TMI Blog2014 (11) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... ance Act 2009 - the CIT(A) was right in cancelling and deleting the penalty as the provisions retrospective inserted by Finance Act 2009 was not before the assessee at the time of filing of return on 29.11.2006 - the CIT(A) was right in cancelling the penalty – Decided against revenue. - ITA No. 1972/Del/2012 - - - Dated:- 22-8-2014 - SHRI G.D. AGRAWAL, AND SHRI CHANDRA MOHAN GARG, JJ. For The Appellant by: Shri R.S. Singhvi, CA For The Respondent by: Shri Satyajeet Goyal, Mrs. Ashima Neb , Sr. DR ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER This appeal has been preferred by the revenue against the order of the Commissioner of Income Tax (Appeals) V New Delhi dated 17.2.2011 in appeal No. 42/10-11 for asstt. year 2006-07 by which the penalty imposed by the AO vide penalty order dated 26.3.2010 passed u/s 271 (1) of the Income Tax Act 1961 (in short the Act) has been deleted and cancelled. 2. The sole ground raised by the revenue in this appeal reads as under :- On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the penalty of ₹ 1,53,65,958/- imposed u/s 271(1)(c) of the Income Tax Act, 1961 3. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amendments and the return was filed on the basis of Supreme Court judgment in the case of Apollo Tyres Ltd. vs. CIT 255 ITR 273 (SC) and Commissioner of Income-tax, Delhi-IV v. HCL Commet Systems Services Ltd. (2008) 172 TAXMAN 217 (DELHI) wherein it was held that provision for bad debt and doubtful debt made in the profit and loss account is an ascertained liability and , therefore, cannot be included in its book profit u/s Section 115B. When the return of income was filed by the appellant, the retrospective amendment to section 115JB regarding the claim bad debts was not on the statutes. The appellant claims that while filing the return or income based on various judicial pronouncements available on the subject, no wrong or malafide claim said to have been made by the appellant in the return of income. At the time of filing return of income no clear cut ruling in favour of such amendment was available, therefore, the appellant did not include the provision for doubtful debts in the book profit declared in the return of income. The appellant has also relied upon the ITAT, Delhi decision in the case of DCIT Circle 10(1) vs. DCM Shriram Consolidated Ltd. ITA No. 2140/Del/2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t vide ground No. 1 to 1.3 have become infructuous and same are not being decided. 4. In the afore-mentioned peculiar facts and circumstances taking into consideration the arguments on behalf of the parties before the Bench, we are of the view that the impugned order deserves to be upheld as the legal position is very well-settled and the assessee cannot anticipate on the date of filing of the return which admittedly was 28.09.2007 that a retrospective amendment in law would be introduced by the Finance (No. 2) Act, 2009 w.e.ef. 1.4.2001 that is subsequent to the date of filing of the return. In the facts of the case even otherwise neither it can it be said that the assesee s claim was not bonafide nor it can be said that the material facts were not properly disclosed at the time of filing of the return. Admittedly as per record, the return was filed on 28.9.2007 based on the past position on the very same facts supported by the judgement of the jurisdictional High Court and the amendment to the statute was introduced with retrospective effect by the Finance Act, 2009. In the afore mentioned peculiar facts and circumstances, the finding of the CIT(A) quashing the penalty order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant, penalty imposed on the basis of retrospective amendment in law has been deleted by the Tribunal : - HMA Udyog (P) Ltd. v. DCIT : ITA No. 2293/Del/2005 - DCIT vs. Ford Credit Kotak Mahindra Ltd.:ITA No.1219/Mum/2007 The aforesaid decisions are applicable in the present case since addition as discussed above, has been confirmed by the CIT(A) by applying the retrospectively inserted clause (i) of Explanation 1 to section 115JB of the I.T.Act. (b) That apart, the Delhi High Court in the recent case of CIT vs. Kas Movie Private Limited in ITA No. 793 of 2011 held that no penalty is leviable where claim made by the assessee is supported by legal advice of the Counsel. It has similarly been held in the following cases, relied upon by the Ld. AR for the appellant: CIT v. Mitsui Co. Ltd. : 272 ITR 565 (Del.) Shyam Gopal Charitable Trust V. DIT (Exemption) : 290 ITR 99 (Del) CIT v. Amar Nath : 173 Taxman 395 (P H)_ Asian Packaging (P) Limited, ITA No. 315/D/2006 CIT v. Sidhartha Enterprises: 322 ITR 80 (P H) Carnation Nutra Analogue Foods Ltd. v. ITO (2009) 34 SOT 203 (Ahd.) DCIT v. A. Tosh Sons (India) Ltd. ITA Nos. 1930 1931/Kol/2011 (Kol) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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