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2015 (11) TMI 916 - ITAT DELHI

2015 (11) TMI 916 - ITAT DELHI - [2015] 42 ITR (Trib) 571 (ITAT [Del]) - Penalty levied under section 271(1)(c) - disallowance under section 14A - CIT(A) deleted penalty - Held that:- Admittedly the assessee on its own had disallowed a sum of ₹ 2,43,670 under section 14A but the Assessing Officer computed the disallowance as per rule 8D at ₹ 35,71,608. The provision of rule 8D comes into play only when the Assessing Officer records a finding that having regard to the accounts of the .....

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the assessee was a false claim. The Assessing Officer in the assessment order or in the penalty order nowhere states that the assessee's claim was false and he has invoked rule 8D for computing the disallowance under section 14A. Therefore, this was merely a difference of opinion between the assessee and the Department on the computation of disallowance under section 14A. The decision of the hon'ble Supreme Court in the case of Reliance Petroproducts Pvt. Ltd. (2010 (3) TMI 80 - SUPREME COURT) i .....

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9) TMI 52 - SUPREME COURT ] - Decided in favour of assessee. - I. T. A. Nos. 4364 and 4365 /Del/ 2013 (assessment year 2009-10). - Dated:- 17-4-2015 - S. V. MEHROTRA (Accountant Member) and C. M. GARG (Judicial Member) Smt. Parvinder Kaur, for the appellant. Rohit Jain, for the respondent. ORDER The order of the Bench was delivered by 1. S. V. Mehrotra (Accountant Member).-These appeals, preferred by the Revenue in respect of the aforementioned assessees assailing the orders of the Commissioner .....

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ced that the assessee had shown dividend income to the tune of ₹ 2,43,67,057 but no separate expenses incurred by it in lieu of this income had been shown. The assessee further submitted that the expenditure had been incurred as administrative expenses and they were statutory or necessary expenses, hence should not be disallowed. The Assessing Officer computed the disallowance under section 14A at ₹ 35,71,608 and after reducing the disallowance of ₹ 2,43,670 made by the assesse .....

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n that rule 8D was inserted by the Income-tax (Fifth amendment) Rules, 2008 with effect from March 24, 2008 and he relied upon the judgment pertained to the assessment year 2001-02, i.e., when rule 8D was not inserted. The Assessing Officer observed that the assessee-company had not correctly disallowed the expenses required to be disallowed under section 14A of the Act as per rule 8D. Therefore, the assessee had furnished inaccurate particulars of income. Relying on the decision of the hon' .....

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cer rule 8D was applicable whereas as per the assessee rule 8D was not applicable. 5. We have considered the submissions of both parties and have perused the record of the case. Admittedly the assessee on its own had disallowed a sum of ₹ 2,43,670 under section 14A but the Assessing Officer computed the disallowance as per rule 8D at ₹ 35,71,608. The provision of rule 8D comes into play only when the Assessing Officer records a finding that having regard to the accounts of the assess .....

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false claim. The Assessing Officer in the assessment order or in the penalty order nowhere states that the assessee's claim was false and he has invoked rule 8D for computing the disallowance under section 14A. Therefore, this was merely a difference of opinion between the assessee and the Department on the computation of disallowance under section 14A. The decision of the hon'ble Supreme Court in the case of Reliance Petroproducts Pvt. Ltd. (supra) is squarely applicable to the facts o .....

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claim of the Department that any of the details furnished by the assessee in the return on the basis of which computation made under rule 8D was made by the Assessing Officer was false. We further find that the learned Commissioner of Income-tax (Appeals) in paras 5.1 to para 5.4 of his order has held as under: "5.1 Section 271(1)(c), provides for imposition of penalty in case the Assessing Officer, in the course of any proceeding under the Act, is satisfied that : (i) any person had concea .....

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ld that the requirement of proof of mens rea on the part of the Revenue, would no longer be necessary as held in Addl. CIT v. Jeevan Lal Sah [1994] 205 ITR 244 (SC) and B. A. Balasubramaniam and Bros. Co. v. CIT [1999] 236 ITR 977 (SC). The role of the Explanation it was pointed out, was only to place the burden of proof squarely on the taxpayer. 5.3 In this context two landmark judgments were given by the apex court in Dilip N. Shroff v. Joint CIT [2007] 291 ITR 519 (SC) and T. Ashok Pai v. CIT .....

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ry burden of proof is on the Revenue : The statute requires satisfaction on the part of the Assessing Officer. He is required to arrive at a satisfaction so as to show that there is primary evidence to establish that the assessee had concealed the amount or furnished inaccurate particulars and this onus is to be discharged by the Department. (iv) The Assessing Officer while considering levy of penalty should consider whether the assessee has been able to discharge his part of the burden. He shou .....

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