TMI Blog2015 (11) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... utomatically attract penalty. Therefore, we reach to a logical conclusion that the Assessing Officer levied penalty in a hasty manner without assigning any justified and reasonable cause which was upheld by the Commissioner of Income-tax (Appeals) in a mechanical manner without going into the facts and circumstances of the case and ignoring this important fact that the assessee submitted details of ledger account, bills and vouchers during quantum appellate proceedings which cannot be ignored. Therefore, conclusion of the Assessing Officer that the assessee routed her own money earned from undisclosed sources in the garb of sale of scrap for levy of penalty under section 271(1)(c) is not sustainable. Finally, we hold that the penalty was im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Himachal Pradesh in Baddi, District Solan, the assessee is claiming deduction under section 80-IC of the Act equal to the net 100 per cent. of the profit. During the course of assessment proceedings, the Assessing Officer found that in the miscellaneous income, the assessee had shown a sum of ₹ 16,28,174 on account of sale of scrap and a sum of ₹ 33,674 on account of interest. The Assessing Officer asked the assessee to produce the bills in respect of scrap sales but the assessee failed to produce the same to support his claim. Therefore, the Assessing Officer held that the assessee had routed her undisclosed income in the garb of scrap sales and had also made incorrect claim of deduction in respect of the amount of alleged s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt of Madras in the case of Fenner (India) Ltd. v. CIT (No. 2) [2000] 241 ITR 803 (Mad), the profit from sale of scrap is eligible for deduction under section 80HH of the Act, therefore, in the similar set of facts and circumstances of the present case, the amount earned from sale of scrap should have been allowed as deduction under section 80-IC of the Act which is similar to the provisions of section 80HH of the Act. Learned counsel further placed reliance on the decision of the hon'ble Supreme Court in the case of CIT v. Reliance Petroproducts P. Ltd. [2010] 322 ITR 158 (SC) and submitted that if the claim of the assessee was not accepted or was not found to be acceptable by the Revenue, then penalty is not leviable only because th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e wherein the assessee submitted written submissions along with ledger account of miscellaneous income and bills of scrap sale to M/s. Atul Casting Pvt. Ltd., Nalagarh. Learned counsel has further drawn our attention towards paper book page 55 and submitted that this additional evidence was also confronted to the Assessing Officer who did not raise any serious objection or adverse material, therefore, it cannot be held that the assessee did not submit relevant details, bills and vouchers supporting the sale of scrap by the assessee during the financial year under consideration. Learned counsel finally submitted that the penalty imposed without any justified and cogent reason and upheld by the Commissioner of Income-tax (Appeals) does not su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated October 23, 2012 objected to the admission of additional evidence but could not bring any adverse material to controvert or to demolish the evidence submitted by the assessee in support of genuineness of the amount received from sale of scrap. We also note that similar kind of amount received by the assessee during the assessment year 2007-08 which was of ₹ 5 lakhs was also accepted by the Assessing Officer in the order dated December 11, 2009 passed under section 143(3) of the Act, therefore, similar kind of claim which could not be supported by way of bills and vouchers during the subsequent year cannot be held as concealment of particulars of income or furnishing of inaccurate particulars of income of the assessee, especially ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2010] 322 ITR 158 (SC) where their Lordships held that merely because the claim of the assessee was not accepted or was not found to be acceptable by the Revenue authorities, only on this basis penalty under section 271(1)(c) is not leviable. The facts and circumstances of the present case are squarely covered in favour of the assessee as in the present case also, the assessee submitted supportive bills and vouchers to justify the receipt of amount from sale of scrap before the Commissioner of Income-tax (Appeals) although the claim of the assessee for deduction under section 80-IC of the Act has been declined by the Revenue authority but rejection of the claim does not automatically attract penalty. Therefore, we reach to a logical conclu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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