TMI Blog2013 (12) TMI 713X X X X Extracts X X X X X X X X Extracts X X X X ..... belief that it will continue to carry on the business of amalgamating company - The addition was debatable as is apparent from the order of Ld. CIT (A) in respect of quantum additions wherein he had reduced the disallowance from Rs. 3 lacs to Rs. 2.50 lacs - Decided against Revenue. - ITA No.4788/DEL/ 2011 - - - Dated:- 8-11-2013 - Raj Pal Yadav And T S Kapoor, JJ. For the Appellant : Shri Hiren Mehta, CA, For the Respondent : Smt. Nidhi Srivastava, Sr. DR ORDER:- PER : T S Kapoor This is an appeal filed by the Revenue against the order of the Commissioner of Income Tax (Appeals)-XII New Delhi dated 31.05.2011 for the assessment year 1999-2000. The grounds taken by the Revenue are as under: 1. The Ld. CIT (A) erred in law and on the facts and circumstances of the case in canceling the penalty of Rs.29,99,293/- imposed by the Assessing Officer u/s 271(1) (c). 2. The appellant craves, to amend modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal. 2. The brief facts of the case are that assessment in this case was completed vide order dated 28.03.2002. The assessment was completed after making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeal is allowed. Under valuation of closing WIP of Rs. 1,92,885/-. 16. I have considered the penalty order and the submissions of the appellant and also the above relied order of the ITAT. The findings of ITAT on this issue are that the addition enhancing the value of closing WIP has been made on estimate basis. Neither any quantity was found in excess nor was any rate difference on the basis of which addition has been made to work in progress. The WIP indicates the value added in the raw material by way of any process undertaken by the assessee. It is just estimation of further expenditure put by the assessee after procurement of raw material before converting the same into finished product. Any addition made by having a difference estimation being upheld in quantum proceedings would not attract levy of penalty. Consequent upon the same, the issue relating to imposing of penalty stands in favour of the assessee. 17. Respectfully, following the order of ITAT referred above, on this issue, it is held that levy of penalty with respect to under valuation of closing WIP is covered by the decision of ITAT and hence penalty is required to be deleted. This ground of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid in pursuance of order of the Commissioner of Central Excise Rs.2,50,000/-. I have considered the penalty order and the submissions of the appellant on this issue. The question regarding allowability of expenditure towards excise duty demands deposited under the Kar Vivad Samadhan Scheme is a debatable issue. This is substantiated by the fact that the quantum of disallowance was reduced by the CIT (A) from Rs.3 lacs to Rs.2.50 lacs in appeal. This action has been further upheld by the ITAT. It is a well accepted proposition that mere sustenance of addition in quantum proceedings cannot ipso facto lead to levy of penalty for concealment. The Assessing Officer apart from relying upon the quantum proceedings has not brought on record any material to show that there was a willful attempt on the part of the appellant to reduce its tax liability. It is rather a case of debatable issue where more than one view is possible on the allowability of expenditure. The ratio laid down by the Apex Court in the case CIT vs. Reliance Petro Products Ltd. (supra) would therefore be applicable in this case. Hence the penalty levied on account of disallowance of expenditure of Rs.2.50 lacs is h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the facts and circumstances of the present case remain same, the penalty imposed on account of these two additions were covered in favour of the assessee. 8. Regarding penalty imposed on account of brought forward losses of Mandakini Acqua Mineral Pvt. Ltd., it was argued that the said company was merged with the assessee company w.e.f. 1st April, 1998 and as per provisions of Section 72A the brought forward losses to the extent of Rs.68,85,252/- were set off against the assessee s income for A. Y. 1999- 2000. It was further submitted that however the business of manufacture and sale of mineral water as done by amalgamating company was discontinued w.e.f. 30.06.2001 and, therefore, the conditions for carrying and setting off loss u/s 72A were violated however since the return was already filed and the date of filing revised return had also expired therefore, there was no option left with the assessee for revising the same but when Assessing Officer enquired about this carried forward loss the same was immediately surrendered. However there was no filing of inaccurate particulars as complete particulars were filed at the time of filing of return. The assessee was under bonafid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e the penalty for concealment of income cannot be made where there is difference in calculation of an exemption as claimed by assessee and as allowed by Assessing Officer due to difference in opinion in respect of various heads of expenses and income relating to export or non export income. Therefore relying upon earlier years Tribunal s order in the case of assessee itself, in respect of these two additions, the penalty is not imposable. 11. As regards depreciation on film city, we find that assessee had claimed depreciation @ 25% on studio building on the basis of decision of M. P. High Court in the case of A. V. Mevyyappa Chettiar. Up to the date of filing of return that is on 31.12.1999 the decision of the case remained in favour of assessee. However, the Hon ble Supreme Court reversed the decision vide it s order dated 12.05.2000 therefore, at the time of filing of return of income, the assessee was under bonafide belief that it was eligible for depreciation @ 25% and hence there was no furnishing of inaccurate particulars. Similarly penalty imposed on account of disallowance of carry forward loss of amalgamating company was not justified as at the time of filing of retur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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