The DCIT, Circle-1(2), Baroda V. M/s. Liquid Control India (P) Ltd., Baroda

ITA 1100/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63058 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2004-2005
• Appeal Filed On: 09-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T SHANKAR
• Keywords: Depreciation; Wrong claim; Agreed addition; Onus to prove
• Section: 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD D BENCH BEFORE: SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARA T, JUDICIAL MEMBER THE DCIT, CIR, 1(2), BARODA (APPELLANT) VS. M/S LIQUID CONTROL INDIA P LTD 808, VCCI COMPLEX, GIDC MAKARPURA, BARODA(RESPONDENT) PAN NO. AAACL 3371J REVENUE BY : SRI T.SHANKAR SR. D.R. ASSESSEE BY : SRI SANJAY R. SHAH, A.R. DATE OF HEARING : 31-08-2012 DATE OF PRONOUNCEMENT : 25-10-2012 / ORDER PER : KUL BHARAT, JUDICIAL MEMBER:- THE REVENUE AND THE ASSESSEE HAS CHALLENGED THE OR DER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-I, BARODA DATE D 29-12-2009 BY A WAY OF AN APPEAL AND A CROSS OBJECTION. FIRST WE TAKE UP THE ITA NO. 1100/AHD/2010 OF THE R EVENUE 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APP EAL:- I.T.A. NO 1100/AHD/2010 A.Y.:-2004-05 & CROSS OBJECTION 125/AHD/2010 A.Y.2004-05 IN ITA NO. 1100/AHD/2010 A.Y. 2004-05 ITA NO. 1100/AHD/2010 A.Y. 2004-05 & CROSS OBJECT ION NO. 125/AHD/2010 PAGE THE DCIT VS. M/S LIQUID CONTROL INDIA P LTD. 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS. 14, 87,000/- LEVIED U/S. 271(1)(C) OF THE ACT ON THE ADDITIONS AMOUNTING TO RS. 41,43,669/-. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) ERRED IN APPRECIATING THE FACT THAT THE ADDITION OF RS. 28,108/- WAS ON ACCOUNT OF ADMISSION OF THE ASSESSEE DURING THE COU RSE OF ASSESSMENT PROCEEDINGS THAT IT HAD CLAIMED EXCESS DEPRECIATION ON MOULDS, JIGS AND DIES; AND THAT THE ASSESSEE WAS COMPELLED DURIN G THE ASSESSMENT PROCEEDINGS TO SURRENDER THE CLAIM OF THE DEDUCTION U/S. 80IB OF RS. 41,15,561/- FOR THE 11 TH YEAR WHICH WAS NOT PERMITTED AS PER LAW. IN VIEW OF THE DECISION IN THE CASE OF CIT VS. KERALA TRANSPORT CO. (2004) 134 TAXMAN 320 (KER), SURRENDER DOES NOT AVO ID PENALTY. RELIEF CLAIMED IN APPEAL IT IS PRAYED THAT THE ORDER OF THE CIT(A) BE SET A SIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE FACTS IN BRIEF ARE THAT THE CASE OF THE ASSE SSEE WAS SELECTED FOR SCRUTINY ASSESSMENT U/S 143(3) OF THE INCOME TAX AC T, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FINALIZED ON 28-11-2006 DETERMINING THE TOTAL INCOME AT RS. 1,32,67,720/-. WHILE DRAWING THE ASS ESSMENT ORDER, PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WAS ALSO INITI ATED ON THE FOLLOWING ADDITIONS:- (I). DISALLOWANCE OF DEPRECIATION ON MOULDS, JIGS A ND DIES RS. 28,108/- (II). DISALLOWANCE OF RS. 84,959/- OUT OF DEDUCTION U/S 80HHC. (II). DISALLOWANCE OF DEDUCTION U/S 80IB OF RS. 41, 15,561/- 4. ON APPEAL AGAINST QUANTUM BEFORE LD. CIT(A), TH E DISALLOWANCE IN RESPECT OF DEPRECIATION AND DEDUCTION U/S 80IB OF T HE ACT WAS CONFIRMED. THEREFORE, THE PENALTY WAS IMPOSED VIDE ORDER DATED 18-03-2009 ON THE AFORESAID ADDITION. THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A) ITA NO. 1100/AHD/2010 A.Y. 2004-05 & CROSS OBJECT ION NO. 125/AHD/2010 PAGE THE DCIT VS. M/S LIQUID CONTROL INDIA P LTD. 3 AGAINST IMPOSITION OF PENALTY WHO AFTER CONSIDERING THE SUBMISSIONS PARTLY ALLOWED THE APPEAL. 5. LD. D.R. SUBMITTED THAT THE LEVY OF PENALTY IS JUSTIFIED, HOWEVER, LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE PENALTY. HE SUBMITTED THAT THE ASSESSEE WITHDREW THE CLAIM FOR DEDUCTION U/S 80IB AND HIGHER DEPRECIATION WHEN IT WAS POINTED OUT BY THE ASSESSING OFFICER. HE SUBMITTED THAT IT IS NOT THE CASE OF BONA FIDE MISTAKE BUT ONLY WHEN IT WAS DETECTED BY THE ASSESSING OFFICER THAN THE ASSESSEE WITHDREW THE CLAIM AND OF FERED THE AMOUNT FOR TAXATION. HE SUBMITTED THAT THE ASSESSEE DELIBERAT ELY MADE WRONG CLAIM THEREBY, FURNISHED INACCURATE PARTICULARS OF INCOME . ON THE CONTRARY, LD. A.R. OF THE ASSESSEE SUBMITTED THAT THE ORDER OF LD . CIT(A) IS PERFECTLY ALRIGHT. HE ALSO MADE WRITTEN SUBMISSIONS THAT IS REPRODUCED AS UNDER:- DURING THE COURSE OF ABOVE APPEAL HEARING IN RESPE CT OF APPEAL FILED BY THE DEPARTMENT ON 31/08/2012, WE HAD DURING THE COURSE OF OUR ARGUMENTS RELIED ON SEVERAL DECISIONS TO SUPPORT TH E ORDER OF CIT(A) DELETING THE PENALTY IN RESPECT OF WHICH HON'BLE BE NCH WANTED US TO FILE THE COPIES OF THE DECISIONS AND ALSO TO DEMONS TRATE AS TO HOW THEY ARE RELEVANT TO THE FACTS OF OUR CASE. THEREFORE, WE ARE FILING HEREWITH THE COPIES OF THO SE DECISIONS ALONG WITH THE FOLLOWING, WHICH DEMONSTRATES AS TO HOW T HE RATIO OF THOSE DECISIONS ARE APPLICABLE TO THE FACTS OF THE CASE O F THE ASSESSEE, BESIDES RELYING UPON THE SUBMISSIONS MADE LO CIT(A), A COPY OF WHICH IS ATTACHED AT PAGE NOS. 1 TO 11 OF THE PAPER BOOK AND ALSO THE ORDER OF CIT(A) DELETING THE PENALTY. 1. C1T V/S JAYARAJ TALKIES - 239 ITR 914 (MAD.) RATIO: NOT EVERY CASE OF NON-DISCLOSURE WARRANTS IMPOSITIO N OF PENALTY AS THE ASSESSEE MAY FORGO A DEDUCTION OR OFFER HIGHER SUMS FOR TAXATION FOR A HUNDRED AND ONE DIFFERENT REASONS AND ALL OF THEM C ANNOT BE REGARDED AS REASONS WHICH ARE UNWORTHY OF ACCEPTANCE. MEREL Y BECAUSE ASSESSEE AGREES TO ADDITIONS TO HIS INCOME, IT DOES NOT FOLLOW THAT THE AMOUNT AGREED TO BE ADDED WAS CONCEALED INCOME. ITA NO. 1100/AHD/2010 A.Y. 2004-05 & CROSS OBJECT ION NO. 125/AHD/2010 PAGE THE DCIT VS. M/S LIQUID CONTROL INDIA P LTD. 4 RELEVANCE TO THE FORTH OF THE CASE: IN THE CASE OF ASSESSEE IT WAS POINTED OUT DURING T HE COURSE OF HEARING WITH REFERENCE TO PAGE NO, 26, 29 & 25 AND ALSO PAGES 53 & 54 AND IT CAN BE SEEN THAT THE ASSESSES HAD WITHDRAWN THE CLA IM FOR DEDUCTION U/S 8OIB ON ACCOUNT OF REALIZING THAT THERE WAS BON A FIDE MISTAKE IN PUTTING UP THE CLAIM PARTICULARLY WHEN IT WENT BY T HE DATE MENTIONED IN THE ELIGIBILITY CERTIFICATE ISSUED BY THE INDUST RIES COMMISSIONER AS 26-4-1994 AS THE DATE OF COMMERCIAL PRODUCTION AND ALSO BY THE YEAR 1994-95 MENTIONED AT PAGE 25 AS THE FINANCIAL YEAR WHEREBY THE CLAIM WAS FIRST CONSIDERED U/S 80IB. UNDER THESE FACTS, S UCH BONA FIDE MISTAKE CANNOT BE MADE LIABLE TO PENALTY PARTICULAR LY WHEN IMMEDIATELY THEREAFTER THE ASSESSEE HAD WITHDRAWN T HE CLAIM AND ALSO PAID ALL THE TAX AS PER THE DEMAND RAISED AS COULD BE SEEN FROM THE PAGE 36 OF THE PAPER BOOK. REFERENCE MAY ALSO BE M ADE TO PAGES 48 [PARA 2] AND 49 [PARA 8] STATING REASONS AS TO WHY CLAIMS MADE WERE DECIDED TO BE WITHDRAWN. 2. CIT V/S GEORGE BROS. - 160 ITR 511, 30 TAXMAN 368 (KERALA) RATIO: WHERE THE ASSESSEE FOR ONE REASON OR THE OTHER AGRE ES OR SURRENDERS CERTAIN AMOUNTS FOR ASSESSMENT, THE IMPOSITION OF P ENALTY SOLELY ON THE BASIS OF THE ASSESSEES SURRENDER WILL NOT BE W ELL FOUNDED. DEPENDING UPON THE FACTS AND CIRCUMSTANCES OF EACH CASE, THE COURT HAS TO DECIDE WHETHER PENALTY IS JUSTIFIED. IT IS F OR THE REVENUE TO BRING THE CASE UNDER THE AMBIT OF SECTION 271 (1) (C) BY ESTABLISHING THAT THERE IS CONCEALMENT ON THE PART OF THE ASSESSEE. T HE LEGAL FICTION CREATED BY EXPLANATION CAN BE DISPLACED IF THERE IS MATERIAL TO SHOW THAT THE FAILURE TO RETURN THE CORRECT INCOME DID N OT ARISE FROM ANY FRAUD OR GROSS OR WILLFUL NEGLECT ON THE PART OF TH E ASSESSEE. RELEVANCE TO THE FACTS OF THE CASE: IN THE FACTS OF THE CASE, THERE IS NO SUCH FINDING MADE BY THE LEARNED A.O. [WHO IS LEVYING PENALTY AND WHOSE SATISFACTION MATTERS], THAT THERE WAS LACK OF BONA FIDE OR THAT THE FACTS STATE D BY THE ASSESSEE ITA NO. 1100/AHD/2010 A.Y. 2004-05 & CROSS OBJECT ION NO. 125/AHD/2010 PAGE THE DCIT VS. M/S LIQUID CONTROL INDIA P LTD. 5 WERE UN-TRUE OR UN-SUBSTANTIAL OR THAT THERE WAS FR AUD OR GROSS OR WILLFUL NEGLECT ON THE PART OF THE ASSESSEE. 3. CIT V/S PUNJAB TYRES 162 ITR 517 (MP) RATIO:- IN THE CASES OF AGREED ADDITION TO THE TOTAL INCOME , THE DEPARTMENT HAS TO PROVE BY INDEPENDENT EVIDENCE IN ADDITION TO THE EVIDENCE ALREADY BROUGHT ON THE RECORD FROM VARIOUS SOURCES DURING T HE ASSESSMENT PROCEEDINGS THAT THE SAID AMOUNT REPRESENTED THE CO NCEALED INCOME OF THE ASSESSEE EARNED DURING THE RELEVANT ACCOUNTING YEAR. RELEVANCE OF THE FACTS OF THE CASE:- IN THE FACTS OF THE CASE, THERE IS NO SUCH ATTEMPT MADE BY THE LEARNED A.O. NOR IS THERE ANY INGREDIENT SHOWN TO COME TO A FINDING THAT ASSESSEE IS HIT BY THE EXPLANATION-1 TO SECTION 271 (L)(C). 4. CIT V/S BENGAL IRON GALVANISING WORKS - 165 ITR 249, 32 TAXMAN 19 (CAL) RATIO: IN THE INSTANT CASE, THE TRIBUNAL HAD HELD THAT THO UGH TECHNICALLY A DEFAULT-MIGHT HAVE BEEN COMMITTED BY THE ASSESSEE W ITHIN THE MEANING OF SECTION 271(L)(C), THE DEFAULT, IF ANY, WAS A TRIVIAL ONE AND THAT THE ASSESSEE BY MAKING A DISCLOSURE, BEFORE AS SESSMENT WAS TAKEN UP FURTHER, HAD ABSOLVED HIMSELF OF THE CHARGE OF N OT FILING A TRUE AND CORRECT RETURN OR FURNISHING INACCURATE PARTICULARS OF ITS INCOME IN ITS RETURN. THE TRIBUNAL WAS ENTITLED TO LOOK INTO THE ENTIRE F ACTS AND CIRCUMSTANCES IN ORDER TO DETERMINE WHETHER PENALTY SHOULD BE IMPOSED ON THE ASSESSEE OR NOT. IT IS SETTLED LAW T HAT BEFORE A PENALTY CAN BE IMPOSED IT HAS TO BE ESTABLISHED THAT THE AS SESSEE PROCEEDED DELIBERATELY WITH AN INTENTION TO CONCEAL HIS CORRE CT INCOME OR TO FURNISH INACCURATE PARTICULARS THEREOF. IN THE FAC TS OF THE PRESENT EASE, THE ASSESSES BY ITS SUBSEQUENT CONDUCT MIGHT BE SAID TO HAVE ESTABLISHED THAT THERE WAS NO DELIBERATE INTENTION ON ITS PART TO CONCEAL ITS INCOME AND THE INCORRECT RETURN, WHICH WAS INITIALLY FILED, WAS SOUGHT TO BE RECTIFIED BY ITS SUBSEQUENT DISCLO SURE, WHICH WAS ITA NO. 1100/AHD/2010 A.Y. 2004-05 & CROSS OBJECT ION NO. 125/AHD/2010 PAGE THE DCIT VS. M/S LIQUID CONTROL INDIA P LTD. 6 NOTED AND ACTED UPON, BY THE IT. II IS NOT MANDATOR Y UNDER SECTION 271, THAT A PENALTY MUST BE IMPOSED IN EVERY CASE. ONLY IF THE CONDITIONS LAID DOWN IN THE SAID SECTION ARE ESTABL ISHED THEN THE AUTHORITY CONCERNED 'MAY DIRECT THAT THE PERSON CO MMITTING THE DEFAULT WITHIN THE MEANING OF THE SAID SECTION PAY THE PENALTY IMPOSED. THEREFORE, THE TRIBUNAL, IN THE PRESENT CA SE, WAS RIGHT IN DELETING THE PENALTY IMPOSED UPON THE ASSESSEE. RELEVANCE TO THE FACTS OF THE CASE: IN THE FACTS OF THE CASE AS DEMONSTRATED IN POINT N O. L EARLIER, THE ASSESSEE HAS DISCHARGED IS BURDEN TO PROVE THE BONA FIDE CONDUCT AND ALSO WITHDRAWN ITS CLAIM IMMEDIATELY ON NOTICING TH AT THERE WAS A BONA FIDE MISTAKE COMMITTED BY IT AND ALSO FOLLOWED UP THE SAME BY MAKING IMMEDIATELY PAYMENT OF THE DEMAND RAISED, WH ICH DEMONSTRATE THE CONSISTENCY ON THE PART OF THE APPE LLANT EVEN BY SUBSEQUENT CONDUCT TO SHOW THAT THE MISTAKE WAS BON A FIDE. 5. NATIONAL TEXTILES V/S CIT - 249 ITR 125, 114 TAXMAN 203(GUJ) RATIO: IF THE CASE OF AN ASSESSES BY RECOURSE TO EXPLANATI ON-1 TO SECTION 271 (L)(C) FALLS IN THE DOMAIN OF FACTS UN-PROVED BUT N OT IN THE DOMAIN OF FACTS DISPROVED, PENALTY U/S 271 (1 )(C) CANNOT BE LEVIED. RELEVANCC_TO THE_FACTS OF THE CASE: IN THE FACTS OF THE PRESENT CASE, EVEN AFTER REFERR ING TO EXPLANATION-1 TO SECTION 27L(L)(C), THERE IS NO FINDING BY THE LE ARNED A.O. THAT THE EXPLANATION GIVEN BY THE ASSESSEE WERE UN-TRUE OR U NSUBSTANTIATED OR LACKS OF BONA FIDE, ON THE CONTRARY, ASSESSEE HAS D EMONSTRATED THAT IT HAS PROVED ITS BONA FIDE. EVEN IF IT IS CONSIDERED THAT THEY FALL IN THE DOMAIN OF FACTS UN-PROVED, [BUT NOT DISPROVED] APPL YING THE RATIO OF THIS BINDING JURISDICTIONAL HIGH COURT DECISION, PE NALTY CANNOT BE SUSTAINED IN THE FACTS OF THE PRESENT CASE. 6. SHIV LAL TAK V/S CIT 251 ITR 373, 121 TAXMAN 99 (RA J.) RATIO: ITA NO. 1100/AHD/2010 A.Y. 2004-05 & CROSS OBJECT ION NO. 125/AHD/2010 PAGE THE DCIT VS. M/S LIQUID CONTROL INDIA P LTD. 7 EXPLANATION-1 TO SECTION 271(1)(C) ONLY PROVIDES A RULE OF EVIDENCE FOR RAISING A REBUTTABLE PRESUMPTION IN FAVOUR OF T HE REVENUE AND DOES NO MORE. IT CAN BE REBUTTED BY LEADING NEW MATERIA L AS WELL AS THE EXISTING MATERIAL ON RECORD. THE PRESUMPTION IS NO T CARRIED TO HEIGHT OF A CONCLUSIVE PROOF. IT WAS NOT THE CASE IN THE PRESENT CONTEXT THAT THE ASSESSEE HAD OFFERED EXPLANATION WHICH HAD BEEN FOUND BY THE A.O. TO BE FALSE. IT WAS A CASE AND FINDINGS WERE ALSO TO THAT EFFECT THAT EXPLANATION WAS OFFERED BY THE ASSESSEE BUT HE HAD BEEN ABLE TO SUBSTANTIATE THE SAME. RELEVANCE TO THE FACTS OF THE CASE: IN THE FACTS OF OUR CASE, EVEN THE FINDING THAT ASS ESSEE HAS BEEN UNABLE TO SUBSTANTIATE THE CASE IS ALSO MISSING IN THE PEN ALTY ORDER. UNDER THE CIRCUMSTANCES, MORE OR LESS THE RATIO OF THE CASE I S THE SAME AS THE JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF N ATIONAL TEXTILES V/S CIT REFERRED ABOVE WHEREIN AT THE MOST FACTS REMAIN UN-PROVED BUT NOT DISPROVED. UNDER THE CIRCUMSTANCES, PENALTY U/S 27L(L)(C) CANNOT BE SUSTAINED. 7. GUJARAT CREDIT CORPORATION LIMITED V/S ACIT - 113 1TD 133 (AHMEDABAD SPECIAL BENCH) RATIO: FOLLOWING THE RATIO OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF SHIV LAL TAK - 251 ITR 373 REFERRED ABOVE, THE SPEC IAL BENCH HELD THAT IF THE EXPLANATION GIVEN WAS BONA FIDE AND ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION WERE DISCL OSED THE AMOUNT ADDED OR DISALLOWED IN THE COMPUTATION CANNOT BE CO NSIDERED AS CONCEALED INCOME WHEN THERE WAS NO FINDING THAT EXP LANATION OF THE ASSESSEE WAS UNTRUE OR LACKED BONA FIDE. RELEVANCE TO THE FACTS OF THE CASE IN THE FACTS OF THE PRESENT CASE THERE IS NO SUCH F INDING BY THE LEARNED A.O, AND HENCE SUCH PENALTY LEVIED BY LEARNED A.O. CANNOT BE SUSTAINED. DURING THE COURSE OF HEARING, WE HAD ALSO FILED A C OPY OF THE DECISION OF HON'BLE JURISDICTIONAL HIGH IN THE CASE OF CIT V /S HOTEL SABAR PVT. ITA NO. 1100/AHD/2010 A.Y. 2004-05 & CROSS OBJECT ION NO. 125/AHD/2010 PAGE THE DCIT VS. M/S LIQUID CONTROL INDIA P LTD. 8 LTD. REPORTED AT 264 ITR 381, WHEREIN THE WRONG CLA IM MADE BY THE ASSESSEE BY CLAIMING DEPRECIATION ON LAND, WHICH WA S WITHDRAWN AFTER THE ENQUIRY STARTED DURING THE ASSESSMENT PROCEEDIN GS WAS CONSIDERED AS A GENUINE MISTAKE AND THE ORDER OF THE TRIBUNAL DELETING THE PENALTY WAS UPHELD. THE ASSESSEE RESPECTFULLY SUBMITS THAT ITS CASE FAL LS IN THE RATIO OF ALL THE ABOVE DECISIONS AND THAT MISTAKE BEING BONA FID E DEMONSTRATED BY IT AND ALSO FOLLOWED UP WITH THE IMMEDIATE PAYMENT OF TAX AND PARTICULARLY WHEN THERE IS NO FINDING BY THE LEARNE D A.O. IN ITS PENALTY ORDER [AND WHICH FINDING HAS TO MATTER THE MOST FOR DECIDING THE ISSUE] THAT THE EXPLANATION OF THE ASSESSEE WAS UN- TRUE MALA FIDE, OR REMAINED UNSUBSTANTIATED, DELETION OF SUCH PENALTY BY CIT (A) MUST BE UPHELD IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. WE HAVE HEARD RIVAL SUBMISSIONS PERUSED THE MATE RIAL AVAILABLE ON RECORD AND THE JUDGMENTS CITED BY THE LD. AUTHORIZE D REPRESENTATIVE OF THE ASSESSEE. LD. CIT(A) DELETED PENALTY ON AMOUNT LEV IED ON THE DEPRECIATION HIGHER DEPRECIATION COLLECTED BY THE ASSESSEE AND A LSO CLAIM OF DEDUCTION U/S 80IB OF THE ACT ON THE BASIS THAT THE ASSESSEE HAS SUFFICIENT REASONS TO BELIEVE THAT IT IS ENTITLED FOR CLAIM U/S 80IB AND HIGHER DEPRECIATION. LD. CIT(A) HAS DEALT THIS ISSUE ELABORATELY IN PARA 4.7 TO 4.11 IN HIS ORDER. THE CONTENTION OF THE ASSESSEE IS THAT THE CLAIM OF HIG HER DEPRECIATION AND DEDUCTION 80IB OF THE ACT WAS MADE ON THE BASIS OF BONA FIDE BELIEF. HOWEVER, WHEN THE MISTAKE WAS REALIZED, THE CLAIM W AS WITHDRAWN BY THE ASSESSEE. HE SUBMITTED THAT IT IS NOT THE CASE THA T WHERE THE ASSESSEE HAS DELIBERATELY CLAIMED DEDUCTION AND HIGHER DEPRECIAT ION. HE SUBMITTED THAT IN VIEW OF THE JUDGMENT RELIED IN HIS WRITTEN SUBMI SSIONS AND ENCLOSED WITH WRITTEN SUBMISSIONS IT IS NOT THE CASE FOR IMPOSING PENALTY. 5.1 WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO ALL THE ASPECTS OF THE MATTER IT IS NOT DISPUTED THAT THE ASSESSEE HAS CLA IMED HIGHER DEPRECIATION AS WELL AS DEDUCTION U/S 80IB. THE EXPLANATION OF TH E ASSESSEE IS THAT ITA NO. 1100/AHD/2010 A.Y. 2004-05 & CROSS OBJECT ION NO. 125/AHD/2010 PAGE THE DCIT VS. M/S LIQUID CONTROL INDIA P LTD. 9 DEDUCTION U/S 80IB WAS MADE UNDER A BONA FIDE MISTA KE THAT THE COMMERCIAL PRODUCTION WAS STARTED ON 26-04-1994 A.Y. 1995-96 A ND FOR SUBSTANTIATING ITS CLAIM THE APPELLANT-ASSESSEE SUBMITTED THE CERT IFICATE ISSUED BY THE SALES TAX DEPARTMENT NOTIFYING THE COMMERCIAL PRODUCTION AS ON 26-04-1994. BUT FURTHER INQUIRY REVEALED THAT THE CORRECT DATE OF C OMMENCEMENT OF COMMERCIAL PRODUCTION WAS FIRST JULY, 1993. HE SUB MITTED THAT ON BOTH THE COUNTS THERE WAS A BONA FIDE MISTAKE AND WHEN IT CA ME TO NOTICE OF THE ASSESSEE, THE CLAIM WAS SUBSEQUENTLY WITHDRAWN. IT IS NOT DISPUTED THAT IT IS SETTLED POSITION OF LAW THAT PENALTY PROCEEDINGS AN D ASSESSMENT PROCEEDINGS ARE DISTINCT. WHERE ALL THE MATERIAL PARTICULARS R ELATING TO THE INCOME HAVE BEEN DISCLOSED BY THE ASSESSEE AND THE ASSESSEE HAS NOT FURNISHED INACCURATE PARTICULARS IT DOES NOT WARRANT LEVY OF PENALTY. T HE ISSUE IN THE PRESENT CASE, WHETHER THE ASSESSEE HAS MADE CLAIM OF HIGHER DEPRE CIATION AND DEDUCTION U/S 80IB OUT OF BONA FIDE MISTAKE HAS TO BE EXAMINE D IN THE LIGHT OF EXPLANATION OFFERED BY IT. THE ASSESSEE HAD DISC LOSED ALL THE FACTS BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEED INGS AND THE EXPLANATION OFFERED IN RESPECT OF CORRECT DATE OF COMMENCEMENT OF COMMERCIAL PRODUCTION IT IS SUBMITTED THAT THE CLAIM WAS MADE ON THE BASIS OF THE CERTIFICATE ISSUED BY THE SALES TAX AUTHORITY APPEA RS TO BE CORRECT SINCE THE SAID AUTHORITY NOTIFIED THIS DATE IN THE CERTIFICAT E DATED 08-08-1997, THIS FACT REMAINS UNREBUTTED SO ALSO WITH REGARD TO THE CLAI M OF HIGHER DEPRECATION ON MOULDS, JIGS AND DIES WERE MADE AS THOSE ITEMS ON THE BASIS THAT THESE ITEMS ARE SUBSTANTIALLY MADE OF PLASTIC, THEREFORE, THE DEPRECIATION OF 40 PERCENT WAS AVAILABLE, THIS ISSUE BEING DEBATABLE I N VIEW OF THE VARIOUS JUDICIAL PRONOUNCEMENTS AS RELIED BY THE ASSESSEE. THE EXPLANATION OFFERED BY THE ASSESSEE APPEARS TO BE PLAUSIBLE, THEREFORE, UNDER THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE WE DO NOT FIND AN Y INFIRMITY INTO THE ORDER ITA NO. 1100/AHD/2010 A.Y. 2004-05 & CROSS OBJECT ION NO. 125/AHD/2010 PAGE THE DCIT VS. M/S LIQUID CONTROL INDIA P LTD. 10 OF THE LD. CIT(A), HENCE, THE SAME IS HEREBY CONFI RMED. THIS GROUND OF THE REVENUES APPEAL IS REJECTED. NOW WE TAKE UP THE CROSS OBJECTION OF THE ASSESSEE 125/AHD/2010. 6. LD COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT H E DOES NOT WISH TO PRESS THE CROSS OBJECTION. HENCE, THE CROSS OBJECT ION IS TREATED AS NOT PRESSED. THE CROSS OBJECTION OF THE ASSESSEE IS D ISMISSED AS NOT PRESSED 7. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE AN D CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE. SD/- SD/- (A.K. GARODIA) (KUL BHARAT) ACCOUNTANT MEMBER JU DICIAL MEMBER AHMEDABAD : DATED 25 /10/2012 AK / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A)-III, BARODA 5. , ! , '# / DR, ITAT, AHMEDABAD 6. $% &' / GUARD FILE. BY ORDER/ , ( / ' ) ! , '# *