9911796707
TMI Blog2022 (10) TMI 937X X X X Extracts X X X X X X X X Extracts X X X X ..... ief facts of the case is that the assessee is a company engaged in the manufacturing various grades of zinc oxide. For the Assessment Year 2007-08, the assessee filed its Return of Income declaring total income of Rs. 23,12,60,710/-. Regular assessment u/s. 143(3) r.w.s. 92CA r.w.s. 144C of the Act was completed determining the total income as Rs. 27,06,13,861/- making addition of Rs. 1.34 Crore including 29.70 lakhs on account of upward adjustment; Rs. 2.51 Crores on account of notional sales tax and other additions. The A.O. also initiated penalty proceedings u/s. 271(1)(c) of the Act on the ground that the assessee in its Return of Income had claimed notional sales tax of Rs. 2.51 Crores as capital in nature, but the Assessing Officer he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceipt instead of capital receipt, Ld.CIT(A)-II, Baroda vide his order dated 27.01.2012 deleted the penalty levied. The issue before the present assessment year 2007-08 is identical in nature and covered in favour of the assessee and pleaded to delete the penalty levied. The Ld. CIT(A) after considering the facts of the case held that neither Explanation 1 to section 271(1)(c), nor the main section itself supported the AO in levying the penalty. That mere treatment of an amount as revenue (by the AO) instead of capital (by the taxpayer) does not make such disallowance/ addition a case of concealment u/s. 271(1)(c) of the Act and thereby deleted the penalty. 5. Aggrieved against the same, the Revenue is in appeal before us raising the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above extent. 6. The Ld. Sr. D.R. Shri Rakesh Jha appearing for the Revenue supported the order of the Assessing Officer and pleaded to confirm the levy of penalty u/s. 271(1)(c) of the Act. 6.1. Per contra the Ld. Counsel Ms. Amrin Pathan appearing for the assessee submitted before us a Paper Book containing various details including ITAT's order dated 17.02.2017 in ITA Nos. 665, 795/AHD/2012 on the quantum appeals wherein this Tribunal has held that the subsidy received by the assessee from Government as Revenue in nature. The Ld. Counsel further brought to our attention that as against that orders of the ITAT, the assessee is in appeal before the High Court of Gujarat wherein Tax Case Appeal No. 629 of 2017 was admitted on 23.08.2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... naccurate particulars of income, thereby levying penalty u/s. 271(1)(c) of the Act as held by the Hon'ble Supreme Court in the case of Reliance Petroproducts (P.) Ltd. as follows: A glance of provision of section 271(1) (c) would suggest that in order to be covered, 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 instant case was not the case of concealment of the income. That was not the case of the revenue either. It was an admitted position in the instant case that no information given in the return was found to be incorrect or inaccurate. It was not as if any statement made or any detail supplied was found to be factually ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t amount to furnishing of inaccurate particulars regarding the income of the assessee. Such claim made in the return cannot amount to the inaccurate particulars. [Para 9] The revenue contended that since the assessee had claimed excessive deductions knowing that they were incorrect, it amounted to concealment of income. It was argued that the falsehood in accounts can take either of the two forms: (i) an item of receipt may be suppressed fraudulently; (ii) an item of expenditure may be falsely (or in an exaggerated amount) claimed, and both types attempt to reduce the taxable income and, therefore, both types amount to concealment of particulars of one's income as well as furnishing of inaccurate particulars of income. Such contention ..... X X X X Extracts X X X X X X X X Extracts X X X X
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