ASREC INDIA LTD, MUMBAI V. ASST CIT RG 10(1), MUMBAI

ITA 1147/MUM/2012

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0206 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-12-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 17-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITTAL
• Keywords: Gift; Reasonable cause; Onus to prove; Revised return
• Section: 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A , BENCH MUMBAI BEFORE SHRI MAHAVIR SINGH , J M & SHRI G. MANJUNATHA , A M ITA NO. 1147/MUM/2012 ( ASSESSMENT YEAR : 2008 - 09 ) M/S. ASREC INDIA LTD., BUILDING NO. UNIT NO.201, GROUND FLOOR, SOLITAIRE, CORP. ANDHER I GHATKOPAR LINK ROAD, CHAKALA, ANDHERI (E), MUMBAI 400 093 VS. ASST. CIT RG 10(1), R.NO.405, AAYAKAR BHAVAN, MUMBAI 400 020 PAN/GIR NO. AAECA7990G APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI HIRO RAI AND SHRI DHARAN GANDHI R EVENUE BY SHRI RAJAT MITTAL DATE OF HEARING 27 / 07 /201 7 DATE OF PRONOUNCEME NT 18 / 08 /201 7 / O R D E R PER G.MANJUNATHA (A.M) : THIS IS AN APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSION ER OF INCOME TAX APP EALS 21, MUMBAI DATED 21/12/2011 AND IT PERTAINS TO THE ASSESSMENT YEAR 2008 - 09. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF ASSET RECONSTRUCTION COMPANY REGISTERED WITH THE RESERVE BANK OF INDIA TO CARRY O N THE BUSINESS OF ACQUIRING THE NPS. THE ASSESSEE HAS FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008 - 09 ON 26/09/2008 DECLARING TOTAL INCOME AT RS.3,57,92,500/ - . THE CASE WAS SELECTED FOR SCRUTINY AND ACCORDINGLY NOTICES U/S.143(2) DATED 06/08/20 09 AND 142(1) OF THE ACT DATED 15/01/2010 WERE ISSUED. MEANTIME, THE ITA NO. 1147/MUM/2012 M/S. ASREC INDIA LTD., 2 ASSESSEE HAS FILED REVISED RETURN ON 12/02/2010 DECLARING TOTAL INCOME AT RS.5,39,17,510/ - . THE ASSESSMENT WAS COMPLETED U/S.143(3) ON 06/12/2010 DETERMINING THE TOTAL INCOME OF RS.5,39 ,17,510/ - . 3. THEREAFTER, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) FOR THE REASON THAT ASSESSEE HAS CONCEALED PARTICULARS OF ITS INCOME AND FURNISHED INACCURATE PARTICULARS OF INCOME. THE AO INITIATED PENALTY PROCEEDINGS ON THE GRO UND THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS IN RESPECT OF PROVISION CREATED FOR IMPAIRMENT IN VALUE OF INVESTMENTS IN SECURITY RECEIPTS TO THE EXTENT OF RS.1,81,25,000/ - , HOWEVER, FILED REVISED RETURN WITHDRAWING PROVISION CREATED FOR IMPAIR MENT OF INVESTMENT IN SECURITY RECEIPTS AFTER ISSUE OF DETAILED QUESTIONNAIRE CALLING FOR SPECIFIC EXPLANATIONS IN RESPECT OF MAJOR EXPENSES DEBITED TO THE PROFIT AND LOSS ACCOUNT. THE AO FURTHER OBSERVED THAT THOUGH THE ASSESSEE HAS FILED REVISED RETURN W ITHDRAWING PROVISION CREATED FOR IMPAIRMENT IN INVESTMENT IN SECURITY RECEIPTS, THE REVISED RETURN HAS BEEN FILED AFTER DETECTION OF FURNISHING OF INACCURATE PARTICULARS OF ITS INCOME IN RESPECT OF RS.1,81,25,000/ - . THEREFORE , FILING OF REVISED RETURN CANN OT BE CONSIDERED AS VOLUNTARY. ACCORDINGLY, A SHOW - CAUSE NOTICE U/S.274 R.W.S. 271(1)(C) DATED 06/12/2010 WAS ISSUED TO THE ASSESSEE CALLING FOR ITS EXPLANATION. 4. IN RESPONSE TO SHOW - CAUSE NOTICE, THE ASSESSEE SUBMITTED THAT IT WAS ALREADY IN THE PROCES S OF FILING REVISED RETURN BEFORE ISSUE OF NOTICE U/S.143(2), WITHDRAWING PROVISION CREATED FOR IMPAIRMENT IN INVESTMENT IN ITA NO. 1147/MUM/2012 M/S. ASREC INDIA LTD., 3 SECURITY RECEIPTS , HOWEVER, D UE TO VARIOUS REASONS SUCH REVISED RETURN HAS BEEN FILED SUBSEQUENT TO ISSUE OF NOTICE U/S.142(1). THE ASSESSEE FURTHER SUBMITTED THAT IT HAS MADE A PROVISION FOR IMPAIRMENT IN INVESTMENT IN SECURITY RECEIPTS AS PER THE STATUTORY REQUIREMENT OF RBI GUIDELINES WHICH MANDATES MAKING PROVISIONS FOR IMPAIRMENT IN INVESTMENT IN SECURITY RECEIPTS. THE ASSESSEE FU RTHER SUBMITTED THAT IT HAS DISCLOSED NECESSARY DETAILS IN ITS FINANCIAL STATEMENTS IN THE FORM OF NOTES TO ACCOUNTS AND ALSO EXPLAINED THE NECESSITY OF MAKING PROVISIONS IN ITS BOOKS OF ACCOUNTS. THEREFORE, MAKING OF PROVISION TOWARDS IMPAIRMENT IN INVEST MENT IN SECURITY RECEIPTS IS A STATUTORY REQUIREMENT AND HENCE, THE PROVISION IS CREATED IN BOOKS OF ACCOUNTS WITH A DETAILED NOTE TO THE ACCOUNTS EXPLAINING SUCH REQUIREMENT. IT WAS FURTHER SUBMITTED THAT SUBSEQUENTLY ON DELIBERATIONS WITH TAX EXPERTS AND CONSULTANTS, WE CAME TO KNOW THAT PROVISION CREATED FOR IMPAIRMENT IN INVESTMENT IN SECURITY RECEIPTS IS NOT ALLOWABLE DEDUCTION AS PER THE PROVISIONS OF INCOME TAX ACT AND HENCE, THE REVISED RETURN HAS BEEN FILED WITHDRAWING SUCH PROVISION, THEREFORE, IT CANNOT BE CONSIDERED AS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 5 . THE AO AFTER CONSIDERING THE EXPLANATIONS OF THE ASSESSEE OBSERVED THAT THE ASSESSEE HAS FILED REVISED RETURN WITHDRAWING PROVISION CREATED FOR IMPAIRMENT IN INVESTMENT IN SECURITY RECEIPTS ONLY AFTER A SPECIFIC QUESTIONNAIRE WAS ISSUED FOR JUSTIFICATION OF MAJOR EXPENSES ALONGWITH DOCUMENTARY EVIDENCES. THE ASSESSEE HAS FILED REVISED RETURN AFTER ITA NO. 1147/MUM/2012 M/S. ASREC INDIA LTD., 4 RECEIVING THE QUESTIONNAIRE, THEREFORE, THE R EVISED RETURN FILED BY THE ASSESSEE CANNOT BE CONSIDERED AS VOLUNTARY. THE AO FURTHER OBSERVED THAT AS PER THE PROVISIONS OF SECTION 271(1)(C) EXPLANATION - 1, THE MOMENT THERE IS AN ENHANCEMENT OF RETURN INCOME, THERE COMES TO THE EXISTENCE A PRESUMPTION OF CONCEALMENT / FURNISHING INACCURATE PARTICULARS OF INCOME AND THE BURDEN OF THE PROOF LIES ON THE ASSESSEE TO EXPLAIN THE SAME. IT IS CLEAR FROM THE FACTS THAT THE ASSESSEE HAS FAILED TO PROVE THE BURDEN OF PROOF THEREFORE , BY RELIED UPON SUCH JUDICIA L PR ONOUNCEMENTS INCLUDING DECISION OF HONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSOR (2007) 212 CTR 432 HELD THAT THE ASSESSEE HAS KNOWINGLY FURNISHED INACCURATE PARTICULARS OF ITS INCOME WITHIN THE MEANING OF SECTION 271 (1)(C) OF THE IT ACT AND HENCE , LIABLE FOR PENALTY OF 100% OF THE TAX SOUGHT TO BE EVADED. ACCORDINGLY, LEVIED PENALTY OF RS.61,60,688/ - U/S. 271(1)(C) OF THE IT ACT. 6 . AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE PREFERR ED AN APPEAL BEFORE THE CIT(A). BE FORE THE CIT(A), THE ASSESSEE HAS REITERATED ITS SUBMISSION BEFORE THE AO. THE ASSESSEE FURTHER SUBMITTED THAT IT HAS DISCLOSED NECESSARY FACTS RELATING TO THE PROVISIONS CREATED FOR IMPAIRMENT IN INVESTMENT IN SECURITY RECEIPTS AND ALSO DISCLOSED NECESSIT Y OF CRE ATION OF SUCH PROVISION IN ITS BOOKS OF ACCOUNTS. THE ASSESSEE FURTHER SUBMITTED THAT AS PER THE PROVISIONS OF RBI GUIDELINES, THE ASSESSEE BEING AN ASSET - RECONSTRUCTION COMPANY REQUIRED TO MAKE PROVISION IN RESPECT OF ITS INVESTMENT IN SECURITY RE CEIPTS AS PER THE MARKET RATES AS ON THE BALANCE - ITA NO. 1147/MUM/2012 M/S. ASREC INDIA LTD., 5 SHEET DATA, AS PER THE VALUE DETERMINED BY THE RATING AGENCY APPROVED BY SEBI. THE ASSESSEE COMPANY HAS VALUED ITS SECURITY RECEIPTS FROM THE RATING AGENCY WHICH HAS ASSIGNED 75% VALUE ON THE SECURITY RECEIP TS AND ACCORDINGLY , IT HAS MADE A PROVISION FOR REMAINING AMOUNT IN ITS BOOKS OF ACCOUNTS BY CREATING PROVISION FOR IMPAIRMENT IN INVESTMENT IN SECURITY RECEIPTS. HOWEVER, AFTER DELIBERATIONS WITH ITS TAX EXPERTS AND CONSULTANTS , IT HAS C O ME TO THE CONCLUS ION THAT SUCH PROVISION CREATED IN RESPECT OF SECURITY RECEIPTS IS NOT DEDUCTABLE AS PER THE PROVISIONS OF INCOME TAX ACT 1961 AND HENCE, FILED REVISED RETURN WITHDRAWING PROVISION CREATED FOR IMPAIRMENT IN INVESTMENT IN SECURITY RECEIPTS. SINCE, IT HAS CR EATED PROVISION AS PER STATUTORY REQUIREMENT AND ALSO DISCLOSED SUCH PROVISION IN ITS FINANCIAL STATEMENTS BY WAY OF NOTES TO ACCOUNTS, IT CANNOT BE CONSIDERED THAT IT HAS FURNISHED INACCURATE PARTICULARS OF INCOME IN RESPECT OF PROVISION CREATED FOR IMPAI RMENT IN VALUE OF INVESTMENTS IN SECURITY RECEIPTS. THE CIT(A) AFTER CONSIDERING THE EXPLANATIONS OF THE ASSESSEE HELD THAT ON THE BASIS OF EXPLANATION FURNISHED BY THE ASSESSEE, IT IS DIFFICULT TO ACCEPT THAT SUCH CLAIM OF RS.1,81,25,000/ - TOWARDS PROVISI ON FOR IMPAIRMENT IN INVESTMENT IN SECURITY RECEIPTS WAS VOLUNTARILY OFFERED BY THE ASSESSEE IN THE REVISED RETURN OF INCOME. ON THE BASIS OF FACTS ON THE RECORD, IT APPEARS THAT SUCH REVISED RETURN WAS FILED BY THE ASSESSEE ONLY AS A CONSEQUENCE OF ASSESS MENT PROCEEDINGS. IN THE FACTS AND CIRCUMSTANCES, THE AO CORRECTLY HELD THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME THEREBY CONCEALING PARTICULARS OF SUCH ITA NO. 1147/MUM/2012 M/S. ASREC INDIA LTD., 6 INCOME. WITH THESE OBSERVATIONS AND ALSO RELIED UPON CERTAIN JUDICIAL PRECEDENTS UPH ELD THE PENALTY LEVIED BY THE AO U/S.271(1)(C) OF THE ACT. AGGRIEVED BY THE SAID APPELLATE ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 7. THE LEARNED AR FOR THE ASSESSEE SUBMITTED THAT THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS ) HAS ERRED IN CONFIRMIN G THE PENALTY LEVIED BY THE AO U/S. 271(1)(C) OF THE INCOME TAX ACT , 1961 DESPITE THE FACT THAT THE ASSESSEE HAS EXPLAINED THE REASONS FOR MAKING PROVISIONS IN THE BOOKS OF ACCOUNTS AND SUBSEQUENT FILING OF REVISED RETURN WITHDRAWING SUCH PROVISION CREATED IN THE BOOKS OF ACCOUNTS. THE LEARNED AR REFERRING TO THE FINANCIAL STATEMENTS OF THE ASSESSEE FOR THE RELEVANT FINANCIAL YEAR , SUBMITTED THAT THE ASSESSEE HAS DISCLOSED NECESSARY FACTS WITH REGARD TO PROVISIONS CREATED FOR IMPAIRMENT IN INVESTMENT IN SEC URITY RECEIPTS IN THE FORM OF NOTES TO ACCOUNTS AND ALSO EXPLAINED THE NECESSITY OF CREATION OF SUCH PROVISION IN ITS BOOKS OF ACCOUNTS. THE LEARNED AR REFERRING TO THE RBI GUIDELINES SUBMITTED THAT THE ASSESSEE COMPANY BEING AN ASSET RECONSTRUCTION COMPAN Y , AS PER THE GUIDELINES OF RBI, THE ASSESSEE HAS TO DISCLOSE ITS INVESTMENT IN SECURITY RECEIPTS AT THE END OF THE FINANCIAL YEAR AS PER THE RATING GIVEN BY RATING AGENCY REGISTERED WITH SEBI. THE ASSESSEE HAS VALUED ITS TWO SECURITY RECEIPTS FROM THE RAT ING AGENCY WHICH HAS SUGGESTED A PROVISION FOR TWO SECURITY RECEIPTS, ACCORDINGLY, IT HAS MADE A PROVISION OF RS.1,81,25,000/ - IN ITS BOOKS OF ACCOUNTS TO DISCLOSE NAV OF SECURITY RECEIPTS. THE LEARNED AR FURTHER ITA NO. 1147/MUM/2012 M/S. ASREC INDIA LTD., 7 SUBMITTED THAT SUCH PROVISION HAS BEEN WITH DRAWN AND FILED A REVISED RETURN BEFORE COMPLETION OF ASSESSMENT, THEREFORE, IT CANNOT BE HELD THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME. THE LEARNED AR FURTHER SUBMITTED THAT THE ASSESSEE HAS VOLUNTARILY FILED REVISED RETURN WIT HDRAWING PROVISION CREATED FOR IMPAIRMENT IN INVESTMENT IN SECURITY RECEIPTS BEFORE THE COMPLETION OF ASSESSMENT. SINCE, IT HAS CREATED PROVISION IN RESPECT OF INVESTMENT IN SECURITY RECEIPTS AS PER THE STATUTORY REQUIREMENT AND ALSO DISCLOSED SUCH PROVISI ON IN ITS BOOKS OF ACCOUNTS, IT CANNOT BE HELD THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME IN RESPECT OF PROVISION CREATED FOR IMPAIRMENT IN INVESTMENT IN SECURITY RECEIPTS. THE LEARNED AR FURTHER SUBMITTED THAT THE ASSESSEE HAS FI LED REVISED RETURN AND ALSO EXPLAINED THE REASONS FOR FILING REVISED RETURN WITHDRAWING PROVISIONS CREATED FOR IMPAIRMENT IN INVESTMENT IN SECURITY RECEIPTS BEFORE THE COMPLETION OF ASSESSMENT, THEREFORE, THE ASSESSEE CASE CANNOT BE CONSIDERED AS DELIBERAT E CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME WHICH WARRANTS OF LEVY OF PENALTY U/S.271(1)(C) OF THE ACT . I N SUPPORT OF HIS ARGUMENTS RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD., (2010) 322 ITR 158 SC, AND ALSO CIT VS. HARNARAYAN 67 DTR 0172 AND CIT VS. SHRIRAM PROPERTIES AND CONSTRUCTIONS LTD., (2013)356 ITR 700(MAD.). 8. ON THE OTHER HAND, LEARNED DR DIRECTLY SUPPORTING THE ORDER OF THE CIT(A) , SUBMITTED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS ITA NO. 1147/MUM/2012 M/S. ASREC INDIA LTD., 8 OF ITS INCOME IN RESPECT OF PROVISION CREATED FOR IMPAIRMENT IN INVESTMENT IN SECURITY RECEIPTS, EVEN THOUGH SUCH P ROVISION IS NOT ALLOWABLE AS DETE CTION U NDER THE PROVISION OF INCOME TAX ACT 1961. TH E LEARNED DR FURTHER SUBMITTED THAT THOUGH THE ASSESSEE HAS FILED REVISED RETURN WITHDRAWING PROVISION CREATED FOR IMPAIRMENT IN INVESTMENT IN SECURITY RECEIPTS SUCH FILING OF REVISED RETURN IS ON ACCOUNT OF OBSERVATIONS MADE BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDI NGS IN RESPECT OF MAJOR EXPENSES DEBITED IN THE PROFIT AND LOSS ACCOUNT. THE AO HAS ISSUED A NOTICE U/S.142(1) CALLING FOR DETAILS IN RESPECT OF MAJOR EXPENSES DEBITED IN THE PROFIT AND LOSS ACCOUNT ALONGWITH DOCUMENTARY EVIDENCES AND A SSESSEE HAS FILED REVISED RETURN AFTER ISSUE OF NOTICE BY THE AO. THEREFORE, FILING A REVISED RETURN CANNOT BE CONSIDERED AS VOLUNTARY. THE ASSESSEE HAS DELIBERATELY FURNISHED INACCURATE PARTICULARS WITHIN THE MEANING OF SECTION 271(1)(C) WHICH ATTRACTS PE NALTY AND HENCE, THE AO HAS RIGHTLY LEVIED PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME AND HIS ORDER SHOULD BE UPHELD. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIE S BELOW. THE AO LEVIED PENALTY U/S.271(1)(C) FOR THE REASONS THAT THE ASSESSEE HAS WILLFULLY FURNISHED INACCURATE PARTICULARS IN RESPECT OF PROVISION CREATED FOR IMPAIRMENT IN VALUE OF INVESTMENT IN SECURITY RECEIPTS , EVEN THOUGH SUCH P ROVISION IS NOT ALLO WABLE AS DETE CTION UNDER THE PROVISIONS OF INCOME TAX ACT 1961. THE AO FURTHER OBSERVED THAT THE ASSESSEE HAS FILED REVISED ITA NO. 1147/MUM/2012 M/S. ASREC INDIA LTD., 9 RETURN AFTER DETE CTION OF PROVISION CREATED IN RESPECT OF IMPAIRMENT IN VALUE OF INVESTMENT , THEREFORE, SUCH REVISED RETURN CANNOT B E CONSIDERED AS VOLUNTARY. THE AO FURTHER OBSERVED THAT A SPECIFIC QUESTIONNAIRE WAS ISSUED IN RESPECT OF MAJOR EXPENSES AND ALSO CALLED FOR NECESSARY DOCUMENTARY EVIDENCE JUSTIFYING EXPENSES IN THE PROFIT AND LOSS ACCOUNT. THE A SSESSEE HAS FILED REVISED R ETURN WITHDRAWING PROVISION CREATED FOR IMPAIRMENT IN VALUE OF INVESTMENT AFTER ISSUE OF NOTICE U/S. 142(1). ACCORDING TO THE AO, THE MOMENT THERE IS AN ENHANCEMENT OF RETURN INCOME THERE COMES TO AN EXISTENCE A PRESUMPTION OF CONCEALMENT / FURNISHING OF I NACCURATE PARTICULARS OF INCOME AND THE BURDEN OF PROOF LIES ON THE ASSESSEE TO EXPLAIN THE SAME. IT IS CLEAR FROM THE FACTS THAT THE ASSESSEE HAS FAILED TO PROVE THE BURDEN OF PROOF IN RESPECT OF PROVISIONS CREATED FOR IMPAIRMENT IN VALUE OF INVESTMENT IN SECURITY RECEIPTS AND HENCE OPINED THAT ASSESSEE HAS DELIBERATELY F URNISHED INACCURATE PARTICULARS, WHICH COMES WITHIN THE PUR VIEW OF SECTION 271(1)(C) OF THE ACT. 10. IT IS THE CLAIM OF THE ASSESSEE THAT IT HAS CREATED PROVISION IN RESPECT OF IMPAIRMEN T IN VALUE OF INVESTMENT IN SECURITY RECEIPTS AS PER THE REQUIREMENT OF RBI GUIDELINES , WHICH SUGGEST SUITABLE PROVISION IS REQUIRED TO BE MADE IN RESPECT OF INVESTMENT IN SECURITY RECEIPTS AFTER OBTAINING A RATING FROM RATING AGENCY APPROVED BY SEBI. THE ASSESSEE FURTHER CONTENDED THAT IT HAS DISCLOSED THE REASONS FOR CREATION OF PROVISION IN RESPECT OF INVESTMENTS IN ITS FINANCIAL STATEMENTS BY WAY OF ITA NO. 1147/MUM/2012 M/S. ASREC INDIA LTD., 10 NOTES TO ACCOUNTS. THE ASSESSEE FURT HER CONTENDED THAT THE ASSESSEE BEING AN ASSET RECONSTRUCTION COMPANY , AS PER THE GUIDELINES ISSUED BY RBI, THE NAV OF THE SECURITY RECEIPTS SHOULD BE RESTRICTED TO RECOVERY RANGE ASSOCIATED WITH THE RATING ASSIGNED TO SECURITY RECEIPTS. SECURITIZATION / RECONSTRUCTION COMPANY BASED ON ITS RECOVERY EXPERIENCE TO CHOOSE A PA RTICULAR PERCENTAGE WITHIN THE RECOVERY RANGE INDICATED BY THE RATE AGENCY TO MAKE A PROVISION IN ITS BOOKS OF ACCOUNTS. AS PER THE GUIDELINES OF RBI, THE ASSESSEE HAS TAKEN A REPORT FROM THE RATING AGENCY WHICH HAS SUGGESTED A PROVISION OF RS.1,81,25,000/ - IN RESPECT OF TWO SECURITY RECEIPTS AND ACCORDINGLY IT HAS MADE A PROVISION IN ITS BOOKS OF ACCOUNTS. ASSESSEE FURTHER CONTENDED THAT IT HAS MADE A PROVISION IN ITS BOOKS OF ACCOUNTS AS PER THE REQUIREMENT OF RBI GUIDELINES, HOWEVER, AFTER DELIBERATIONS WITH ITS TAX EXPERTS AND CONSULTANTS HAS FILED REVISED RETURN WITHDRAWING PROVISION CREATED FOR IMPAIRMENT IN VALUE OF INVESTMENT IN SECURITY RECEIPTS BEFORE COMPLETION OF ASSESSMENT BY THE AO. THEREFORE, THE AO WAS INCORRECT IN HOLDING THAT ASSESSEE HAS D ELIBERATELY FURNISHED INACCURATE PARTICULARS WHICH ATTRACTS PENALTY U/S.271(1)(C) OF THE ACT. 11 . THE ONLY ISSUE WHICH ARISES FOR OUR CONSIDERATION IS WHETHER THERE IS FURNISHING OF INACCURATE PARTICULARS OF INCOME WHICH ATTRACTS PENALTY U/S.271(1)(C) OF THE ACT. BEFORE WE GO INTO THE MERITS OF THE CASE, LET US UNDERSTAND THE POSITION OF LAW AS ENUMERATED U/S. 271(1)(C) OF THE ACT. SECTION 271 (1)(C) OF THE ACT PROVIDES OF LEVY OF PENALTY IN A CASE WHERE ITA NO. 1147/MUM/2012 M/S. ASREC INDIA LTD., 11 AO OR CIT(A) IS SATISFIED THAT THE PERSON HAS CONCEA LED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME, SUCH PERSON MAY BE DIRECTED TO PAY PENALTY OF A SUM EQUAL TO NOT LESS THAN 100% AND NOT MORE THAN 300% OF TAX SOUGHT TO BE EVADED. THE CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME SHOULD BE REFERRED TO RETURN OF INCOME, BOOKS OF ACCOUNTS AND OTHER DOCUMENTS AVAILABLE WITH THE AUTHORITIES AT THE TIME OF PROCEEDINGS UNDER THIS ACT. IN THE PRESENT CASE, ADMITTEDLY ASSESSEE HAS MADE A PROVISION IN RESPEC T OF INVESTMENTS IN SECURITY RECEIPTS AND ALSO DISCLOSED NECESSITY OF CREATION OF PROVISION IN RESPECT OF SECURITY RECEIPTS IN ITS FINANCIAL STATEMENTS BY WAY OF NOTES TO ACCOUNTS. ACCORDING TO THE ASSESSEE, IT HAS CREATED PROVISION IN RESPECT OF IMPAIRMEN T IN VALUE OF INVESTMENT IN SECURITY RECEIPTS AS PER THE GUIDELINES OF RBI WHICH MANDATES CREATION OF PROVISION AT THE END OF THE FINANCIAL YEAR AS PER THE RATING GIVEN BY THE RATING AGENCY APPROVED BY SEBI. WE FIND THAT THE RBI GUIDELINES MANDATES V ALU ATI ON OF SECURITY RECEIPTS AT THE END OF THE FINANCIAL YEAR FROM A RATING AGENCY APPROVED BY THE SEBI. WE FURTHER OBSERVED THAT THE ASSESSEE HAS TAKEN A RATING ON ITS TWO SECURITY RECEIPTS FROM THE RATING AGENCY WHICH HAS SUGGESTED A PROVISION OF RS.1,81,25,0 00/ - AND ACCORDINGLY THE ASSESSEE HAS MADE A PROVISION IN ITS BOOKS OF ACCOUNTS. WE FURTHER OBSERVED THAT THE ASSESSEE HAS FULLY DISCLOSED ALL THE DETAILS IN ITS FINANCIAL STATEMENTS IN THE FORM OF NOTES TO ACCOUN TS. T HEREFORE, WE ARE OF THE CONSIDERED VIE W THAT THE AO WAS ERRED IN HOLDING THAT THE ASSESSEE ITA NO. 1147/MUM/2012 M/S. ASREC INDIA LTD., 12 HAS WILLFULLY FURNISHED INACCURATE PARTICULARS OF INCOME TO EVADE PAYMENT OF TAXES WHICH WARRANTS LEVY OF PENALTY U/S.271(1)(C) OF THE ACT. 12 . THE QUESTION WHETHER THERE WAS A REASONABLE CAUSE FOR WHICH THE REQUIREMENT OF CONCERNED PROVISIONS OF SECTION CANNOT BE COMPLIED WITH IS PRIMARILY AN ESSENTIAL QUESTION OF FACT AND IT HAS TO BE DECIDED IN EACH CASE AFTER CONSIDERING THE MATERIAL PLACED BEFORE THE CONCERNED AUTHORITY. THE LEVY OF PENALTY U/S. 271( 1)(C) OF THE ACT IS NOT AUTOMATIC. BEFORE LEVY OF PENALTY , THE CONCERNED OFFICER IS REQUIRED TO FIND OUT THAT ANY VIOLATION REFERRED TO IN THE SAID PROVISION IS WITHOUT A REASONABLE CAUSE. THE INITIAL BURDEN IS ON THE ASSESSEE TO SHOW THAT THERE EXISTS A R EASONABLE CAUSE WHICH WAS THE REASON FOR THE FAILURE REFERRED TO IN THE CONCERNED PROVISIONS OF THE ACT. THEREFORE, THE ASSESSING OFFICER DEALING WITH THE MATTER HA S TO CONSIDER WHETHER THE EXPLANATIONS OFFERED BY THE ASSESSEE OR THE PERSON AS A CASE MAY B E IS REASONABLE AND AS REGARDS THE REASON WAS ON ACCOUNT OF REASONABLE CAUSE. I N THE PRESENT CASE ON HAND , ON PERUSAL OF THE FACTS AVAILABLE ON RECORD, WE FIND THAT THE ASSESSEE HAS CREATED PROVISIONS IN RESPECT OF VALUE IN INVESTMENT IN SECURITY RECEIPTS AS PER THE STATUTORY REQUIREMENT OF RBI GUIDELINES. THE ASSESSEE BEING AN ASSET RECONSTRUCTION COMPANY REGISTERED WITH RBI IS REQUIRED TO VALUE ITS SECURITY RECEIPTS. ACCORDINGLY, IT HAS MADE A PROVISION IN ITS BOOKS OF ACCOUNTS TOWARDS NAV OF SECURITY RE CEIPTS AT THE END OF THE FINANCIAL YEAR AS PER THE RATING GIVEN BY THE RATING AGENCY. HOWEVER, THE ASSESSEE HAS FILED A REVISED RETURN WITHDRAWING PROVISION CREATED IN RESPECT OF ITA NO. 1147/MUM/2012 M/S. ASREC INDIA LTD., 13 IMPAIRMENT IN VALUE OF INVESTMENT IN SECURITY RECEIPTS BEFORE COMPLETION OF A SSESSMENT BY THE ASSESSING OFFICER. THOUGH THE ASSESSEE HAS FILED REVISED RETURN WITHDRAWING PROVISION CREATED FOR IMPAIRMENT IN VALUE OF INVESTMENT IN SECURITY RECEIPTS, AO WAS OF THE OPINION THAT THE ASSESSEE HAS FILED REVISED RETURN AFTER A SPECIFIC QUE STION WAS ASKED TO JUSTIFY THE EXPENDITURE DEBITED IN THE PROFIT AND LOSS ACCOUNT. WE DO NOT FIND MERIT IN THE FINDINGS OF THE AO FOR THE REASON THAT THE ASSESSEE HAS FILED REVISED RETURN ALTHOUGH AFTER ISSUE OF NOTICE U/S.142(1), BUT MUCH BEFORE THE DATE OF COMPLETION OF ASSESSMENT, THEREFORE, THE AO CANNOT HOLD THAT THE ASSESSEE HAS FILED REVISED RETURN ONLY AFTER ISSUE OF NOTICE U/S.142(1) OF THE IT ACT 1961. WE FURTHER, OBSERVE THAT MERE MAKING A CLAIM IN RESPECT OF CERTAIN EXPENDITURE AND DISALLOWANCE OF SUCH EXPENDITURE BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDI NGS CANNOT BE CALLED AS FURNISHING OF INACCURATE PARTICULARS OF INCOME IN RESPECT OF SUCH INCOME. MORE SO, WHEN ASSESSEE HAS FILED REVISED RETURN VOLUNTARILY BEFORE COMPLETION OF ASSESSM ENT WITHDRAWING SUCH PROVISION CREATED / EXPENDITURE DEBITED IN THE PROFIT AND LOSS ACCOUNT. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE AO WAS INCORRECT IN COMING TO THE CONCLUSION THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME WHICH WARRANTS LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. 1 3 . IT IS PERTINENT TO DISCUSS THE CASE LAW RELIED UPON BY THE ASSESSEE. ASSESSEE HAS RELIED UPON DECISION OF HONBLE SUPREME COURT , IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD., (2010) 322 ITR 158 SC . T HE ITA NO. 1147/MUM/2012 M/S. ASREC INDIA LTD., 14 HONBLE SUPREME COURT , WHILE DELETING THE PENALTY U/S. 271(1)(C) OF THE ACT , HELD THAT MERE MAKING A CLAIM DOES NOT SUSTAINABLE IN LAW BY ITS ELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME. THE RELEVANT PORTION OF T HE ORDER REPRODUCED HEREUNDER: - A GLANCE OF PROVISION OF SECTION 27J(])(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 PARTI CULARS 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 INACCURA TE. IT WAS NOT AS IF ANY STATEMENT MADE OR ANY DETAIL SUPPLIED WAS FOUND TO BE FACTUALLY INCORRECT. HENCE, AT LEAST, PRIMA FACIE, THE ASSESSEE COULD NOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. THE REVENUE ARGUED THAT SUBMITTING AN INCORRECT CL AIM IN LAW FOR THE EXPENDITURE ON INTEREST WOULD AMOUNT TO GIVING INACCURATE PARTICULARS OF SUCH INCOME. SUCH CANNOT BE THE INTERPRETATION OF THE CONCERNED WORDS. THE WORDS ARE PLAIN AND SIMPLE. IN ORDER TO EXPOSE THE ASSESSEE TO THE PENALTY UNLESS THE CAS E IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY ANY STRETCH OF IMAGINATION, MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS. [PARA 7] THEREFORE, IT MUST BE SHOWN THAT THE CONDI TIONS UNDER SECTION 271(L)(C ) EXIST BEFORE THE PENALTY IS IMPOSED. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED, BECAUSE THAT IS THE ONLY DOCUMENT, WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTI CULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE'. [PARA 8] THE WORD 'PARTICULARS' MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. IN THE INSTANT CASE, THERE WAS NO FINDING THAT ANY DETAILS SUPPLIED BY (HE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. SUCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER SECTION 27L(L)(C). A MERE MAKING OF THE CLAIM, WHICH IS N OT SUSTAINABLE IN LAW BY ITSELF WILL NOT 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 ITA NO. 1147/MUM/2012 M/S. ASREC INDIA LTD., 15 FURNISHING OF INACCURATE PARTICULARS OF INC OME. SUCH CONTENTION COULD NOT BE ACCEPTED AS THE ASSESSEE HAD FURNISHED ALL THE DETAILS OF ITS EXPENDITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, IN THEMSELVES, WERE NOT FOUND TO BE INACCURATE NOR COULD BE VIEWED AS THE CONCEALMENT OF INCOME ON I TS PART. IT WAS UP TO THE AUTHORITIES TO CLAIM IN THE RETURN OR NOT. MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT, BY ITSELF WOULD NOT ATTRACT THE PENALTY UNDER SECTION 27 (1)(C). IF THE CONTENTION OF THE REVENUE WAS ACCEPTED, THEN IN CASE OF EVERY RETURN WHERE THE CLAIM WADE WAS NOT ACCEPTED BY THE ASSESSING OFFICER FOR ANY REASON, THE ASSESSEE WOULD INVITE PENALTY UNDER SECTION 27I(L)(C). THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE.[PARA 10]. 14 . THE ASSESSEE HAS RELIED UPON THE DECISION OF HONBLE HIGH COURT OF MADRAS IN THE CASE OF CIT VS. SHRIRAM PROPERTIES AND CONSTRUCTIONS LTD., (2013)356 ITR 700(MAD.). THE HONBLE HIGH COURT , WHILE DELETING THE PENALTY LEVI ED U/S. 271(1)(C) , HELD THAT THERE WAS NO LACKING IN BONAFIDES IN THE CLAIM OF THE ASSESSEE ORIGINALLY MADE, NO PENALTY COULD BE LEVIED. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED BELOW: - THE ASSESSEE, FOR THE ASSESSMENT YEAR 2007 - 08, CLAIMED DEDUCTI ON IN RESPECT OF THE CONTRIBUTION MADE TO THE TRUST FUND AND PROVISIONS FOR DIMINU TION IN VALUE OF INVESTMENTS AND SUNDRY BALANCES WRITTEN OFF. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, IT FILED A REVISED MEMO OF COMPUTATION. THE ASSESSING OFFICER LEVI ED PENALTY UNDER SECTION 271(L)(C) OF THE INCOME - TAX ACT, 1961, HOLDING THAT THE ASSESSEE HAD NOT FILED A REVISED RETURN TO OFFER THE AMOUNT AS INCOME FOR THE PURPOSE OF ASSESSMENT. THE COMMISSIONER (APPEALS) POINTED OUT THAT THE ASSESSEE EXPLAINED THE CIR CUMSTANCES UNDER WHICH IT MADE ITS CLAIM AND SUBSEQUENTLY OFFERED THE AMOUNT FOR ASSESSMENT FOR AVOIDING PROTRACTED LITIGATION AND BUYING PEACE WITH THE DEPARTMENT. HE ALSO POINTED OUT THAT THE QUERY RAISED BY THE ASSESSING OFFICER, EXTRACTED IN THE LETTER DATED DECEMBER 11, 2009, REVEALED THE DOUBT IN THE MIND OF THE ASSESSING OFFICER AS TO WHETHER THE EXPENDITURE WAS ALLOWABLE ONE OR NOT. HOWEVER, THE ASSESSEE FILED A LETTER OFFERING THE EXPENDITURE AS INCOME, WHICH, BY ITSELF, WOULD NOT MAKE THIS A CASE OF CONCEALMENT: THE DECLARATION OF THE ENHANCED INCOME THUS BELIED THE CLAIM OF THE ASSESSING OFFICER THAT THERE WAS CONCEALMENT. THUS, HE DELETED THE PENALTY. THE TRIBUNAL HELD THAT MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, WHICH WAS NOT AC CEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT ATTRACT THE LEVY OF PENALTY UNDER SECTION 271(L)(C). ON APPEAL: ITA NO. 1147/MUM/2012 M/S. ASREC INDIA LTD., 16 HELD, DISMISSING THE APPEAL, THAT WHEN THE TRIBUNAL HAD COME TO A FACTUAL FINDING THAT THERE W AS NO LACKING IN BONA FIDES IN THE CLAIM OF THE ASSESSEE ORIGINAL!]/ MADE, NO PENALTY COULD BE LEVIED. 15 . THE ASSE SSEE RELIED UPON THE DECISION OF THE HONBLE HIGH COURT OF DELHI , IN CASE OF CIT VS. HARNARAYAN 67 DTR 0172. THE HONBLE HIGH COURT , WHILE DELETING PENALTY U/S. 271(1)(C) OBSERVED THAT TH E AO HAVING INCLUDED THE AMOUNT OF GIFTS IN THE TOTAL INCOME OF THE ASSESSEE MERELY ON THE BASIS OF ASSESSEES DECLARATION WITHOUT POINTING OUT OR REFERRING TO ANY EVIDENCE OR MATERIAL TO SHOW THAT THE GIFT RECEIVED BY THE ASSESSEE WAS BOGUS OR SHAM AND TH ERE BEING ANY ALLEGATION THAT THE ASSESSEE HAS OFFERED THE AMOUNT AFTER A DETECTION OF ANY INCRIMINATING MATERIAL BY THE DEPARTMENT. SURRENDER OF THE AMOUNT BY THE ASSESSEE WAS VOLUNTARY AND THEREFORE, PENALTY U/S. 271(1)(C) WAS NOT LEVIABLE. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED BELOW: - THE AO INCLUDED THE AMOUNT OF GIFT IN THE TOTAL INCOME OF THE ASSESSES MERELY ON THE BASIS OF THE ASSESSEE'S DECLARATION. A/SO, THE AO DID NOT POINT OUT OR REFER TO ANY EVIDENCE OR MATERIAL TO SHOW AND ESTABLISH T HAT THE GIFT RECEIVED BY THE ASSESSEE WAS EITHER BOGUS OR SHAM. ADMITTEDLY, THE ASSESSEE HAD OFFERED THE GIFT FOR TAXATION VOLUNTARILY AND IT WAS NOT THE CASE OF THE REVENUE THAT THE SAME WAS DONE AFTER ITS DETECTION BY THE DEPARTMENT FURTHER, IT WAS ALSO NOT THE CASE OF THE REVENUE THAT MATERIAL WAS FOUND DURING THE SEARCH INDICATING THAT THE GIFT TRANSACTION WAS AN ARRANGED AFFAIR TO ACCOMMODATE THE ASSESSEE'S UNACCOUNTED MONEY. IN THIS RESPECT IT IS EVIDENT THAT THE TRIBUNAL CORRECTLY CAME TO THE CONCLUS ION THAT THE AO DID NOT POSSESS ANY PIECE OF INFORMATION THAT THE GIFT WAS NOT GENUINE AND WAS PART OF THE UNDISCLOSED INCOME OF THE ASSESSEE. IN THE QUESTIONNAIRE DT. 10TH OCT., 2005 THE AO HAD J' SIMPLY RAISED A QUERY FOR THE RELEVANT ASSESSMENT YEAR IN THE FOLLOWING MANNE R ; 'HAD YOU 1 TAKEN/GIVEN ANY LOAN/GIFT DURING THE FINANCIAL YEAR UNDER CONSIDERATION? IF YES, PLEASE FURNISH DETAILS'. IN RESPONSE TO THIS QUERY THE ASSESSEE HAD FURNISHED THE DETAILS OF GIFT RECEIVED IN THE RELEVANT YEAR FROM NRIS AND HAD ALSO FURNISHED THE COPY OF GIFT DEED ALONG WITH REPLY. APART FROM THIS, SIMULTANEOUSLY THE ASSESSEE MADE IT CLEAR THAT AFORESAID AMOUNT WAS RECEIVED BY THE ASSESSEE AS GIFT, BUT TO BUY PEACE AND TO AVOID ANY DISPUTE THE ASSESSEE WAS OFFERING THE AMOUNT OF GIFT AS TAXABLE INCOME SUBJECT TO THE CONDITION THAT NO PENALTY ACTION SHOULD BE INITIATED AGAINST THE ASSESSEE. FURTHERMORE, IT WAS MADE CLEAR BY THE ASSESSEE THAT THE GIFT UNDER CONSIDERATION WAS A GENUINE ONE AND THE RELATED DOCUMENTS OF GIFT WERE S ENT TO THE AO. THUS IT WAS QUITE CLEAR, THAT THIS ENTIRE TRANSACTION WAS NOT DETECTION OF ITA NO. 1147/MUM/2012 M/S. ASREC INDIA LTD., 17 THE AO THAT THE GIFT WAS NOT GENUINE, AND THAT THE ASSESSEE HAD OFFERED THE AMOUNT WITHOUT ANY SPECIFIC F ENQUIRY REGARDING SUCH GIFT BY THE AO. SURRENDER OF THE AMOU NT BY THE ASSESSEE AFTER RECEIPT OF THE QUESTIONNAIRE COULD NOT LEAD TO AN INFERENCE THAT IT WAS NOT VOLUNTARY, IN THE ABSENCE OF ANY MATERIAL ON RECORD TO SUGGEST THAT IT WAS BOGUS OR UNTRUE. IT IS FURTHER EVIDENT THAT THERE WAS NEITHER ANY DETECTION NOR ANY INFORMATION IN THE POSSESSION OF THE REVENUE WHICH MIGHT LEAD TO A CONCLUSION THAT THERE WAS A DETECTION BY THE REVENUE OF CONCEALMENT. ACCORDINGLY / THE TRIBUNAL RIGHTLY AFFIRMED THE ORDER OF THE CIT(A) IN DELETING THE PENALTY. K.C. BUILDERS & ANR. VS. ASSTT. CIT (2004) 186 CTR (SC) 721 : (2004) 265 ITR 562 (SC), CIT VS. S.V. ELECTRICATS (P) LTD. (2006) 155 TAXMAN 158 (MP) AND CIT VS. ASHIM KUMAR AGARWAL (2005) 196 CTR (JHARKHAND) 23 : (2006) 153 TAXMAN 226 (JHARKHAND ) 16 . IN THIS VIEW OF THE MATTER A ND CONSIDERING THE RATIO OF CASE LAWS DISCLOSED ABOVE, WE ARE OF THE VIEW THAT THERE IS A BONAFIDENESS IN THE CLAIM OF THE ASSESSEE WITH REGARD TO PROVISION CREATED FOR IMPAIRMENT IN VALUE OF INVESTMENT IN SECURITY RECEIPTS AND ALSO FILING OF REVISED RETUR N WITHDRAWING SUCH PROVISIONS IS VOLUNTARY AND NOT AFTER DETECTION BY THE AO. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE AO WAS ERRED IN HOLDING THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS IN RESPECT OF ITS INCOME WHICH WARRANTS LEVY OF P ENALTY U/S. 271(1) (C) OF THE ACT. HENCE, W E DIRECT THE AO TO DELETE PENALTY LEVIED U/S.271(1)(C) OF THE ACT. 1 7 . IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 18 / 08 /2017 SD/ - ( MAHA VIR SINGH ) SD/ - ( G. MANJUNATHA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 18 / 08 /201 7 KARUNA SR. PS ITA NO. 1147/MUM/2012 M/S. ASREC INDIA LTD., 18 COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT . 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//