TMI Blog2010 (4) TMI 1144X X X X Extracts X X X X X X X X Extracts X X X X ..... of business, is allowable against other income. It was pleaded that the assessee neither concealed its income nor furnished inaccurate particulars of income as the facts were truly disclosed to the department in the return and the claim of deduction has been made on account of interpretation of law. It was further claimed that nothing was divulged by the assessee and these were the mere allegation of the firm. The ld. Counsel for the assessee placed reliance on the following decisions :- Cement Marketing Co. Ltd. v. ACST, 124 ITR p. 15 (SC) CIT v. Harshvardhan Chemicals; 259 ITR p. 212 (Raj. CIT v. Shivnand Steels; 256 ITR p. 683 (Mad .) Surumchand Sharadchand v. UOI; 286 ITR p. 370 (M.P.) Pandit Govind Mishra v. UOI; 238 ITR p. 338 (All.) CIT v. HMA Udyog Pvt. Ltd.; 159 Taxman 394 (Del) CIT v. Shivanand Steels Ltd.; 256 ITR 683 (Mad.) CIT v. SPK Steels Pvt. Ltd. (270 ITR 156) (M.P.) Union of India v. Rajasthan Spinning Weaving Mills; (2009) 13 ITJ 109 (SC) On the other hand, the learned Senior DR defended the impugned order by contending that firstly the Tribunal has affirmed the decision of the the learned Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is kept in juxtra position, with the facts of the present appeal, one clear facts is oozing out that the assessee has not debited the impugned amount, rather the firm debited the amount, therefore, what papers could be filed by the assessee since the amount was debited by the firm. Even if there is any allegation by the erstwhile remaining partners of the firm M/s Modern Paper Products, that itself may not be a good ground for imposing penalty on the assessee because for that separate legal remedy is available with the firm/remaining partners and unless and until the allegations are affirmed by the competent court, which is having a jurisdiction to deal with that matter, suo moto, these cannot be made a ground for imposing penalty. In the present appeal, the learned Assessing Officer has levied the penalty on account of disallowance of loss of ₹ 15,40,818/-, claimed by the assessee, on the ground that wrong claim of expenditure, stating the same to be in the nature of expenditure, has been made. Even vide letter dated 27.4.2009 (page 3 of the paper book), addressed to the learned DCIT the assessee explained the facts and at page 4 of the paper book (computation of income) th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mately decided against the assessee, it cannot be said that the assessee concealed the particulars of income or furnished inaccurate particulars. The Hon ble Delhi High Court held that the provisions of section 271(1)(c) are not attracted. The Hon ble jurisdictional High Court in the case of SPK Steels Private Limited (supra) held that the penalty was rightly cancelled. While coming to this conclusion, the Hon ble High Court placed reliance in Cement Marketing of India Limited v. Asstt. CST; 124 ITR 15 (SC); 45 STC 197 (SC). In a later decision the Hon ble Apex Court in the case of Union of India v. Rajasthan Spinning Weaving Mills and others (supra), after considering the decision in Union of India v. Dharmendra Textiles Processors (2009) 12 ITJ 40 (SC), Cosmic Dye Chemical v. CCE; 75 ELT 721; Continental Foundation Joint Venture v. CCE; (2007) (216) ELT 177 (SC); Dilip and Shroff v. JCIT (2007); 291ITR 519; 210 CTR 228 (SC) and Chairman SEBI v. Shriram Mutual Fund Others (2006) 5 SCC 361 (para 20) decided in favour of the assessee. As far as the reliance of the learned Sr. DR upon the decision in Dharmendra Textiles (supra) is concerned, the Hon ble Court in para 23 held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o to section 11A. Mis-statement of suppression of fact must be wilful. The same position was reiterated in Continental Foundation Joint Venture v. CCE (supra). The expression suppression has been used in the proviso to section 11A of the Central Excise Act accompanied by very strong words as fraud or collusion and, therefore, has to be construed strictly. Mere omission to give correct information may not be said to be suppression of facts unless it was deliberate to stop the payment of duty. An incorrect statement cannot be equated with a willful mis-statement. The latter implies making of an incorrect statement with the knowledge that the statement was not correct. The Hon ble jurisdictional High Court in the case of Skyline Auto Products Private Limited (271 ITR 335); 142 Taxman 558 (M.P.) where the assessee claimed depreciation for the full year in the first year of starting of production though he was entitled to fractional depreciation, it was held that it was a case of bona fide mistake rather a deliberate mistake, therefore, cannot be a good ground for imposing penalty u/s 271(1) (c) of the Act. 6. In the present appeal, since the assessee claimed the impugned amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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