DCIT, New Delhi V. M/s Minda Industries Ltd., New Delhi

ITA 1023/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4163 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2002-2003
• Appeal Filed On: 24-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MONGA
• Assessee Lawyers: R K KAPOOR
• Keywords: Business income
• Section: 143(3); 80HHC; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E DELHI BEFORE SHRI I.P.BANSAL AND SHRI K.G. BANSAL I.T.A. NO. 1023(DEL)/2011 ASSESSMENT YEAR: 2002-03 DEPUTY COMMISSIONER OF MINDA I NDUSTRIES LTD., INCOME-TAX, CIRCLE 6(1), VS. B-73, WAZIRPUR INDL. AREA, NEW DELHI. NEW DELHI. PAN-AAACM1152C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.K. MONGA, S R. DR RESPONDENT BY : SHR I R.K. KAPOOR, CA ORDER PER K.G. BANSAL : AM THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN ON 31.10.2002 DECLARING TOTAL INCOME OF RS. 2,87,51 ,590/-. ASSESSMENT UNDER SECTION 143(3) WAS MADE ON 28.2.2005 AT TOTAL INCOME OF RS. 3,14,11,240/-. IN PARTICULAR, A SUM OF RS. 21 ,37,500/- WAS DISALLOWED U/S 14A AND DEDUCTION U/S 80HHC CLAIMED BY THE ASSESSEE WAS REDUCED BY AN AMOUNT OF RS. 88,535/- ON ACCOUNT OF THE TR EATMENT OF INTEREST UNDER CLAUSE (BAA) OF THE EXPLANATION TO THE PROVISION . PENALTY PROCEEDINGS WERE ALSO INITIATED. THESE PROCEEDINGS WERE CO MPLETED ON 28.10.2009, BY LEVYING PENALTY OF RS. 8,49,639/-, BEING THE MINIMUM PENALTY LEVIABLE. THREE ISSUES WERE CONSIDERED FOR THE LEVY OF PENALTY, I.E., -(I) ITA NO. 1023(DEL)/2011 2 DISALLOWANCE U/S 14A; (II) SOFTWARE EXPENSES AN D (III) NON-GRANT OF DEDUCTION UNDER SECTION 80HHC IN RESPECT OF I NTEREST. THE MATTER WAS AGITATED IN APPEAL. THE LD. CIT(APPEALS) DELETED THE LEVY OF PENALTY BY HOLDING THAT LOOKING TO THE FACT THAT THE ISSUES INVOLVED ARE HIGHLY DEBATABLE, THE LEVY WAS NOT JUSTIFIED. THE RE VENUE, AGGRIEVED BY THIS ORDER, IS IN APPEAL BEFORE US. 2. WHILE THE LD. DR RELIED ON THE ORDER OF THE AO , THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THE LD. CIT( APPEALS). BRIEFLY, THE REASONS OF LEVY OF PENALTY ARE THAT THE LEVY I S CIVIL IN NATURE AND IT IS FOR THE ASSESSEE TO FURNISH EXPLANATION IN RESPECT O F ANY AMOUNT ADDED OR DISALLOWED IN COMPUTATION OF INCOME. THE POSITION OF LAW IS UNAMBIGUOUS AND, THEREFORE, THE ASSESSEE IS DEEMED TO HAV E FURNISHED INACCURATE PARTICULARS OF INCOME. THE REASONS FOR DELETING THE PENALTY ARE THAT THE ASSESSEE FURNISHED ALL THE FACTS REGARDING CLAI MS UNDER SECTION 80HHC AND DEDUCTION OF EXPENDITURE. THEREFORE, NO FAU LT CAN BE FOUND EVEN IF THE CLAIMS WERE NOT ULTIMATELY ACCEPTED EVEN BY THE APPELLATE AUTHORITY. 3. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. ON GOING THROUGH THE PENALTY ORDER, IT IS SEEN THAT NO CASE ITA NO. 1023(DEL)/2011 3 WHATSOEVER HAS BEEN MADE THAT ANY WRONG PARTIC ULAR WAS SUBMITTED BY THE ASSESSEE WHILE FILING THE RETURN OF INCOME. NO AMOUNT WAS DISALLOWED U/S 14A AND DEDUCTION WAS CLAIMED U/S 80HHC ON INTEREST, WHICH IS OTHERWISE TAXABLE UNDER THE RESIDUARY HEAD OF INCOME AND NOT AS BUSINESS INCOME. THESE ARE MERELY MATTERS OF CLAIMS. IN ABSENCE OF SHOWING THAT THERE WAS FALSITY OR INACCURACY IN THE PARTICULARS SUBMITTED BY THE ASSESSEE, IT CANNOT BE SAID THAT THE EXPLANATION OF THE ASSESSEE WAS NOT BONA FIDE. ACCORDINGLY, THE LEVY OF PENALTY WAS NOT JUSTIFIED. 4. IN THE RESULT, THE APPEAL IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 29 APRIL, 2011. SD/- SD/- (I.P. BANSAL) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29TH APRIL, 2011. SP SATIA COPY OF THE ORDER FORWARDED TO: 1. MINDA INDUSTRIES LTD., NEW DELHI. 2. DCIT, CIRCLE 6(1), NEW DELHI. 3. CIT(A) 4. CIT 5. THE DR, ITAT, NEW DELHI. ASSISTANT REGISTRAR.