TMI Blog2021 (8) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted to be at arm s length. In view of the aforesaid, we are inclined to delete the adjustment made to the ALP of export commission paid to the AE. This ground is allowed. Disallowing full deduction of VRS and early retirement incentive granted to employees - HELD THAT:- As respectfully following the decisions of the co-ordinate bench in assessee s own case,[ 2014 (8) TMI 831 - ITAT MUMBAI] we allow the deduction claimed by the assessee. Disallowance of depreciation on obsolete assets - claim disallowed simply for the reason that similar claim made by the assessee in preceding assessment years has been disallowed - HELD THAT:- As decided in own case [ 2014 (8) TMI 831 - ITAT MUMBAI] depreciation was allowable on obsolete assets to the assessee. Disallowance of interest expenditure u/s 14A - HELD THAT:- We find, while deciding identical issue in preceding assessment years [ 2014 (8) TMI 831 - ITAT MUMBAI] the Tribunal has deleted the disallowance of interest expenditure made under section 14A. Disallowance being expenditure incurred towards computer software charges - HELD THAT:- As decided in own case [ 2014 (8) TMI 831 - ITAT MUMBAI] expenditure had n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction under section 80HHC - As sales tax set off and refund are not eligible for deduction in view of Explanation (baa) to section 80HHC. Therefore, 90% of such receipt has to be excluded from the business profits as well as turnover for computing deduction under section 80HHC. Penalty u/s 271(1)(c) - HELD THAT:- For addition on account of Transfer Pricing adjustment relating to payment of commission as rightly observed by Commissioner (Appeals), such disallowances cannot automatically lead to the conclusion that the assessee has either furnished inaccurate particulars of income or has concealed its income. We also agree with Commissioner (Appeals) that the issues relating to disallowances/additions, based on which penalty has been imposed are debatable issues on which more than one opinion is possible - transfer pricing adjustment was made on purely estimate basis. Thus, as rightly held by learned Commissioner (Appeals), such additions/disallowances, based on difference of opinion, cannot lead to the inference that assessee has either furnished inaccurate particulars of income or concealed its income so as to levy penalty under section 271(1)(c) On record that whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of commission to Aventis Germany, reimbursement of expenses, purchase of shares, purchase of patent rights and trademarks from AE in Germany and France, reimbursement of expenses from AE. As it appears, the assessee aggregated the transactions relating to import and exports of active formulations, bulk drugs, payment of commission, etc. and benchmarked them in the transfer pricing study report applying transactional net margin method (TNMM). Since, the operating margin shown by the assessee at 13.83% was more than the mean operating margin of the comparable companies worked out at 7.69%, the transactions were claimed to be at arm s length. Apparently, the TPO accepted the benchmarking of the assessee in respect of all international transactions, except, payment of export commission to AE. Insofar as this transaction is concerned, the TPO has treated it as a completely independent and separate transaction and proceeded to verify whether the export commission paid at 12.5% of the sales is at arm s length or not. In response to query raised, the assessee furnished a detailed submission along with supporting evidence justifying its claim that commission paid at 12.5% on sales is at a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it fixed by RBI in circular No.17 dated 19th May, 1999. Therefore, the payment of export commission should be considered to be at arm s length. He submitted, since payment of commission is closely linked to the transactions of exports and imports, they have to be aggregated for the purpose of benchmarking. Whereas, the TPO has selectively segregated payment of commission as an independent transaction for benchmarking while accepting the other transactions. He submitted, when the TPO has accepted TNMM as the most appropriate method in respect of other closely linked transactions, he should not have segregated the payment of commission. The learned senior counsel submitted, the assessee has been paying export commission from assessment year 1992-93 onwards at the very same percentage and no adjustment has ever been made to the price of commission payment. He submitted, in the year 1999- 2000, the TPO made similar adjustment; however, learned Commissioner (Appeals) allowed the entire commission paid at 12.5% finding it to be at arm s length. He submitted, in assessment year 2005-06, the TPO himself accepted the export commission paid at 12.5% to be at arm s length. Thus, he submitted, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 12.5% and proposing adjustment, has not followed the statutory mandate. Rather, the decision of the TPO in determining the ALP of export commission at 3% is without any basis and purely on conjectures and surmises. The TPO has not shown any valid reason why assessee s claim that the transactions relating to import and export of formulations and bulk drugs as well as payment of export commission being closely linked, should not be aggregated together for benchmarking purpose. 8. It is also relevant to observe, learned Commissioner (Appeals), while determining the ALP of export commission at 5% also fell into the same error as the TPO. The determination of ALP at 5% by learned Commissioner (Appeals) is also purely on adhoc/estimate basis without following any prescribed method. It is relevant to observe, before us, the assessee has furnished material which demonstrates that since assessment year 1992-93, the assessee had been paying commission on export sales at the same rate of 12.5%. However, in none of the assessment years till assessment year 2001-02, the TPO has proposed any adjustment to the rate at which export commission was paid to the AE. It is evident, only in asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee, in its own case in assessment years 2000- 01 2001-02. Further, he submitted, the appeals filed against the aforesaid decisions of the Tribunal were not admitted by the Hon ble High Court. Thus, he submitted, the issue is squarely covered in favour of the assessee. In addition, he relied upon the following decisions:- 1. K Ravindranathan Nair vs CIT 247 ITR 178 (SC) 2. CIT vs Foseco India Ltd 352 ITR 320 (Bom) 3. Foseco India Ltd vs ACIT ITA No.4667/M/2005 12. The learned departmental representative, though, fairly submitted that the issue is covered by the earlier decisions of the Tribunal, however, relied upon the observations of the assessing officer and learned Commissioner (Appeals). 13. We have considered rival submissions and perused materials on record. As noted by us, identical issue came up for consideration before the Tribunal in assessee s own case for assessment year 2000-01 . The Tribunal, while disposing of the appeals, both, by assessee and revenue in ITA 3703/Mum/2004 and others vide order dated 16-04-2014 has held as under:- 10.2 We have considered rival contentions and found from the record that expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year, upheld the disallowance. 13. The learned senior counsel for the assessee submitted, while deciding identical issue in assessee s own case in assessment years 1998-99, 1999-2000, 2000-01 and 2001-02 claim of depreciation has been allowed. He submitted, the aforesaid decisions of the Tribunal have been accepted by the department and no further appeals have been filed before the Hon ble High Court. 14. The learned departmental representative agreed with the aforesaid submissions of the assessee. 15. We have considered rival submissions and perused materials on record. It is evident, assessee s claim of depreciation on the opening WDV of block of assets has been disallowed simply for the reason that similar claim made by the assessee in preceding assessment years has been disallowed. As brought to our notice by learned senior counsel for the assessee, while deciding identical issue in assessee s own case in assessment years 1998-99 to 2001-02, the Tribunal has allowed assessee s claim of depreciation. In the latest order passed for the assessment year 2001-02 in ITA No.8978/Mum/2004 8746/Mum/2004 dated 28-07-2014, the Tribunal, following its earlier order, has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Hon ble High Court and in other assessment years, the department has not filed any appeal. 20. The learned departmental representative fairly agreed with the aforesaid submissions of the learned senior counsel for the assessee. 21. Having considered rival submissions, we find, while deciding identical issue in preceding assessment years, the Tribunal has deleted the disallowance of interest expenditure made under section 14A of the Act. In the latest order passed for the assessment year 2001-02 (supra), the Tribunal, following its earlier decisions, has deleted the disallowance under section 14A, holding as under:- 10. Ground No.5 is regarding disallowance U/S.14A. Learned AR stated that this issue has been decided by the Tribunal in assessee's own case for A.Y. 1990-91 and 1998-99 in favour of the assessee, against which the department has not filed any appeal before the High Court. Precise observation of the Tribunal for the A.Y. 1998-99 reads as under :- 22. The AO has not applied section 14A. In fact this section was not in the statute during that year. The learned CIT(Appeals) has factually analyzed the issue and has come to a conclusio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is not allowable, as, such payment would not be admissible. 25. Drawing our attention to page 192 of the paper book, learned senior counsel for the assessee submitted, the payments made were for purchase of application software and consultancy charges. Therefore, expenditure cannot be of capital nature. Further, he submitted, the issue is covered by the decision of the Tribunal in assessee s own case for assessment year 1999-2000. In addition, he relied upon the following decisions:- 1. CIT vs Asahi India Glass Ltd 346 ITR 329 (Del) 2. CIT VS Amway India Enterprise 346 ITR 341 (Del) 3. CIT vs Raychem RPG Ltd 346 ITR 138 (Bom) 26. The learned departmental representative fairly agreed that the issue is covered by the earlier decision of the Tribunal. 27. We have considered rival submissions in the light of decisions relied upon and perused materials on record. It is evident, the disallowance has been made on the reasoning that the expenditure incurred is of capital nature. Per contra, it is the claim of the assessee that the expenditure is not of capital nature. As we find from record, it is the claim of the assessee that the assessee had only li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the assessing officer to make adjustment to the stock, purchase, sale, excise duty payment and if, after doing so, it results in any difference, then restrict the addition to that extent only. 31. The learned senior counsel of the assessee submitted that even if no adjustment is made on account of unutilized modvat credit, it will have no impact on the profit. In this regard, he relied upon the decision of the first appellate authority in assessee s own case for assessment years 2006-07 and 2007-08. Further, he submitted, no such adjustment has been made from assessment year 2008-09 onwards. He submitted, identical issue relating to adjustment made under section 145A was decided in favour of the assessee in assessment year 1999-2000 and department has not filed any appeal against the decision of the Tribunal. In addition, he relied upon the following decisions:- 1. Hawkins Cookers Ltd vs ITO (2008) 14 DTR 206 (Mum) 2. CIT vs Mahalaxmi Glass Works (P) Ltd (2009) 318 ITR 116 32. The learned departmental representative relied upon the observations of learned Commissioner (Appeals). 33. We have considered rival submissions and perused materials on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has also included bad debts recovered during the year and processing charges in the business profit and total turnover for claiming deduction under section 80HHC of the Act, instead of reducing 90% of such income, in terms of Explanation (baa) of section 80HHC. Whereas, the assessing officer was of the view that it has to be reduced by 90% for claiming deduction under section 80HHC. Noticing the above, the assessing officer called upon the assessee to explain, why 90% of the sales-tax set off, bad debts recovered and processing charges should not be reduced from the business profits for computing deduction under section 80HHC of the Act. Though, the assessee objected to the proposed disallowance; however, the assessing officer, rejecting the submissions of the assessee reduced 90% out of the income received from sales-tax set off, DEPB entitlements, bad debts and processing fee by resorting to of Explanation (baa) of section 80HHC while computing deduction under the said provision. Assessee contested the aforesaid decision of the assessing officer before learned Commissioner (Appeals). After considering the submissions of the assessee in the context of facts and materials on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fall under sections 28(iiia), 28(iiib) 28(iiic) of the Act. Further, the receipts from DEPB entitlement cannot be considered to be in the nature of brokerage, commission, rent, charges or any other receipt of similar nature so as to bring it within the purview of Explanation (baa) to section 80HHC. He submitted, though, learned Commissioner (Appeals) has agreed with the assessee that DEPB entitlement does not come within the ambit of Explanation (baa); however, he has erroneously held that the assessee would be entitled to claim such deduction only on the DEPB entitlement received and utilized during the year. Thus, he submitted, since the receipt from DEPB entitlement is not covered under Explanation (baa) to section 80HHC of the Act, 90% of such receipts cannot be reduced for computing deduction under section 80HHC of the act. In support of such contention, he relied upon a decision of the Hon ble Supreme Court in case of Topman Exports vs CIT 342 ITR 49 (SC) and the decisions of the Tribunal in assessee s own case in assessment years 2000-01 and 2001-02. 39. The learned departmental representative, on the other hand, strongly relied upon the observations of the assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e considered for reduction as per Explanation (baa). Subsequently, however Hon'ble High Court in case of Pfizer Ltd. (330 ITR 62) after referring to the judgement of in case of Dresser Rand (supra) held that insurance claim on stock in trade was not an independent item of income and therefore has to be considered as integral part of business profit. However, since the sales tax refund has been specifically considered by the Hon'ble High Court in case of Dresser Rand (supra) respectfully following the said decision, we hold that sales tax refund and set off will be considered for reduction as per Explanation (baa). Further, the alternate claim of the assessee that only the net receipt should be considered for reduction as per Explanation (baa) is covered by the judgement of Hon'ble Supreme Court in case of ACG Associated Capsules P. Ltd. v. CIT (343 ITR 89). We therefore direct the Assessing Officer only the net receipt after deducting expenditure incurred for earning of such income, will be considered for reduction as per Explanation (baa). 11.1 in view of the above, the issue with regard to allowing claim of deduction in respect of sales tax set off and refund, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs. Ravindranathan Nair, 295 ITR 228(SC), wherein the Hon'bie Supreme Court has decided this issue in favour of the department 21. At the outset, we may state that, in the present case, we are dealing with the law as it stood during assessment year 1993-94. At that time Section 80HHC(3) of the I. T. Act constituted a Code by itself. Subsequent amendments have imposed restrictions/qualifications by which the said provision has ceased to be a code by itself. In the above formula there existed four variables, namely, business profits, export turnover, total turnover and 90% of the sums referred to in clause (baa) to the said Explanation, in the computation of deduction under Section 80HHC ail four variables had to be taken into account. All four variables were required to be given weightage. The substitution of Section SOHHC(3) secures profits derived from the exports of eligible goods. Therefore, if all the four variables are kept in mind, it becomes dear that every receipt is not income and every income would not necessarily include element of export turnover. This aspect needs 10 be kept in mind while interpreting clause (baa) to the said Explanation, The said cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the l.T. Act. 23. Before concluding we state that the nature of every receipt needs to be ascertained in order to find out whether the said receipt forms part of/or that it has an attribute of an export turnover. When an indirect, tax is collected by the taxpayer on behalf of the government the tax recovered is for the government. It may be an income in the conceptual sense or even under the I. T. Act but while working out the formula under Section 80HHC(3) of the I. T. Act and while applying the four variables one has to ascertain whether the receipt has an attribute of export turnover. An indirect tax like excise duty does not have that element of export turnover as understood in the above formula. As stated above, it is recovered by the taxpayer on behalf of the government Therefore, in the present cases, our judgment in Commissioner of Income Tax. Cotmhatore v. M/s. Lakshmi Machins Works - 2007(6) Scale 168, has no application. 24. Accordingly, the impugned judgments of the High Court and the Tribunal are set aside and the above civil appeals filed by the Department are accordingly allowed with no order as to costs. 17.1 This issue has been di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the extent of received and utilized during the year would not be covered under Explanation (baa) of section 80HHC of the Act. In our view, the nature and character of DEPB entitlement would remain same, whether it is utilized or unutilized. Further, the reasoning of the assessing officer that DEPB entitlement is covered under section 28(iv) requires thorough examination. It is also noticed, while deciding identical issue in assessee s own case in assessment year 2000-01 (supra), the Tribunal has directed the assessing officer to compute deduction on DEPB license by following the ratio laid down by the Hon ble Supreme Court in case of Topman Exports vs CIT (supra). For better appreciation, the observations of the Tribunal in this regard are reproduced below:- 19. Ground No.(vii) is regarding directing the AO to calculate deduction u/s.80HHC without reducing 90% of the DEPB license sold without appreciating the facts of the case. This issue has been decided in favour of the assessee by the decision of Hon'ble Supreme Court in the case of Topman Exports Vs. CIT, 342 ITR 49 (SC), wherein the Hon'ble Supreme Court has held as under :- The aforesaid dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19.1 We have considered rival contentions and perused the record. As the issue is covered by the decision of the Hon'ble Supreme Court in the case of Topman Exports (supra), respectfully following the same, we direct the AO to compute deduction on DEPB since license sold in terms of decision in the case of Topman Exports (supra). 47. Pertinently, the same view was reiterated by the Tribunal while deciding revenue s appeal for assessment year 2001-02 (supra). On a careful perusal of the observations of the Tribunal reproduced above, it appears that the Tribunal has proceeded on the basis that the income claimed as deduction under section 80HHC of the Act arises out of sale of DEPB license. However, before us, it is the specific contention of the learned senior counsel for the assessee that DEPB entitlement has not arisen out of sale of DEPB license, but has accrued as income to the assessee. On a reading of the impugned assessment order as well as the order passed by the learned Commissioner (Appeals), prima facie, we are of the view that various facts relating to the issue either have not been properly placed before the departmental authorities or have not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, due to amalgamation, the amounts could not be recovered in absence of proper documentation. Thus, it was submitted, the bad debts written off has to be allowed as deduction either under section 36(1)(vii) or as business loss under section 28 of the Act. Learned Commissioner (Appeals), relying upon his order passed for assessment year 2000-01 granted partial relief to the assessee, while, upholding disallowance for the balance amount. 50. The learned senior counsel for the assessee submitted, the only reason for disallowance of assessee s claim is, the assessee has not proved that the debt is not recoverable. He submitted, as per the amended provisions of section 36(1)(vii), there is no requirement for the assessee to prove that the debt has become bad and not recoverable. He submitted, once the debt is written off in the books of account, it has to be allowed. In support, learned senior counsel relied upon the following decisions:- i. TRF Ltd vs CIT (2010) 323 ITR 397 (SC) ii. ACIT vs Glaxo Smithkline Pharmaceuticals Ltd ITA No.6444/Mum/2007, dt 28-01-2011 51. The learned departmental representative relied upon the observations of the assessing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this is a recurring dispute between the assessee and the revenue right from assessment year 1994-95. In all the preceding assessment years, the addition/enhancement made to the ALV has been deleted and as stated before us, the revenue has accepted the decision of the Tribunal. In the latest order passed for assessment year 2001-02, the Tribunal, in ITA No.8978 8746/Mum/2004 dated 23.07.2014 has decided the issue in favour of the assessee, holding as under:- 6.2 We have heard rival contentions, perused the record and orders of the Tribunal and found that the very same issue has already been decided by the Tribunal in assessee's own case in terms discussed above. After considering the decision of Hon'ble Supreme Court, the Tribunal has concluded that gross annual ratable value of the property for the purposes of computation of house property income is to be determined at the annual value determined by Municipal Corporation. As the facts and circumstances during the year under consideration are same, hence, respectfully following the decision of the Tribunal, we direct the AO to determine ALV at the value determined by Municipal Corporation for the year under consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lude the excise duty from the total turnover while computing the eligible deduction u/s.80HHC. This issue has been decided by the Hon'ble Supreme Court in the case of CIT Vs. Laxmi Machine Works, 290 ITR 667(SC), wherein it was held that excise duty has no element of profit, therefore, not includible in total turnover for computing deduction u/s.80HHC. Respectfully, following the decision of the Hon'ble Supreme Court, we do not find any infirmity in the order of CIT(A) directing for exclusion of excise duty from the total turnover for computing deduction u/s.80HHC. 64. In view of the aforesaid, we uphold the decision of learned Commissioner (Appeals) on the issue. 65. As regards set off of sales-tax refund, while deciding corresponding issue raised in ground 7(a) of assessee s appeal in ITA No.3092/Mum/2016, we have followed the decision of the Tribunal in assessee s own case for assessment year 2000-01, wherein, it is held that sales tax set off and refund are not eligible for deduction in view of Explanation (baa) to section 80HHC. Therefore, 90% of such receipt has to be excluded from the business profits as well as turnover for computing deduction under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , indirect cost attributable to export includes the items of expenditure only if it has some connection, link, attributes to - ' export. This proposition propounded by the CIT(A) is apparently against the provisions of section 80HHC(3)(b). If the provisions of sec 80HHC(3)(b) are read in conjunction with clause (e) of Explanation to the said sub. section, it is clear that the indirect cost . for the purpose of allocation under sub.sec (3) shall be taken as the total indirect cost incurred for the total turnover (local + export) and the same has to be allocated in the ratio of export turnover of trading goods to the total turnover 10.1 For ready reference, we quote sec 80HHC(3)(b) and clause (e) of Explanation as under: [(3) For the purposes of sub-section (1) - (a)...................... : (b) where the export out of India is of trading goods, the profits ' derived from such export shall be the export tumover45 in respect of such trading goods as reduced by the direct costs and indirect costs attributable to such export; (c)............ , Explanation.-For the purposes of this sub-section, - (a).................... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned order as the respondent defended against the appeal filed by other party has been provided under Rule 27 of ITAT Rules; therefore, though the impugned order of the C!T(A) would stand and will have full effect in so far as it is against the revenue; but if the plea raised by the revenue is accepted as regards the validity of the impugned order but then the revenue succeeds only to the extent that the appeal of the assesses would fait. 10.7 The scope of Rule 27 of ITAT Rules has been discussed by the Hon'b!e jurisdictions! High Court in the case of Bamasi (B.R.) v. Commissioner of Income-tax reported in 83 ITR 223 as under, But even if the assesses had not made such a statement, the above judgment shows that the assesses would be entitled to raise a new ground, provided it is a ground of law and does not necessitate any other evidence to be recorded, the nature of which would not only be a defence to the appeal itself, but may also affect the validity of the entire assessment proceedings. If the ground succeeds, the only result would be that the appeal would fail. The acceptance of the ground would show that the entire assessment proceedings wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffice Expenses. It was claimed that some of the expenses incurred therein are for domestic activities and only expenditure amounting to ₹ 29,04,71,863/- is such that is to be taken as somehow attributable to exports to be taken as part direct expenses. A perusal of the details show that as far as the Head Office Expenses is concerned, the working thereof is correct and hence needed to be accepted. 30 However, the appellant company exported trading goods during the year that were procured from Hyderabad and Mumbai. At both the places the appellant company has branch offices apart from the head office being located in Mumbai. Though it was claimed that the job of procurement of trading goods exported are carried out from head office that is having separate procurement and export divisions, while the involvement of branch office at Mumbai can be ruled out with a specific office for the purpose located therein, in respect of the branch office at Hyderabad, the other place for procurement, the same cannot be accepted. Hence the expenditure incurred at Hyderabad branch office to the extent not directly related to domestic sales is also required to be taken as part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner (Appeals) in respect of bad debts written off. While deciding corresponding ground in ground 8 of assessee s appeal in ITA No.3092/Mum/2016 in the earlier part of the order, we have allowed assessee s claim of deduction. That being the case, this ground having become infructuous, is dismissed. 77. In ground 15, the revenue has challenged partial relief granted by learned Commissioner (Appeals) with regard to addition made under section 145A. While deciding corresponding ground, being ground 6 in assessee s appeal in ITA No.3092/Mum/2016 in the earlier part of the order, we have deleted the entire disallowance. That being the case, this ground having become infructuous, is dismissed. 78. In the result, appeal is partly allowed. ITA No.2072/Mum/2010 79. In this appeal, the revenue has challenged the deletion of penalty imposed under section 271(1)(c) of the Act. 80. Briefly the facts are, while completing the assessment for the impugned assessment year, the assessing officer made various additions and disallowances. Out of such additions/disallowances, the assessing officer initiated proceedings for imposition of penalty under section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, the transfer pricing adjustment was made on purely estimate basis. Thus, as rightly held by learned Commissioner (Appeals), such additions/disallowances, based on difference of opinion, cannot lead to the inference that assessee has either furnished inaccurate particulars of income or concealed its income so as to levy penalty under section 271(1)(c) of the Act. Further, it is a fact on record that while deciding the appeal arising out of the quantum proceeding, learned Commissioner (Appeals) has granted relief to the assessee in respect of the aforesaid additions/disallowances which further goes to prove that these are debatable issues. In any case of the matter, while deciding the quantum appeals of the assessee and the revenue in the earlier part of the order, we have deleted all the disallowances/additions based on which penalty under section 271(1)(c) of the Act was imposed. That being the case, the penalty order passed under section 271(1)(c) of the Act cannot survive. Accordingly, we uphold the decision of learned Commissioner (Appeals) on the issue by dismissing the grounds raised by the revenue. 83. In the result, appeal is dismissed. 84. To sum up, assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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