TMI Blog2016 (3) TMI 422X X X X Extracts X X X X X X X X Extracts X X X X ..... rkey, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Appellant : Shri Sunil Chander Sharma, CIT DR For the Respondent : Shri Sanjeev Sapra, CA ORDER Per Prashant Maharishi, A. M. 1. These are the appeals filed by the assessee on identical grounds and the issue involved there in are also same except the amount of penalty therefore same are disposed of by this common order. 2. In ITA No.4199/Del/2013, Assessment Year 2006-07, the assessee has raised the following grounds of appeal:- 1. Whether the CIT(A) under the facts and circumstances of the case and in law was justified in deleting the penalty amounting to ₹ 3,96,39,894/- imposed by the Assessing Officer u/s 271 (l)(c) of the I.T. Act, 1961? 3. In ITA No.4200/Del/2013, Assessment Year 2006-07, the assessee has raised the following grounds:- i. Whether the CIT(A) under the facts and circumstances of the case and in law was justified in deleting the penalty amounting to ₹ 8,91,62,465/- imposed by the Assessing Officer u/s 27(1)(c) of the IT Act, 1961. 4. In ITA No.4201/Del/2013, Assessment Year 2006-07, the assessee has raised the following grounds:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In Phase II the fixed fee structure was done away with and one time Entry Fees (OTEF) system was introduced. Accordingly New applicant was required to bid a price towards one time entry fee and the highest bidder equal to the number of new license to be issued in each of the metro station were declared as successful bidders. Reserve OTEF limits for each of the city was kept at 25 % of the highest valid bid in that city and all the bids below the reserve limits were rejected summarily. The One time entry fee is the charge / fee for the new successful bidder for a period of 10 years with effect from 1.4.2005. Over and above OTEF each successful bidder is also required to pay an annual license fees on revenue sharing basis @ 4 % of gross revenue for the year or 10 % of the OTEF for the concerned city, whichever is higher. On exercise of option given to the exiting broadcasters to migrate to phase II , they were required to pay one time entry fee which is equal to average of all successful bids received under phase II in that city. All these assessee on migration to phase II paid one time entry fee and accordingly got a new grant of permission agreement executed with the ministr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ishment/exchange/ parting of asset or rights therein in capital asset in any manner whatsoever clearly amounted to transfer as per the definition of transfer u/s 2(47) read with Explanation 2. Therefore his first argument was that there is transfer of license due to migration from phase I to phase II of the policy and provision of sub section 2 of section 35ABB should apply. As there is no consideration received the full amount of amount outstanding shall be allowed as deduction to the assessee. Alternatively it is not a case of transfer‟ of license because the Phase -I license had come to an end when the Assessee opted to migrate to Phase -II license, in that situation also license fee expenditure deserves to be allowed in full during the year. Assessee had also made the claim of such license fees as intangible assets depreciable. Assessment Appellate history of the claim 7. Claim of deduction pertaining to Phase- I of licensing fee was disallowed by the AO holding that same is a capital loss as the license was not transferred as required u/s 35ABB (2) of the act. On appeal before CIT (A) who in turn rejected claim of deduction of whole of license fees paid und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for adopting a view favorable to him based on legal advice while making a claim particularly when the directors of the Assessee Company were not conversant with technicalities of income tax law and hence no penalty can be levied on debatable issues. It was further argued that dispute with regard to merely the year of allowability of license fee expenditure cannot attract penalty under section 271 (1)( c ) of the Act. He submitted that Explanation (1) (B) as applied by the AO was not applicable as the assessee had offered an explanation which was bona-fide in nature and all facts relating to the same and material to the computation of its total income had been disclosed and moreover, such explanation as offered was not found to be false by the AO. Decision and Reasons 13. We have carefully considered the rival contentions. On the issue of claim of deduction u/s 35ABB of the act AO has disallowed the whole of the claim holding it as capital expenditure. Before appellate authorities the issue was decided in altogether in a different manner discussing the claim of deduction u/s 35ABB of the act. There is no The Ld. CIT (A) has deleted the penalty u/s 271(1) (c) of the act hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such expenditure u/s 35ABB and rest of the amount was to be allowed in next nine years. It is claimed by the appellant that it has disclosed all material facts necessary for the assessment, it has never tried to conceal or file inaccurate particulars of income, and therefore, penalty for concealment could not be imposed. During appellate proceeding the appellant has stated that Explanation-(l)(B) as applied by the Assessing Officer was not applicable to the facts of the appellants case, as the appellant had offered an explanation which was bonafide in nature and all the facts relating to the same and material to the computation of its total income had been disclosed. The appellant has also submitted that such explanation furnished by the appellant was not found to be false by the Assessing Officer. The appellant has also submitted that the Assessing Officer has treated the entire license fee of Phase-I as capital loss whereas C1T(A) has held that such license fee is allowable proportionately over the ten years license term starting from A.Y. 2006-07 onwards in accordance with section-35ABB. This clearly shows that there was difference of opinion/ interpretation with regard t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claims, debatable claims and difference of opinion as held inter-alia by the Hon'ble Supreme Court in a recent judgment in .e case of Commissioner of Income tax Vs. Reliance Petro products Pvt. Ltd. reported in 322 ITR 158 (SC) the head notes of the said case reads as under:- A glance at the provisions of Section 271(l)(c) of the Income Tax Act, 1961, suggests that in order to be covered by it, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. The meaning of the word particulars used in Section 271(l)(c). would embrace the details of the claim made. Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars. In order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee, because that is the only docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue involved was properly disclosed and there was no concealment of facts by the appellant nor inaccurate furnishing of any particulars of income. The aforementioned differential tax treatment given by the appellant, assessing officer and the CIT(Appeals) clearly points out that the issue in hand is debatable. In view of the above, it is held that the appellant has not concealed any particulars of its income nor it has furnished any inaccurate particulars in regard to claim made for license fee and interest income. Therefore, the levy of penalty is not justified and same is cancelled. 14. On reading of order of CIT (A) we could not find any infirmity and none was pointed by Ld DR. In this case it is merely the claim made was unsuccessful before two authorities but none of the authorities have held that the claim of the assessee not at all sustainable. Merely because the deduction claim was negative by the appellate authorities assessee cannot be subjected to penalty by holding that assessee has deliberately furnished inaccurate particulars of Income. In this case AO has held because the claim of the assessee was not allowed u/s 35ABB of the act assessee has deliberately ..... X X X X Extracts X X X X X X X X Extracts X X X X
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