TMI Blog2013 (10) TMI 1068X X X X Extracts X X X X X X X X Extracts X X X X ..... alment of income would have no role to play and would not lead to tax evasion therefore, penalty cannot be imposed on the basis of the disallowance or additions made under regular provision - Following decision of CIT vs Nalwa Sons Investment Limited [2010 (8) TMI 40 - DELHI HIGH COURT] - Decided against Revenue. - ITA No.1464/Kol/2011 - - - Dated:- 11-6-2013 - Sri N. S. Saini AM And Sri Mahavir Singh, JM,JJ. For the Appellant : Shri Kanhiya Lal Kanak, JCIT, Sr. DR For the Respondent : Shri Manish Tiwari ORDER Per Shri N. S. Saini, AM. This is an appeal filed by the Revenue against the order of ld. CIT(A)-I, Kolkata dated 08.07.2011. 2. The appeal filed by the Revenue is barred by limitation of 14 days. The Revenue has filed a condonation petition and we find that the reason given for delay in filing the appeal is a plausible one and hence we condone the delay in filing the appeal by the Revenue and admit the appeal of the Revenue for hearing. 2. The sole issue involved in this appeal is that the ld. CIT(A) erred in cancelling the penalty of Rs.85,50,751/- imposed u/s 271(1)(c) of the I.T.Act. 3. The brief facts of the case are that the assessment was ori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Export incentive of Rs.193,79,010/- and F.D. interest of Rs.39,88,487/- since such receipts cannot be equated as profits and gains from industrial undertaking. The reassessment made u/s 147/144 of the Act dated 31.12.2009 resulted as under :- Gross Income Rs.638,69,857/- Deduction u/s 80IB(5) Rs.4,05,02,360/- Total Income Rs.2,33,67,497/- Book Profit u/s 115 JB Rs.9,50,88,243/- 5. It appears form the findings recorded at page 5 of reassessment order u/s 147/144 dated 31.12.2009 that A.O. initiated penalty proceeding u/s 271(1)(c) for recasting claim u/s 80IB(5) at Rs.4,05,02,360/- as against such claimed allowed earlier at Rs.6,38,69,857/-. 6. The factual position does not suggest any concealment of income or furnishing inaccurate particulars thereof for which penalty has been imposed. The word concealment according to English dictionary means 'to hide' or 'keep away form observation'. The offence of concealment which is a direct charge to hide an item of income or a portion thereof is not applicable to the facts of the case. We have earlier stated that Ld.A.O. in restricting the assessee's claim for deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by itself, will not amount go furnishing inaccurate particulars regarding the income of the assessee. 10. On the other hand it may safely be concluded that assessee's claim for deduction u/s 80IB on Export incentive and interest on FD involves an arguable controversial and/or debatable point of law. We may add that any claim which involves arguable or debatable point cannot be considered as a false one otherwise it would become impossible for any assessee to raise any claim or deduction which might be debatable. It is not the intention of legislature to make punishable such claim if it is not accepted ultimately. The above view gets support from the decision in CIT -vs- Harshvardhan Chemical Minerals Ltd [2003] 259 ITR 212 (Raj). 11. We also invite your attention to the judgment in Mimosa Investment Co.(P)Ltd. vs ITO [2009] 28 SOT 470 (Mum). In this case it was held that merely because A.O. while discharging his duty in recalculating total income in accordance with law which is not the same as calculated by the assessee, it cannot be held that the assessee has concealed particulars of his income or has furnished inaccurate particulars of such income or there is deemed concea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ackground that the assessee filed its return showing total income under normal computation at nil because of deduction u/s 80IB(5). However, the appellant paid tax on the basis of book profit u/s 115JB. The provisions of Section 115JB clearly says that where total income as computed under the Act is less, the book profit shall be deemed to be the total income of the assessee. Even in the order u/s 144/147 in which penalty proceeding was initiated, tax is payable u/s 115JB at the same amount as returned by the Company and assessed earlier. In view of the above, the penalty order u/s 271(1)(c) is liable to be cancelled". The A.O. has levied the penalty on the ground of furnishing inaccurate particulars of income. It has been stated by the A.O. that : "In the instant case, assessee has claimed deduction u/s 80IB on DEPB benefits received during the previous year knowing fully well that such DEPB benefits do not form part of the eligible profit for the purpose of section 80IB. The assessee has failed to bring any materials on records and or to show that such a wrong and improper claim of deduction was made in the return under certain bonafide belief. The assessee has not also bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... returned by the company and assessed earlier. The Hon'ble Supreme Court in the case of CIT, Ahmedabad vs Reliance Petroproducts Pvt. Ltd. vide its judgment dated 17.03.2010 held that the argument of the revenue that "submitting an incorrect claim for expenditure would amount to giving inaccurate particulars of such income" is not correct. By no stretch of imagination can the making of an incorrect claim in law tantamount to furnishing inaccurate particulars. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. In view or the foregoing discussions, it is evident that the CIT(A) has granted relief to the appellant for A.Y.004-05 which has been reversed by the ITAT on the basis of the judgment of the Apex Court in the case of Liberty India v CIT (317 ITR 218) delivered on 31.08.2009. In this case, the appellant claimed that the return was filed way back in the year 2005 and the CIT(A) has granted the relief to the appellant for A.Y.2004-05, thus the ground of furnishing inaccurate particulars by the appellant is not correct and valid. Further, the appellant paid tax on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.1,93,79,010/- and interest on Fixed Deposit of Rs.39,88,487/- the assessee was assessed to tax u/s 115JB of the Act on the basis of the same book profit as assessed in the original assessment. We find that the Hon'ble Delhi High Court in the case of CIT vs Nalwa Sons Investment Limited (2010) 327 ITR 543 (Del) has held that where the income computed in accordance with the normal procedure is less than the income determined by local fiction, namely, the book profits u/s 115JB of the Act and the income of the assessee is assessed u/s 115JB of the Act and not under the normal provision, the tax is paid on the income assessed u/s 115JB of the Act. Concealment of income would have no role to play and would not lead to tax evasion therefore, penalty cannot be imposed on the basis of the disallowance or additions made under regular provision. The SLP filed by the department against the said order of the Hon'ble Delhi High Court CIT vs. Nalwa Sons Investment Ltd. being appeal (Civil) (S) 18564/2011 was dismissed by the Hon'ble Supreme Court on 04.05.2012. The facts being identical in the present case of the assessee, we find that the decision of the ld.CIT(A) is supported by the above de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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