is not an impossible view although not accepted by the Tribunal in the assessee's own case in quantum p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impossible view although not accepted by the Tribunal in the assessee's own case in quantum proceedings or by the Special Bench of the Tribunal in the case of Glaxo Smithkline Consumer Healthcare Ltd. [2008] 299 ITR (AT) 1 (Chandigarh). Hence, this judgment of the hon'ble Delhi High Court is also of no help to the Revenue in the present case. Similarly the judgment of the hon'ble Delhi High Court rendered in the case of Escorts Finance Ltd. [2010] 328 ITR 44 (Delhi) is also of no help to the Revenue in the present case because the facts are different. In that case, in paragraph 15, it is observed by the hon'ble Delhi High Court that the claim made by the assessee for deduction under section 35D was not a wrong claim but it is clear case of a false claim. In the present case, it is nobody's case that the claim of the assessee is a false claim. Hence, this judgment is not applicable. Now we consider the applicability of the judgment of the hon'ble Delhi High Court rendered in the case of CIT v. Gurbachan Ltd. [2001] 250 ITR 157 (Delhi). In that case the facts are that the assessee filed a return of income showing an income of Rs. 5,000. A sum of Rs. 48,500 was recovered in cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2008] 299 ITR (AT) 1 (Chandigarh) and the Special Bench of the Tribunal decided this issue against the assessee. Considering these facts, we are satisfied that the explanation of the assessee is bona fide and hence Explanation 1 to section 271(1)(c) is not attracted and therefore, this decision of the hon'ble Delhi High Court is also of no help to the Revenue in the present case. Now, we consider the applicability of another judgment cited by the learned Departmental representative of the Revenue, i.e., the judgment of the hon'ble Kerala High Court rendered in the case of CIT v. Kishorekumar Shamji [2000] 244 ITR 702 (Ker). The facts of that case are that the assessee has filed a return of income showing an income of Rs. 86,740 and the returned income was accepted. Subsequently, a search was conducted in the premises of the assessee and one of the documents seized was a bill regarding purchase of 500 qtls. of papers. It was found that in the bill, the rate originally recorded was Rs. 1,975 per qtl. But the same was corrected at Rs. 2,975 per qtl. and by this correction, there was increase in price of Rs. 5 lakhs. After the search, the assessee filed a letter before the Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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