9911796707
TMI Blog2015 (6) TMI 887X X X X Extracts X X X X X X X X Extracts X X X X ..... -05 to 2006-07 vide his separate orders dated 30.11.2009 (for AY 2004-05 and 2005-06) and 31.12.2008 (for AY 2006-07). Penalty was imposed by ITO, Ward-7(1), Kolkata u/s. 271(1)(c) of the Act vide his separate orders dated 17.05.2010 (for AY 2004-05 and 2005-06) and 24.06.2009 (for AY 2006-07). 2. The only common issue in these three appeals of revenue is against the order of CIT(A) deleting the penalty levied by AO u/s. 271(1)(c) of the Act from the claim of set off of loss relating to Madras Elastomes Ltd. (in short MEL), a company under BIFR, which was merged with the assessee company. The revenue has raised common ground for all the years except variance in amount and for the sake of brevity, we reproduce the ground of appeal for AY 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , therefore, he levied the penalty. Aggrieved, assessee preferred appeal before CIT(A), who deleted the penalty by relying on the decision of Reliance Petro products Ltd. (2010) 322 ITR 158 (SC) by observing as under: "After careful consideration of the appellant's submission along with the case laws relied upon, perusing the facts of the case and also the Assessment /Order, impugned penalty order and other materials available on record, I agree with the argument of the A/R of the appellant. In my opinion, as the appellant disclosed its income in the return on the bonafide belief based on the opinion of a legal expert and claimed the set off of loss of the amalgamated company at the most it can be said that it has committed an error an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, revenue is now in appeal before us. 4. We have heard rival submissions and gone through facts and circumstances of the case. We find that the assessee had disclosed taxable income of Rs. 17,90,970/- based upon its audited accounts for the year ended 31.03.2004. However, in the return of income the assessee has claimed the set off of the loss of MEL of Rs. 17,90,970/- and there by disclosed income of Rs. Nil in the return of income. It is not in dispute that the assessee was in fact merged and/or amalgamated with MEL and the loss incurred by the MEL at Rs. 17.90,970/- was set off with the profit of the assessee, so that in the computation made, the resultant income was Nil. We find that at that time merger proposal of the company was pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the instant case the audited profit & loss account, correctly disclosed the profit of the assessee which was set off against the loss incurred by the company under amalgamation. Therefore, the basic element necessary for initiation of proceeding u/sec 271(1)(c) of the Income Tax, 1961 that the assessee has furnished inaccurate particulars of income is conspicuously absent. The only point, in the instant case as per the argument of the Ld. counsel for the assessee was on which the impugned action has been conceived the AO. stated that income disclosed in the return which is based on an expert legal opinion, from the simple fact that the assessee was amalgamated with MEL, there was an error in this respect committed by the assessee, in aid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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