TMI Blog2014 (1) TMI 893X X X X Extracts X X X X X X X X Extracts X X X X ..... upheld – Decided against Revenue. Penalty u/s 271(1)(c) of the Act - Addition made on liquidated damages – Held that:- The CIT(A) should have deleted the penalty based on the same reasons given for deleting the penalty in the case of disallowance u/s 40(a)(ia) and u/s 14A - All the facts and figures regarding the claim were before the Revenue authorities and it is not a case of bogus claim - The claim of the assessee that it is inadvertent computation mistake through oversight appears to be a bonafide explanation - the facts do not suggest that this is not an inadvertent mistake as explained by the assessee - any excess or short provision would be reversed in the subsequent year - The decision in CIT vs. Reliance Petro Products P. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard Mr.Sanjay Pandey, the Ld.Sr.D.R. on behalf of the Revenue and Shri Kapil Goel, the Ld.Counsel on behalf of the assessee. 6. On a careful consideration of the facts and circumstances of the case and on a perusal of the papers on record as well as the orders of the authorities below and case laws cited, we hold as follows. 7. We first take up the Revenue s appeal. The Ld.CIT(A) at page 16, para 18(ii) observed as follows. (ii) Disallowance u/s 40(a)(ia) and u/s 14A of the Act: Both these disallowances made by the A.O. are legal disallowances. No inaccurate particulars were filed as far as the claim of deductions is concerned. There was no concealment of any facts with regard to the claim of the deductions. Complete details were f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e no.250/1992, wherein the decision of Hon ble Supreme Court in the case of CIT vs. Reliance Petro Products P. Ltd., 322 ITR 158 and the decision of Price Water House Coopers P.Ltd. vs. CIT, Kolkata (2012) 348 ITR 306 were followed. He also relied on certain other case laws. 9. We have gone through these decisions. The a.O. has in the last page of his order u/s 271(1)(c ) levied the penalty on the assessee on the ground that assessee has willfully furnished inaccurate particulars of income. The Ld.Commissioner of Income Tax (Appeals) held that the assessee has furnished all the required details and that hence no penalty can be levied on technical/legal disallowances u/s 14A or u/s 40(a)(ia). We on the facts of this case agree with ;thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant was fully aware of the contents of the agreement entered into by him with the buyer, according to which the appellant had to supply a minimum of 285000 MT of iron ore to the buyer. However, while calculating the liquidated damages, the appellant took the minimum quantity to be supplied to the buyer at 3,00,000 MT. The appellant thus claimed excess deduction of liquidated damages with respect to 15000 MT of the commodity. The explanation filed by the appellant with regard to this claim that due to moisture there is always a difference in the quantity shipped by the appellant and the quantity received by the buyer, has not been found to be true. The issue involved rather the issue involved is short supply of the quantity of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim is marginal i.e. 8.5%. This is an error in quantification. The claim of the assessee that it is inadvertent computation mistake through oversight appears to be a bonafide explanation. In our view the facts do not suggest that this is not an inadvertent mistake as explained by the assessee. As this is only a provision, any excess or short provision would be reversed in the subsequent year. The propositions laid down by the Hon ble Supreme Court in the case of CIT vs. Reliance Petro Products P. Ltd., 322 ITR 158 (supra) and in the case of Price Water House Coopers Ltd. (supra) are as under. i) CIT vs. Reliance Petro Products P.Ltd. (2010) 322 ITR 158 (SC) Where there is no finding that any details supplied by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articulars of income. On appeal by the assessee to the Supreme Court, HRLD reversing all the lower authorities. Notwithstanding the fact that the assessee is undoubtedly a reputed firm and has great expertise available with it, it is possible that even the assessee could make a silly mistake. The fact that the Tax Audit Report was filed along with the return and that it unequivocally stated that the provision for payment was not allowable u/s 40A(7) indicates that the assessee made a computation error in its return of income. Apart from the assessee, even the Assessing Officer who framed the original assessment order made a mistake in overlooking the contents of the tax audit report. The contents of the tax audit report suggest that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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