9911796707
TMI Blog2012 (7) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of the company as under: "1. The ld.CIT(A) has erred in law and on facts in deleting the penalty of Rs.69,13,790/- levied u/s.271(1)(c) of the Act." 3. In the case of the company, M/s.Gujarat Ambuja Exports Ltd., for A.Y.2003-2004, the return of income was filed by the assessee declaring the total income of Rs.NIL and in the assessment order, the income of the assessee was assessed at Rs.NIL but the book profit under Section 115JB of the IT Act was assessed at Rs.4,71,16,061/-. For doing so, the AO has disallowed deduction of Rs.8,57,760/- claimed by the assessee under section 35D and reduced the claim under Section 10B to Rs.7,25,68,800/- as against the claim of Rs.7,91,17,830/- and no deduction was allowed by the AO under Section 80HHC against claim of Rs.1,63,10,271/-. Although the income of the assessee was assessed at Rs.NIL, after allowing set off of brought forward unabsorbed depreciation of earlier year, but it has resulted into carry forward of lesser amount of such brought forward unabsorbed depreciation. The AO initiated penalty proceedings under Section 271(1)(c) and imposed penalty of Rs.69,13,790/-. Against the penalty, the assessee went in appeal before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Freight & Carriers P. Ltd. Against these additions, the assessee went in appeal before the learned CIT(A) who deleted the disallowances made by the AO. But on further appeal by the Revenue, the Tribunal reversed the order of the learned CIT(A) on all three issues and confirmed the assessment order on these issues. In the meanwhile, the AO initiated the penalty proceedings and imposed penalty of Rs.63,09,750/-. Against the penalty order also, the assessee carried the matter in appeal before the CIT(A) and he deleted the penalty as per the impugned order and now the Revenue is in appeal before us. 6. Similar is the case for the assessment year 1997-98 in the case of the same assessee wherein the return of income was filed by the assessee declaring total loss of Rs.48,61,877/-, but the assessment was completed by the AO on 8-3-2000 assessing the income of the assessee at a net loss of Rs.11,91,128/-. For doing so, the AO had made the disallowance of interest claim of Rs.36,70,749/- on similar basis as in A.Y.1995-96. Against this disallowance of interest, the assessee carried the matter in appeal before the CIT(A) and in this year also, the CIT(A) deleted the disallowance. But on fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was deleted by the Tribunal and hence by following the decision of the Co-ordinate Bench of the Tribunal, the penalty should be deleted in the present cases also because in the present case also, the facts are similar and by following the Tribunal order in quantum proceedings, in the case of Pramukh Oxygen Pvt. Ltd., the disallowance was confirmed by the Tribunal in quantum proceedings of the present cases. It was further submitted that even otherwise, also no penalty is justified because in the quantum proceedings, as the assessee has preferred appeal in the High Court against the order of the Tribunal and the High Court has admitted the appeal and is pending for final hearing, as per the High Court's order available on record at page nos.125 to 126 of the PB. He placed reliance on the decisions of the Tribunal rendered in the case of Rupam Mercantile Ltd. Vs. DCIT, 91 ITD 237 (TM), Ahmedabad in support of his contention that once the tax appeal is admitted on the ground of substantial question of law, no penalty can be levied. It was further submitted that as per the decision of the Hon'ble Apex Court in the case of Reliance Petroproducts P.Ltd., 322 ITR 158, where the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 271(1)(c) and the same was deleted by the learned CIT(A) in that case also against which, the Revenue was in appeal before the Tribunal. In that case also, the Tribunal confirmed the order of the learned CIT(A) regarding the deletion of penalty. In that case also, penalty was deleted by the Tribunal on the basis that the CIT(A) has observed that the primary facts have been disclosed by assessee and the controversy has arisen because of the difference of opinion drawn on similar set of facts. It is also noted by the Tribunal in that case that the difference of opinion was also referred to the High Court and in these circumstances, the CIT(A) was justified in holding that it is not a fit case for imposition for penalty for concealment. In the present cases also, finding is given by the learned CIT(A) that in the present cases, at the most, it is the case where the explanation offered by the assessee is not accepted by the Revenue authority, but the same had not been found to be false by any of the authorities. He has also given a finding that it is a case where the assessee has given the explanation which is disbelieved by the revenue authority but the explanation so given was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly, on a consideration of the facts on records, the contentions made and the decisions cited, I hold that it is not a fit case for levy of penalty as no penalty proceeding is initiated by the CIT(A)-VIII, Ahmedabad, on enhanced book profit, therefore, the penalty levied u/s. 271(1)(c) on account of enhancement of book profit is directed to be cancelled. 8.1 In connection to the disallowance u/s. 35D, reduction in exemption u/s. 10B and rejection of claim u/s. 80HHC, in the facts of the present case, complete disclosure as to the claim of deduction under section 35D, 10B and 80HHC of the act were made and therefore, no case is made out in so far as concealment or furnishing of inaccurate particulars are concerned. In order to levy penalty under section 271(1)(c) under such circumstances, one has to look at explanation 1 to the said section. Under the scheme of the Act, the said explanation 1 gets attracted only when an assessee fails to substantiate its claim of expenditure or the explanation given by the assessee is found to be false. However, when the explanation given by the assessee is simply not accepted by the revenue, the same cannot be made a ground for levying the penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enhancement of book profit by the learned CIT(A). In addition to this, there is an addition of Rs.178.84 lakhs in normal income also and this addition is on account of disallowance under Section 35D, reduction in exemption under Section 10B and rejection of claim under Section 80HHC. Regarding these three additions, penalty has been deleted by the learned CIT(A) on the basis that the Explanation-1 to Section 271(1)(c) gets attracted only when the assessee failed to substantiate its claim to explain or the explanation given by the assessee were found to be false. But when the explanation given by the assessee is simply not accepted by the Revenue, the same cannot be made a ground for levy of penalty. He has further held that in the present case, at the most, it is a case where the explanation offered by the assessee is not accepted but the same has not been found to be false by any of the authorities. He has deleted the penalty with regard to these three disallowance on this basis and same could not be controverted by the learned DR of the Revenue and therefore, in the present case, we do not find any justification to interfere with the order of the learned CIT(A) regarding deletion ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
