DCIT, Panchkula V. M/s Haryana Agro Industries Corpn. Ltd., Panchkula

ITA 1186/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6948 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 15-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI SARANGA L
• Assessee Lawyers: B K NOHRIA
• Keywords: Wrong claim; Bad and doubtful debts; Difference of opinion
• Section: 133A; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.1186/CHD/2016 (ASSESSMENT YEAR : 2011-12) THE D.C.I.T., VS. M/S HARYANA AGRO INDUSTRIES PANCHKULA CIRCLE, CORPN. LTD., PANCHKULA. BAY NO.15-20, SECTOR-04, PANCHKULA. PAN: AAACH4686C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAVI SARANGAL, CIT DR RESPONDENT BY : SHRI B.K. NOHRIA DATE OF HEARING : 25.05.2017 DATE OF PRONOUNCEMENT : 18.08.2017 O R D E R PER ANNAPURNA GUPTA, A.M . : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER PASSED BY THE CIT(APPEALS), PANCHKULA DAT ED 27.9.2016 PERTAINING TO ASSESSMENT YEAR 20011-12, CANCELLING THE PENALTY LEVIED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE REVENUE HAS TAKEN THE ONLY EFFECTIVE GROUND : 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LD. C1T(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE AND CANCELLED THE PENALTY U/S 271(L)(C) WHI CH IS NOT CORRECT BECAUSE THE ASSESSEE HAS DELIBERATELY FURNISHED THE. INACCURATE PARTICULAR OF ITS INCOME. 3. PENALTY IN THE PRESENT CASE HAS BEEN LEVIED ON ACCOUNT OF DISALLOWANCE OF THE FOLLOWING PROVISIONS DEBITED TO THE PROFIT & LOSS ACCOUNT: 2 A) PROVISIONS FOR BAD AND DOUBTFUL DEBT =RS.10,99,45,270/- B) PROVISION FOR PERFORMANCE AWARDS =RS. 45,00,0 00/- 4. THE QUANTUM ADDITIONS ON ACCOUNT OF THE SAME WERE UPHELD BY THE LD.CIT(APPEALS) AND SUBSEQUENTLY BY THE I.T.A.T. ALSO VIDE ITS ORDER IN ITA NO.119/CHD/ 2015 DATED 24.6.2016. AFTER THE CIT(APPEALS)S ORDER IN QUANTUM PROCEEDINGS, THE ASSESSING OFFICER LEVIED PENALTY @ 150% FOR THE REASON THAT THE ASSESSEE HAD CLAIMED EXPENS ES KNOWING THAT IT WAS INCORRECT AND WHICH THUS TANTAM OUNTED TO CONCEALMENT AND FURNISHING OF INACCURATE PARTICU LARS OF INCOME. THE ASSESSING OFFICER ALSO HELD THAT THE A SSESSEES CLAIM WAS WHOLLY UNTENABLE IN LAW AND THAT THE ASSE SSEES CASE WAS COVERED BY THE DECISION OF THE HON'BLE APE X COURT IN THE CASE OF MAK DATA PVT. LTD. VS. CIT, 358 ITR 593. THUS, PENALTY OF RS.5,69,24,135/- WAS LEVIED ON THE ASSESSEE. 5. THE MATTER WAS CARRIED IN APPEAL BEFORE THE LD.CIT(APPEALS) WHERE THE ASSESSEE CONTENDED THAT I T WAS NOT A CASE OF FURNISHING ANY INACCURATE PARTICULARS OF INCOME OR CONCEALING ANY PARTICULARS OF INCOME SINC E ALL PARTICULARS RELATING TO THE SAID EXPENSES WERE DULY DISCLOSED IN THE BALANCE SHEET OF THE ASSESSEE. IT WAS ALSO CONTENDED THAT THE DECISION OF THE HON'BLE APEX COU RT IN MAK DATA PVT. LTD. (SUPRA) WAS NOT APPLICABLE IN TH E CASE OF THE ASSESSEE SINCE THERE WAS NO SEARCH ON THE ASSES SEE AND FURTHER THAT NO PENALTY WAS LEVIABLE IN VIEW OF THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF RELIANCE P ETRO 3 PRODUCTS PVT. LTD., 322 ITR 158 WHEREIN IT WAS HEL D THAT MERE MAKING OF A WRONG CLAIM DID NOT AMOUNT TO FURN ISHING INACCURATE PARTICULARS OF INCOME. THE LD.CIT(APPEA LS), AFTER CONSIDERING ASSESSEES SUBMISSION, DELETED TH E PENALTY LEVIED HOLDING THAT ALL PARTICULARS RELATING TO THE SAID EXPENSES HAD BEEN DULY DISCLOSED BY THE ASSESSEE AN D MERELY THE CLAIM OF THE ASSESSEE VIS--VIS THE SAID PROVISION HAD BEEN DISALLOWED WHICH COULD NOT BE THE GROUND F OR LEVY OF PENALTY. THE LD.CIT(APPEALS) ALSO HELD THAT THE ASSESSEE WAS NOT HIT BY THE EXPLANATION-1 TO SECTION 271(1)( C) OF THE ACT ALSO. FURTHER RELYING ON THE DECISION OF THE H ON'BLE APEX COURT IN THE CASE OF RELIANCE PETRO PRODUCTS P VT. LTD. (SUPRA) THE LD.CIT(APPEALS) HELD THAT THE ASSESSEE HAVING FURNISHED ALL DETAILS OF ITS EXPENDITURE WHICH WERE NOT FOUND TO BE INACCURATE IT COULD NOT BE VIEWED AS CONCEALMENT OF INCOME AND MERELY BECAUSE THE ASSESS EES CLAIM OF SUCH EXPENDITURE HAD NOT BEEN ACCEPTED BY THE ASSESSING OFFICER IT WOULD NOT TANTAMOUNT TO FURNIS HING OF INACCURATE PARTICULARS OF INCOME. THE LD.CIT(APPEA LS) FURTHER DISTINGUISHED THE DECISION OF THE HON'BLE A PEX COURT IN THE CASE OF MAK DATA PVT. LTD. (SUPRA) STATING T HAT THE SAID DECISION WAS BASED ON DIFFERENT FACTS PERTAINI NG TO DISCLOSURE OF INCOME MADE DURING SURVEY. THE RELEV ANT FINDINGS OF THE LD.CIT(APPEALS) AT PARA 6.3 TO 6.6 OF THE ORDER IS AS UNDER: 6.3 AFTER CONSIDERING THE FACTS, SUBMISSION, ASSESSM ENT AND PENALTY ORDERS, IT IS NOTED THAT THE AO FOUND THE PROVISIONS FOR BAD AND DOUBTFUL DEBTORS AND PERFORM ANCE 4 AWARD FROM SCHEDULE 15 OF THE ANNUAL REPORT AND POI NT NO. 26 OF THE NOTES TO ACCOUNT OF ANNUAL REPORT RESPECTIVE LY. BOTH WERE IN THE NATURE OF PROVISION DEBITED TO P&L ACCOUNT W HEREAS DURING ASSESSMENT IT WAS FOUND THAT AS PER PROVISIO NS OF SECTION 36(L)(VII) ONLY BAD DEBTS WRITTEN OFF AS IR RECOVERABLE ARE ALLOWED AND THE PERFORMANCE AWARD PERTAINED TO T HE PRIOR PERIOD WHICH IS IN THE NATURE OF PRIOR PERIOD E XPENSES. FROM THESE FACTS, IT IS APPARENT THAT THE AMOUNTS WHICH WERE DISALLOWED ON THESE ACCOUNTS WERE DECLARE D BY THE APPELLANT IN ITS AUDITED BOOKS OF ACCOUNT AND A NNUAL REPORT PLACED BEFORE THE AO. THE FILING OF RETURN OF INCOME IS SUBSEQUENT TO SUCH AUDIT OF BOOKS OF ACCOUNT. THE AP PELLANT HAD CLAIMED THE ENTIRE AMOUNT OF PROVISION WHEREAS T HE AO FOUND THAT CLAIM WAS NOT JUSTIFIED AS PER PROVISIONS OF ACT. THE AO WHILE IMPOSING PENALTY FOR FURNISHING INACCU RATE PARTICULARS OF INCOME IS OF THE VIEW THAT THE WRONG CLAIM OF EXPENDITURE IS AN ATTEMPT TO REDUCE THE TAXABLE INCOME. 6.4 FURTHER, A REFERENCE IS MADE TO EXPLANATION 1 TOSECTION271(L).THE EXPLANATION 1 PROVIDES WHERE IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF TOTAL I NCOME, THE ADDITIONS ARE MADE BECAUSE THE PERSON OFFERS AN EXPL ANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROV IDE THAT SUCH EXPLANATION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOT AL INCOME HAVE BEEN DISCLOSED BY HIM, THEN THE AMOUNT SO ADDED SHALL BE DEEMED TO BE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. SO, THE EXPLANATION 1 RAISES AN INITIAL PR ESUMPTION THAT THE ADDITIONS REPRESENT CONCEALED INCOME OF TH E ASSESSEE, HOWEVER, THE PRESUMPTION IS REBUTTABLE. THE INITIAL BURDEN OF DISCHARGING THE ONUS TO REBUT THE ABOVE PRESUMPTION IS ON THE ASSESSEE, I.E., THE ASSESSEE NEED TO EXPLAIN THAT TH E EXPLANATION OFFERED BY HIM ABOUT A PARTICULAR EXPENDI TURE IS BONA FIDE AND ALL MATERIAL TO THE COMPUTATION OF HI S INCOME HAS BEEN DISCLOSED. FURTHER, FAILURE TO SUBSTANTIATE THE EXPLANATION IS NOT ENOUGH TO WARRANT PENALTY. THE AO HAS TO ESTAB LISH THAT THE EXPLANATION OFFERED WAS NOT SUBSTANTIATED. IN THE INSTANT 5 CASE, THE DISALLOWANCE OF PROVISIONS MADE FOR EXPENDIT URES WERE MADE BUT THE ASSESSEE ESTABLISHED ITS CONDUCT TH AT THE PROVISIONS WERE DISCLOSED IN THE NOTES TO ACCOUNT TO TH E ANNUAL REPORT BASED ON AUDIT OF ACCOUNT. THE EXPLANA TION REGARDING CLAIM OF SUCH EXPENDITURE IN THE P&L ACCOUN T WAS ALSO PROVIDED WHICH WERE NOT ACCEPTED BY THE AO AND THE CLAIM WAS DISALLOWED. THIS SHOWS THE APPELLANTS CONDUCT AN D THE EXPLANATION IS CONSIDERABLE AS BONA FIDE. IT WAS T HE REJECTION OF APPELLANTS CLAIM WHICH WAS DONE AS PER OP INION OF THE AO. SUCH ADDITION BY THE AO ON REJECTION OF APPE LLANT'S EXPLANATION ON HAVING DIFFERENCE OF OPINION WOULD NOT WARRANT FOR IMPOSITION OF PENALTY EITHER FOR CONCEA LMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. 6.5 FURTHER, A REFERENCE IS MADE TO THE JUDGMENT OF H ON'BLE SUPREME COURT IN RELIANCE PETROPRODUCTS PVT. LTD. (SUPR A) WHEREIN THE HON'BLE SUPREME COURT OBSERVED AS UNDER :- '9) WE ARE NOT CONCERNED IN THE PRESENT CASE WIT H THE MENS REA. HOWEVER, WE HAVE TO ONLY SEE AS TO -WHETHER IN T HIS CASE, AS A MATTER OF FACT, THE ASSESSEE HAS GIVEN INACCURATE PARTICULARS. IN WEBSTERS DICTIONARY, TH E WORD. 'INACCURATE' HAS BEEN DEFINED AS :- 'NOT ACCURATE, NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH: ERRONEOUS: AS AN INACCURATE STATEMENT, COPY OR TRANSCRIPT'. WE HAVE ALREADY SEEN THE MEANING OF THE WORD 'PARTICULARS' IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORDS IN CONJUNCTION, THEY MUST MEAN TH E DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCUR ATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERR ONEOUS. WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSE E IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEO US OR 6 FALSE. SUCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY U/S 271(L)(C) OF T HE ACT. A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABL E IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOU NT TO THE INACCURATE PARTICULARS. 10) IT WAS TRIED TO BE SUGGESTED THAT SECTION 14A O F THE ACT SPECIFICALLY EXCLUDED'-THE DEDUCTION IN RESPECT TO THE EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT. IT WAS FURTHER POINTED OUT THAT THE DIVIDENDS FROM THE SHARES DID NOT FORM THE PART OF THE TOTAL INCOME. IT WAS, THEREFORE, REITERATED BEFORE US THAT THE ASSESSING OFFICER HAS CORRECTLY REACHED TH E CONCLUSION THAT SINCE THE ASSESSEE HAD CLAIMED EXCESSIVE DEDUCTIONS KNOWING THAT THEY ARE INCORREC T; IT AMOUNTED TO CONCEALMENT OF INCOME, IT WAS TRIED TO BE 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 EXPENDITUR E MAY BE FALSELY (OR IN AN EXAGGERATED AMOUNT) CLAIME D, 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. WE DOES NOT AGREE, AS THE ASSESSEE HAD FURNISHED ALL THE DETAILS OF ITS EXPENDITU RE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, IN THEMS ELVES, WERE NOT FOUND TO BE INACCURATE NOR COULD BE VIEWED AS THE CONCEALMENT OF INCOME ON ITS PART. IT WAS UPTO THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETURN OR NO T. MERELY, BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, WH ICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT, IN OUR OPINION, ATTRACT THE PENALTY UNDER SECTION 271(L)(C). IT WE ACCEPT THE CONTENTION OF THE REVENUE THEN IN CASE OF EVERY RETURN WHERE THE CLAI M MADE IS 7 NOT ACCEPTED BY ASSESSING OFFICER FOR ANY REASON, TH E ASSESSEE WILL INVITE PENALTY UNDER SECTION 271(L)(C). T HAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE. ' 6.6 IN THE BACKDROP OF AFORESAID JUDGMENT, I FI ND THAT THE APPELLANT HAS FURNISHED ALL THE DETAILS OF ITS EXPE NDITURE AS WELL AS THE RETURN OF INCOME, WHICH DETAILS, IN THEMSELV ES WERE NOT FOUND TO BE INACCURATE NOR COULD BE VIEWED AS THE CONCEALMENT OF INCOME. THE APPELLANT'S CLAIMS ON PRO VISIONS FOR BAD DEBT AND PRIOR PERIOD EXPENSE OF PERFORMANC E AWARD WERE NOT ACCEPTED BY THE AO. MERELY, BECAUSE THE AP PELLANT HAD CLAIMED EXPENDITURE WHICH WAS NOT ACCEPTED BY T HE AO, THAT BY ITSELF WOULD NOT AMOUNT TO FURNISHING OF IN ACCURATE PARTICULARS OF INCOME. FURTHER, THE AO HAS IGNORED T HE LAW IN RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA) BY PLACING RELIANCE ON JUDGMENT OF HON'BLE SUPREME COURT IN MAK DATA PVT. LTD. (SUPRA). THE OBSERVATION OF HON'BLE SUPREME COURT I N MAK DATA PVT. LTD. (SUPRA) IS AS UNDER :- '7) THE AO, IN OUR VIEW, SHALL NOT BE CARRIED AWAY BY THE PLEA OF THE ASSESSEE LIKE 'VOLUNTARY DISCLOSURE', ' BUY PEACE', 'AVOID LITIGATION', 'AMICABLE SETTLEMENT', E TC. TO- EXPLAIN AWAY ITS CONDUCT. THE QUESTION IS WHETHER THE ASSESSEE HAS OFFERED ANY EXPLANATION FOR CONCEALMEN T OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME EXPLANATION TO SECTION 271(1) RAISED A PRESUMPTION OF CONCEALMENT, WHEN A DIFFERENCE IS N OTICED BY THE AO, BETWEEN REPORTED AND ASSESSED INCOME. TH E BURDEN IS THEN ON THE ASSESSEE TO SHOW OTHERWISE, B Y COGENT AND RELIABLE EVIDENCE. WHEN THE INITIAL ONU S PLACED BY THE EXPLANATION, HAS BEEN DISCHARGED BY HIM, T HE ONUS SHIFTS ON THE REVENUE TO SHOW THAT THE AMOUNT IN QUESTIONS CONSTITUTED THE INCOME AND NOT OTHERWISE. 8) ASSESSEE HAS ONLY STATED THAT HE HAD SURRENDERED THE ADDITIONAL SUM OF RS.40,74,000/- WITH A VIEW T O AVOID LITIGATION, BUY PEACE AND TO CHANNELIZE THE EN ERGY AND RESOURCES TOWARDS PRODUCTIVE WORK AND TO MAKE 8 AMICABLE SETTLEMENT WITH THE INCOME TAX DEPARTMENT. STATUTE DOES NOT RECOGNIZE THOSE TYPES OF DEFENCES UNDER THE EXPLANATION1TOSECTION271(L)(C) OF THE ACT . IT IS TRITE LAW THAT THE VOLUNTARY DISCLOSURE DOES NOT RELEASE THE APPELLANT-ASSESSEE FROM THE MISCHIEF OF PENAL PROCEEDINGS. THE LAW DOES NOT PROVIDE THAT WHEN AN ASSESSEE MAKES A VOLUNTARY DISCLOSURE OF HIS CONCEAL ED INCOME, HE HAD TO BE ABSOLVED FROM PENALTY. 9) WE ARE OF THE VIEW THAT THE SURRENDER OF INCOME IN THIS CASE IS NOT VOLUNTARY IN THE SENSE THAT THE OF FER OF SURRENDER WAS MADE IN VIEW OF DETECTION MADE BY THE AO IN THE SEARCH CONDUCTED IN THE SISTER CONCERN OF THE ASSESSEE. IN THAT SITUATION, IT CANNOT BE SAID THA T THE SURRENDER OF INCOME WAS VOLUNTARY. AO DURING THE CO URSE OF ASSESSMENT PROCEEDINGS HAS NOTICED THAT CERTAIN DOCUMENTS COMPRISING OF SHARE APPLICATION FORMS, BANK STATEMENTS, MEMORANDUM OF ASSOCIATION OF COMPANIES, AFFIDAVITS, COPIES OF INCOME TAX RETURNS AND ASSESSMENT ORDERS AND BLANK SHARE TRANSFER DEEDS DULY SIGNED, HAVE BEEN IMPOUNDED IN THE COURSE OF SU RVEY PROCEEDINGS UNDER SECTION 133A CONDUCTED ON 16.12.2 003, IN THE CASE OF SISTER CONCERN OF THE ASSESSEE. THE SURVEY WAS CONDUCTED MORE THAN 10 MONTHS BEFORE THE ASSESS EE FILED ITS RETURN OF INCOME. HAD IT BEEN THE INTENTION O F THE ASSESSEE TO MAKE FULL AND TRUE DISCLOSURES OF ITS INCO ME, IT WOULD HAVE FILED THE RETURN DECLARING AN INCOME INC LUSIVE OF THE AMOUNT WHICH WAS SURRENDERED LATER DURING INTEN TION TO DECLARE ITS TRUE INCOME. IT IS THE STATUTORY DUTY OF THE ASSESSEE TO RECORD ALL ITS TRANSACTIONS IN THE BOOKS OF ACCOUNT, TO EXPLAIN THE SOURCE OF PAYMENTS MADE BY IT AND TO DECLARE ITS TRUE INCOME IN THE RETURN OF INCOME FILED BY IT FROM YEAR TO YEAR. THE AO, IN OUR VIEW, HAS RECORDED A CATEGORIC AL FINDING THAT HE WAS SATISFIED THAT THE ASSESSEE HAD CONCEAL ED TRUE PARTICULARS OF INCOME AND IS LIABLE FOR PENALTY PROCE EDINGS U/S 271 READ WITH SECTION 274 OF THE INCOME TAX ACT, 1961. 9 6.7 THEREFORE, IN VIEW OF ABOVE OBSERVATIONS OF HON'BLE SUPREME COURT IT IS FOUND THAT THE JUDGMENT IN RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA) IS APPLICA BLE ON THE FACTS OF THE INSTANT CASE. SINCE, THE JUDGMENT IN MAK DATA PVT. LTD. (SUPRA) WAS BASED ON DIFFERENT FACTS PERTAINING TO DISCLOSURE OF INCOME MADE DURING SURV EY; THEREFORE, THE SAME IS NOT APPLICABLE ON THE FACTS OF THE INSTANT CASE. MOREOVER, THE DECISION IN RELIANCE PETROPRODUCT PVT. LTD. HAS NOT BEEN OVERRULED IN MA K DATA (SUPRA). SO, THE AO WAS NOT JUSTIFIED BY APPLY ING THE JUDGMENT IN MAK DATA PVT. LTD. (SUPRA). THEREFO RE, IN VIEW OF THE FACTS OF THE ISTANT CASE, I AM OF OP INION, BASED ON THE DECISION OF HON'BLE SUPREME COURT IN RELIANCE PETROPRODUCT PVT. LTD. (SUPRA) THAT A MERE CLAIM OF EXPENDITURE WHICH WAS NOT ACCEPTED ON ACCEPTABLE TO REVENUE, THAT BY ITSELF WOULD NOT ATTRACT THE PENAL TY U/S 271(L)(C) OF THE ACT. THEREFORE, THE AO WAS NOT JUS TIFIED IN IMPOSITION OF PENALTY OF RS.5,69,24,135/- U/S 271(L)(C) FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 6. AGGRIEVED BY THE SAME, THE REVENUE HAS COME UP IN APPEAL BEFORE US. DURING THE COURSE OF HEARING BEFORE US THE LD. DR HEAVILY RELIED UPON THE ORDER OF THE ASS ESSING OFFICER AND STATED THAT THE CLAIM OF THE ASSESSEE V IS--VIS THE AFORESAID PROVISIONS WAS CLEARLY UNTENABLE IN L AW SINCE THE CLAIMS FOR PROVISIONS ARE NOT ALLOWABLE AND I T IS ONLY BAD DEBTS ACTUALLY WRITTEN OFF IN THE BOOKS WHICH A RE STATUTORILY ALLOWED AS PER THE PROVISION OF SECTIO N 36(1)(VII) OF THE ACT. AS FAR THE PROVISION FOR PERFORMANCE A WARD THE LD.DR POINTED OUT THAT THE SAME PERTAINED TO THE PR ECEDING YEARS AND WAS THUS NOT ALLOWABLE IN THE IMPUGNED YE AR. THE LD. DR STATED, THEREFORE, THAT BY CLAIMING SUCH 10 EXPENSES THE ASSESSEE HAD FURNISHED INACCURATE PART ICULARS OF INCOME AND PENALTY U/S 271(1)(C) OF THE ACT HAD, THEREFORE, BEEN RIGHTLY LEVIED BY THE ASSESSING OFF ICER. 7. THE LD. COUNSEL FOR ASSESSEE, ON THE OTHER HAND RELIED UPON THE ORDER OF THE LD.CIT(APPEALS) AND PO INTED OUT THAT IT HAD DISCLOSED ALL PARTICULARS AND FACTS REL ATING TO THE AFORESAID CLAIM OF PROVISIONS AND, THEREFORE, HAD NOT FURNISHED ANY INACCURATE PARTICULARS OF INCOME AND FURTHER THAT MERELY BECAUSE ITS SAID CLAIM HAD BEEN DENIED BY THE REVENUE, IT WOULD NOT TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. HEAVY RELIANCE W AS PLACED ON THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA). 8. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTIES, PERUSED THE ORDERS OF THE AUTHORITIES BELO W. WE FIND NO INFIRMITY IN THE ORDER OF THE LD.CIT(APPEALS). LD.CIT(A) HAS RIGHTLY HELD THAT THE ASSESSEE HAS NEITHER CONC EALED NOR FURNISHED INACCURATE PARTICULARS OF INCOME SINCE UNDISPUTEDLY ALL MATERIAL FACTS RELATING TO THE SAI D PROVISIONS HAD BEEN DISCLOSED BY THE ASSESSEE IN T HE ANNUAL ACCOUNTS WHICH FORMED THE BASIS OF THE INCOM E TAX RETURN FILED BY THE ASSESSEE. MOREOVER UNDISPUTEDLY THE SAID PROVISIONS WERE DEBITED TO ITS PROFIT AND LOSS ACCOUNT WHICH WERE DULY AUDITED. ALSO THE ASSESSEE HAD DIS CLOSED THE SAID CLAIM IN THE NOTES TO THE ACCOUNTS TO THE ANNUAL REPORT OF ITS AUDITED ACCOUNTS. IN THIS BACKDROP O F FACTS, THE ASSESSEE HAD CLAIMED THAT IT HAD NOT DELIBERATE LY OR 11 INTENTIONALLY CLAIMED THE SAID PROVISIONS WHILE COM PUTING ITS TAXABLE INCOME. LD.CIT(A) ,WE HOLD, HAS RIGHT LY HELD THAT THE EXPLANATION OF THE ASSESSEE WAS BONAFIDE A ND THE ASSESSEE THEREFORE COULD NOT BE DEEMED TO HAVE CONC EALED PARTICULARS OF HIS INCOME AS PER EXPLANATION 1 TO S ECTION 271(1)(C) OF THE ACT. 9. MOREOVER, WE FIND THAT IT IS ONLY THE CLAIM VIS- -VIS SAID PROVISION WHICH HAD BEEN DENIED BY THE REVENUE . THE HON'BLE APEX COURT IN THE CASE OF RELIANCE PETRO PR ODUCTS PVT. LTD. (SUPRA) HAS CLEARLY HELD THAT WHERE THE A SSESSEE HAS FURNISHED ALL DETAILS OF EXPENDITURE AS WELL AS INCOME IN ITS RETURN AND WHICH DETAILS IN THEMSELVES HAVE NOT BEEN FOUND TO BE INACCURATE OR COULD BE VIEWED AS CONCEA LMENT OF INCOME MERELY BECAUSE THE ASSESSEE HAD CLAIMED EXPENDITURE WHICH WAS NOT ACCEPTED OR ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT ATTRACT PENALTY U /S 271(1)(C) OF THE ACT. THE ISSUE BEFORE US BEING ID ENTICAL TO THAT IN RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) T HE LD.CIT(APPEALS) WE HOLD HAS RIGHTLY HELD THAT IT IS COVERED BY THE SAID DECISION AND NO PENALTY IS, THEREFORE, LEVIABLE. 10. WE MAY ADD THAT ON GOING THROUGH THE ASSESSMENT ORDER AND PENALTY ORDER IT WAS REVEALED THAT PENALT Y WAS INITIATED AND LEVIED FOR FURNISHING INACCURATE PART ICULARS OF INCOME. AS STATED ABOVE THE DETAILS PERTAINING TO T HE AFORESAID CLAIMS WERE FOUND TO BE IN ORDER. BOTH TH E PROVISIONS WERE DEBITED IN THE PROFIT AND LOSS ACCO UNT OF THE ASSESSEE. THEREFORE IT CANNOT BE SAID TO BE A CASE OF 12 FURNISHING INACCURATE PARTICULARS OF INCOME. FOR TH IS REASON ALSO WE HOLD THAT THE PENALTY LEVIED WAS NOT SUSTAI NABLE IN LAW. 11. IN VIEW OF THE ABOVE WE UPHOLD THE ORDER OF THE LD.CIT(A) DELETING THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT AMOUNTING TO RS. GROUNDS OF APPEAL RAISED BY THE REVENUE ARE THEREFO RE DISMISSED. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 18 TH AUGUST, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH