M/s. Gahoi Chemicals Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 1212/DEL/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3443 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 23-01-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 12-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SAROHA
• Keywords: Depreciation; Search and seizure; Onus to prove; Unabsorbed depreciation
• Section: 133A; 153A; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER I.T.A .NO. 1212/DEL/2012 ASSESSMENT YEAR-2005-06 I.T.A .NO. 1213/DEL/2012 ASSESSMENT YEAR-2006-07 GAHOI CHEMICALS PVT. LTD., 41, FRIENDS COLONY WEST, NEW DELHI. (PAN: AABCG8027F) (APPELLANT) VS DCIT, CENTRAL CIRCLE 23, NEW DELHI. (RESPONDENT) APPELLANT BY SHRI SANJAY GARG, CA RESPONDENT BY SHRI A.K. SAROHA, CIT DR ORDER PER SUDHANSHU SRIVASTAVA, JM BOTH THESE APPEALS HAVE BEEN PREFERRED BY THE ASSES SEE. ITA NO. 1212/DEL/2012 HAS BEEN FILED AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) XXXI II, NEW DELHI DATED 30/12/2012 WHEREIN THE LD. CIT (APPEALS ) HAS CONFIRMED PENALTY OF RS. 3,65,925/- IMPOSED UNDER S ECTION 271 DATE OF HEARING 23.1.2017 DATE OF PRONOUNCEMENT 21.4.2017 I.T.A. NO. 1212 & 1213/DEL/2012 ASSESSMENT YEAR 2005-06, 2006-07 2 (1) (C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CA LLED THE ACT). THE RELEVANT ASSESSMENT YEAR IS 2005-2006. 1.1 ITA NO. 1213/DEL/2012 HAS BEEN FILED AGAINST T HE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEA LS) XXXIII, NEW DELHI DATED 30/12/2011 CONFIRMING IMPO SITION OF PENALTY OF RS. 4,55,588/- UNDER SECTION 271 (1) (C) OF THE ACT FOR ASSESSMENT YEAR 2006-2007. BOTH THE APPEALS WERE HE ARD TOGETHER AND FOR THE SAKE OF CONVENIENCE THEY ARE B EING DISPOSED OF THROUGH THIS COMMON ORDER. 2. THE BRIEF FACTS OF THE CASE FOR AY 2005-2006 ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE CASE OF MANUFACT URING OF LAMINATED POUCH FILM AND POLY POUCH FILM. ON 01/09/ 2005, A SURVEY OPERATION UNDER SECTION 133A WAS CARRIED OUT IN THE FACTORY PREMISES SITUATED AT B 8, SITE NO. 1, PAN KI INDUSTRIAL ESTATE, KANPUR AND AN INVENTORY OF STOCK WAS PREPAR ED. ON THE VERY SAME DATE, A SEARCH AND SEIZURE ACTION UNDER S ECTION 132 OF THE ACT ALSO TOOK PLACE IN THE KURELE GROUP. THE OR IGINAL RETURN FOR ASSESSMENT YEAR 2005-2006 WAS FILED ON 31 ST OF OCTOBER 2005 AT KANPUR DECLARING BUSINESS LOSS OF RS. 4,17,123/- AND SHORT- TERM CAPITAL LOSS OF RS. 4,812/- TO BE CARRIED FORW ARD TO THE NEXT YEAR AND UNABSORBED DEPRECIATION OF RS. 20,11,360/- . THEREAFTER, I.T.A. NO. 1212 & 1213/DEL/2012 ASSESSMENT YEAR 2005-06, 2006-07 3 THE CASE WAS CENTRALISED AT DELHI AND SUBSEQUENTLY NOTICE UNDER SECTION 153A OF THE ACT FOR ASSESSMENT YEAR 2005-20 06 WAS ISSUED AND IN COMPLIANCE A RETURN WAS FILED DECLARI NG THE SAME PARTICULARS AS WERE IN THE ORIGINAL RETURN FILED ON 10/05/2007. IN THE ASSESSMENT PROCEEDINGS, AN ADDITION OF RS. 10 L ACS WAS MADE ON ACCOUNT OF SHARES ALLOTTED TO M/S JEEVANDHA RA WATERS PRIVATE LIMITED AS THE NAME OF THE ASSESSEE COMPANY DID NOT APPEAR EITHER IN THE SCHEDULE OF INVESTMENTS OR IN THE SCHEDULE OF LOANS AND ADVANCES OF ANNUAL ACCOUNTS OF THE SHAREHOLDING COMPANY. THE ASSESSEE DID NOT PREFER A NY APPEAL AGAINST THE AFORESAID ADDITION. A PENALTY OF RS. 3, 65,925/- WAS IMPOSED FOR FILING INACCURATE PARTICULARS OF INCOME WHICH WAS CONFIRMED BY THE LD. CIT (APPEALS) AND NOW THE ASSE SSEE IS IN APPEAL BEFORE THE ITAT AND HAS PREFERRED THE FOLLOW ING GROUNDS OF APPEAL 1. BECAUSE THE LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS IN SUSTAINING THE PENALTY IMPOSED BY THE LEAR NED ASSESSING OFFICER FOR THE ADDITION MADE TO THE RETU RNED INCOME BY INVOKING THE DEEMING PROVISION OF SECTION 68 ON ACCOUNT OF SHARE CAPITAL OF RS. 10 LACS RECEIVED . 2. BECAUSE THE LEARNED CIT (A) HAS ERRED IN LAW A ND ON FACTS IN SUSTAINING THE PENALTY BY IGNORING THE FAC T THAT THE ASSESSMENT FRAMED U/S 153A WAS WITHOUT JURISDICTION AS NO 'PANCHNAMA' WAS DRAWN IN THE NAM E OF APPELLANT COMPANY, ACCORDINGLY THERE WAS NO VALI D PLATFORM FOR LEVY OF PENALTY. I.T.A. NO. 1212 & 1213/DEL/2012 ASSESSMENT YEAR 2005-06, 2006-07 4 2.1 THE BRIEF FACTS OF THE CASE FOR ASSESSMENT YEAR 2006-2007 ARE THAT DURING THE COURSE OF SURVEY OPERATION UNDE R SECTION 133A OF THE ACT, PHYSICAL STOCK TAKING WAS DONE AND IT WAS FOUND THAT THERE WAS A DIFFERENCE OF 18,082 KG IN THE STO CK AS PER BOOKS OF ACCOUNTS AND THE ACTUAL STOCK FOUND IN INVENTORY TAKING DURING THE COURSE OF SURVEY OPERATION. AS PER THE A O, THE ASSESSEE FAILED TO RECONCILE THE DIFFERENCE IN STOC K AND HAD CONCEDED THAT THERE WAS A DIFFERENCE OF 17,882 KG I N THE STOCK AS ON THE DATE OF SURVEY AND THE SAME WAS OFFERED BY T HE ASSESSEE COMPANY FOR TAX. THE VALUE OF STOCK WAS WORKED OUT AT RS. 13,53,500/- BY TAKING AVERAGE PURCHASE PRICE OF EAC H ITEM AND AN ADDITION OF THE AMOUNT WAS MADE TO THE INCOME OF THE ASSESSEE COMPANY FOR THE YEAR UNDER CONSIDERATION. SUBSEQUENTLY, PENALTY PROCEEDINGS UNDER SECTION 271 (1) (C) OF THE ACT WERE INITIATED AND THE PENALTY OF RS. 4,55, 588/- WAS IMPOSED. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEA L BEFORE THE LD. CIT (APPEALS) WHO CONFIRMED THE PENALTY AND NOW THE ASSESSEE IS IN APPEAL BEFORE THE ITAT AND HAS RAISE D THE FOLLOWING GROUNDS OF APPEAL 1. BECAUSE THE LD. CIT HAS ERRED IN LAW AND ON FAC TS IN SUSTAINING THE PENALTY IMPOSED BY THE ASSESSING OFF ICER. I.T.A. NO. 1212 & 1213/DEL/2012 ASSESSMENT YEAR 2005-06, 2006-07 5 2. BECAUSE THE ORDER OF LD. CIT BEING ERRONEOUS I N LAW AND ON FACTS ON ACCOUNT OF DIFFERENCE IN STOCK OF R S. 13,53,500/- FOUND DURING SURVEY. 3. IN THE APPEAL PERTAINING TO ASSESSMENT YEAR 2005 -2006, THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE AS SESSMENT ORDER SPECIFICALLY MENTIONS THAT ALL THE REQUISITE INFORMATION, THAT IS CONFIRMATION, BANK STATEMENT, AUDITED ACCOUNTS A ND INCOME TAX RETURNS FOR THE YEAR UNDER CONSIDERATION OF THE SHAREHOLDER COMPANY WERE FURNISHED BY THE ASSESSEE COMPANY AND EVEN THE SHARES STOOD ALLOTTED AND AS SUCH THE INITIAL ONUS OF THE ASSESSEE STOOD DULY DISCHARGED AND THE ONLY REASON FOR ADDIT ION WAS THAT THE NAME OF THE ASSESSEE COMPANY WAS NOT REFLECTED IN THE ANNUAL ACCOUNTS OF THE SHAREHOLDER COMPANY. THE LD. AR SUBMITTED THAT NO DOCUMENTS FURNISHED BY THE ASSESS EE WERE FOUND TO BE FALSE AND THAT NO FACTS HAD BEEN CONCEA LED AND THE ASSESSEE COULD NOT BE HELD RESPONSIBLE FOR THE ERRO RS/OMISSIONS IN THE BALANCE SHEET/DOCUMENTS OF OTHERS. IT WAS AL SO SUBMITTED THAT THE PENALTY HAD BEEN IMPOSED ON THE GROUND THA T NO APPEAL WAS FILED AGAINST THE QUANTUM PROCEEDINGS BUT NON-F ILING OF THE APPEAL IS RELEVANT ONLY FOR THE PURPOSE OF ASSESSME NT OF INCOME AND IS NOT AN ADVERSE FACT IN PENALTY PROCEEDINGS. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THIS APPRO ACH WAS I.T.A. NO. 1212 & 1213/DEL/2012 ASSESSMENT YEAR 2005-06, 2006-07 6 WHOLLY ARBITRARY AND ERRONEOUS. THE LD. AUTHORISED REPRESENTATIVE FURTHER SUBMITTED THAT THE VERY INIT IATION OF THE PENALTY SUFFERED FROM JURISDICTIONAL DEFECT AS NO D UE SATISFACTION AS ENVISAGED BY SECTION 271 (1) (C) OF THE ACT WAS RECORDED. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE SH OW CAUSE NOTICE ISSUED UNDER SECTION 274 OF THE ACT AND PLAC ED AT PAGE 3 OF THE PAPER BOOK DID NOT SPECIFY AS TO WHETHER THE PENALTY PROCEEDINGS WERE BEING INITIATED FOR CONCEALING PAR TICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE NO TICE UNDER SECTION 274 OF THE ACT SHOULD SPECIFICALLY STATE AS TO WHETHER THE PENALTY WAS BEING IMPOSED FOR THE CONCEALMENT OF PA RTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. RELIANCE WAS PLACED ON THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VERSUS MANJUNATHA COT TON AND GINNING FACTORY REPORTED IN 359 ITR 565 WHEREIN THE HONBLE KARNATAKA HIGH COURT HAD HELD THAT THE NOTICE UNDER SECTION 274 OF THE ACT SHOULD SPECIFICALLY STATE THE GROUNDS ME NTIONED IN SECTION 271 (1) (C), THAT IS WHETHER IT IS FOR CONC EALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCO ME. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT IN THE PRE SENT CASE, I.T.A. NO. 1212 & 1213/DEL/2012 ASSESSMENT YEAR 2005-06, 2006-07 7 NEITHER IN THE ASSESSMENT ORDER NOR IN THE SHOW CAU SE NOTICE ISSUED UNDER SECTION 274, THE ASSESSEE WAS MADE AWA RE AS TO ON WHAT GROUND WERE THE PENALTY PROCEEDINGS INITIATED OR THE SHOW CAUSE NOTICE WAS BEING ISSUED. IT WAS FURTHER SUBMI TTED THAT MERELY BECAUSE THE ASSESSEE DID NOT FILE AN APPEAL, THE SAME CANNOT BE CONSIDERED AS AN ADMITTANCE AND, THEREFOR E, WITHOUT SHOWING THAT THE EXPLANATION OF THE ASSESSEE WAS FA LSE OR NOT BONA FIDE, NO PENALTY COULD HAVE BEEN VALIDLY IMPOS ED IN THE PRESENT CASE. IT WAS SUBMITTED THAT THE PROVISIONS OF SECTION 68 PERMITTING THE ASSESSING OFFICER TO TREAT UNEXPLAIN ED CASH CREDIT AS INCOME WERE ENABLING PROVISIONS FOR MAKING CERTA IN ADDITIONS WHERE THERE WAS A FAILURE ON THE PART OF THE ASSESS EE TO GIVE AN EXPLANATION OR WHERE THE EXPLANATION WAS NOT TO THE SATISFACTION OF THE ASSESSING OFFICER. IT WAS SUBMITTED THAT THE ADDITION ON THIS ACCOUNT WOULD NOT AUTOMATICALLY JUSTIFY THE IMPOSIT ION OF PENALTY UNDER SECTION 271 (1) (C ) AND NO PENALTY COULD BE IMPOSED IF THE FACTS AND CIRCUMSTANCES WERE EQUALLY CONSISTENT WIT H THE HYPOTHESIS THAT THE AMOUNT DID NOT REPRESENT CONCEA LED INCOME AS WITH THE HYPOTHESIS THAT IT DID AND FOR THIS PRO POSITION THE LD. AUTHORISED REPRESENTATIVE PLACED RELIANCE ON THE DE CISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF NATIONAL TEXTILES I.T.A. NO. 1212 & 1213/DEL/2012 ASSESSMENT YEAR 2005-06, 2006-07 8 VERSUS CIT REPORTED IN 249 ITR 125. IT WAS SUBMITTE D THAT IN VIEW OF THE FACTUAL MATRIX OF THE CASE, THE PENALTY IMPO SED WAS PATENTLY WRONG AND THE SAME SHOULD BE DELETED 3.1 IN RESPONSE, THE LD. DEPARTMENTAL REPRESENTATIV E SUBMITTED THAT THE ADDITION UNDER SECTION 68 HAD ATTAINED FIN ALITY AS NO APPEAL HAD BEEN PREFERRED AGAINST THE QUANTUM ADDIT ION. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSE SSEE HAD DISGUISED ITS OWN MONEY IN THE FORM OF SHARE CAPITA L WHICH WOULD HAVE GONE UNTAXED BUT FOR THE ADDITION BY THE REVEN UE THROUGH THE ASSESSMENT AND, THEREFORE, IT WAS A CLEAR CASE OF CONCEALMENT OF PARTICULARS OF INCOME. THE LD. DEPARTMENTAL REPR ESENTATIVE FURTHER SUBMITTED THAT AS THE AFORESAID SHARE CAPIT AL WAS NOT APPEARING IN THE BALANCE SHEET OF M/S JEEVANDHARA W ATER PRIVATE LIMITED, THE EXPLANATION OF THE ASSESSEE WAS FALSE AND, THEREFORE, IT WAS COVERED BY CLAUSE (A) OF EXPLANATION 1 TO SE CTION 271 (1) (C) OF THE ACT. THE LD. DEPARTMENTAL REPRESENTATIVE SUB MITTED THAT THE ASSESSEE HAD NOT DISCHARGED ITS BURDEN OF PROOF BY PRODUCING COGENT MATERIAL IN THE CASE AND WAS SQUARELY COVERE D BY THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VERSUS HCIL KALINDEE ARSSPL REPORTED IN 37 TAXMAN.COM 347 WHEREIN THE HONBLE HIGH COURT OF DELHI HAD LAID DOWN THE R ATIO THAT I.T.A. NO. 1212 & 1213/DEL/2012 ASSESSMENT YEAR 2005-06, 2006-07 9 INITIAL BURDEN OF PROOF WAS UPON THE ASSESSEE TO PR OVE THAT HIS EXPLANATION WAS BONA FIDE AND WHICH COULD BE DISCHA RGED ONLY BY PRODUCING COGENT MATERIAL. THE LD. DEPARTMENTAL REP RESENTATIVE SUBMITTED THAT THE HONBLE HIGH COURT HAD HELD THAT PENALTY PROVISIONS DID NOT REQUIRE CULPABLE MENS REA AND THE RELEVANT QUESTION TO BE ASKED WAS WHETHER THE ASSESSEE HAD D ISCHARGED THE ONUS AND SATISFIED THE CONDITIONS MENTIONED IN EXPLANATION 1. THE LD. CIT DR ALSO PLACED RELIANCE ON THE JUDGEMEN T OF THE HONBLE DELHI HIGH COURT IN THE CASE OF ZOOM COMMUN ICATIONS PRIVATE LIMITED REPORTED IN 327 ITR 510. THE LD. DE PARTMENTAL REPRESENTATIVE FURTHER SUBMITTED THAT THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF MAK DATA PRIVA TE LIMITED VERSUS CIT REPORTED IN 38 TAXMAN.COM 448 HAS LAID D OWN THAT THE AO HAS TO SATISFY HIMSELF WHETHER THE PENALTY P ROCEEDINGS BE INITIATED OR NOT DURING THE COURSE OF ASSESSMENT PR OCEEDINGS AND THAT THE AO IS NOT REQUIRED TO RECORD HIS SATISFACT ION IN A PARTICULAR MANNER OR TO REDUCE IT IN WRITING. THE L D. DEPARTMENTAL REPRESENTATIVE FURTHER SUBMITTED THAT THE HONBLE SUPREME COURT HAS FURTHER CLARIFIED THAT THE AO IS NOT TO BE CARRIED AWAY BY THE PLEA OF THE ASSESSEE LIKE VOLU NTARY DISCLOSURE, BUY PEACE, AVOID LITIGATION, AMIC ABLE SETTLEMENT ETC I.T.A. NO. 1212 & 1213/DEL/2012 ASSESSMENT YEAR 2005-06, 2006-07 10 TO EXPLAIN ITS CONDUCT AND THAT THE INITIATION OF P ENALTY PROCEEDINGS IS TO BE MADE DURING ASSESSMENT PROCEED INGS AND AFTER THAT IT IS A MATTER OF JUDICIAL PROCEEDINGS A S TO WHETHER THE CASE IS COVERED UNDER SECTION 271 (1) (C) ARE NOT. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE MENT ION BY THE AO ABOUT THE ADMITTANCE BY THE ASSESSEE FOR FILING INACCURATE PARTICULARS OF INCOME CANNOT BE CONSTRUED AS TO MEA N THAT THE AO HAD LEVIED PENALTY FOR FILING INACCURATE PARTICU LARS ONLY. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT IN L IGHT OF THE JUDICIAL PRECEDENTS AND THE CONDUCT OF THE ASSESSEE , THE ORDER OF THE LD. CIT (APPEALS) TO BE UPHELD. 3.2 FURTHER, IN APPEAL PERTAINING TO ASSESSMENT YEA R 2006- 2007, THE LD. AUTHORISED REPRESENTATIVE DREW OUR AT TENTION TO PAGE 33 OF THE PAPER BOOK WHICH REFLECTED THE TOTAL EXCESS STOCK AND THE TOTAL STOCK IN SHORT AS ON 31 ST OF AUGUST 2005. THE LD. AUTHORISED REPRESENTATIVE POINTED OUT THAT THE TOTA L EXCESS STOCK AS PER THE 2 ND LAST COLUMN IN THE CHART AMOUNTED TO RS. 4,92,583.66, WHEREAS, THE TOTAL STOCK IN SHORT AS P ER THE LAST COLUMN IN THE CHART AMOUNTED TO RS. 8,61,272.10. TH E LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE FIGURE OF THE TOTAL SHORTAGE IN STOCK, THAT IS, RS. 13,53,855.76 WAS WO RKED OUT BY I.T.A. NO. 1212 & 1213/DEL/2012 ASSESSMENT YEAR 2005-06, 2006-07 11 ADDING THE TOTAL OF THESE TWO COLUMNS AND AS SUCH T HE PENALTY IMPOSED WAS ON A WRONG AMOUNT. IT WAS FURTHER SUBMI TTED BY THE LD. AUTHORISED REPRESENTATIVE THAT THE ADDITION HAD BEEN AGREED UPON BY THE ASSESSEE TO BUY PEACE OF MIND AND THAT THE SAME WAS NOT A FIT CASE FOR IMPOSITION OF PENALTY AS NO CONCEALMENT/FURNISHING OF INACCURATE PARTICULARS OF INCOME WAS MADE OUT. IT WAS SUBMITTED THAT THE OPENING STOCK A ND THE CLOSING STOCK DURING THE YEAR UNDER CONSIDERATION W ERE ACCEPTED BY THE ASSESSING OFFICER AND THE VALUATION WAS NOT DISTURBED AND AS SUCH ANY EXCESS/SHORTAGE GOT NEUTRALISED DURING THE COURSE OF THE YEAR. THE LD. AR SUBMITTED THAT IN VIEW OF THE FACTS OF THE CASE THE PENALTY IMPOSED SHOULD BE DELETED. 3.3 IN RESPONSE, THE LD. DEPARTMENTAL REPRESENTATIV E SUBMITTED THAT THE QUANTUM ADDITION FOR EXCESS STOCK FOUND DU RING THE COURSE OF SURVEY HAD ATTAINED FINALITY AS NO APPEAL HAD BEEN PREFERRED AGAINST THE QUANTUM ADDITION AND THE PLEA OF THE ASSESSEE THAT THE STOCK AT THE CLOSE OF THE YEAR WA S AS PER THE BOOKS OF ACCOUNTS WHICH TOOK CARE OF THE DISCREPANC Y IN THE MIDDLE OF THE YEAR WAS NOT ACCEPTABLE AS IT UNDERLI NES THE FACT THAT THE BOOKS ARE NOT RELIABLE. THE LD. DEPARTMENT AL REPRESENTATIVE ALSO RELIED ON A PLETHORA OF DECISIO NS AS RELIED I.T.A. NO. 1212 & 1213/DEL/2012 ASSESSMENT YEAR 2005-06, 2006-07 12 UPON BY HIM IN THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 2005- 2006 AND SUBMITTED THAT THE RATIO OF THE JUDGEMENTS WOULD BE APPLICABLE ON THE FACTS OF THE CASE IN THIS YEAR AL SO. IT WAS SUBMITTED THAT IN VIEW OF THE SPECIFIC DISCREPANCY FOUND DURING THE COURSE OF THE SURVEY, THE PENALTY IMPOSED WAS J USTIFIED AND THAT THE SAME SHOULD BE UPHELD. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. AS FAR AS THE APPEAL FOR AY 200 5-06 IS CONCERNED, IT IS CLEAR THAT IN THE INSTANT CASE IT CANNOT BE SAID THAT THE ASSESSEE HAD WITHHELD ANY RELEVANT INFORMA TION REGARDING THE RECEIPTS AND INCOME FROM THE AO. THE AMOUNTS ADDED BACK BY THE AO WERE THE AMOUNTS DISCLOSED BY THE ASSESSEE ITSELF. WITH REGARD TO THE PROVISIONS OF S ECTION 271(1)(C ) OF THE ACT PERTAINING TO PENALTY, THE HONBLE APEX COURT HAS AUTHORITATIVELY LAID DOWN THAT MAKING OF A CLAIM BY THE ASSESSEE WHICH IS NOT SUSTAINABLE WILL NOT TANTAMOUNT TO FUR NISHING INACCURATE PARTICULARS. IN CIT VS. RELIANCE PETROPR ODUCTS PVT. LTD. 322 ITR 158 (SC), THE HONBLE APEX COURT HAS HELD A S FOLLOWS: A GLANCE AT THIS PROVISION WOULD SUGGEST THAT IN O RDER TO BE COVERED, THERE HAS TO BE CONCEALMENT OF PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY , THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE PRESENT IS NOT A CAS E OF I.T.A. NO. 1212 & 1213/DEL/2012 ASSESSMENT YEAR 2005-06, 2006-07 13 CONCEALMENT OF INCOME. THAT IS NOT THE CASE OF THE REVENUE EITHER. HOWEVER, THE LD. COUNSEL FOR THE REVENUE SUGGESTED THAT BY MAKING INCORRECT CLAIM FO R THE EXPENDITURE ON INTEREST, THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. AS PER LAW LEXICON, THE MEANING OF THE WORD 'PARTICULAR' IS A DETAIL OR DETAILS (IN PLURAL SENSE); THE DETAILS OF A CLAIM, OR THE SEPARATE ITEMS OF AN ACCOUNT. THEREFO RE, THE WORD 'PARTICULARS' USED IN THE SECTION 271 (1) (C) WOULD EMBRACE THE MEANING OF THE DETAILS OF THE CLA IM MADE. IT IS AN ADMITTED POSITION IN THE PRESENT CAS E THAT NO INFORMATION GIVEN IN THE RETURN WAS FOUND T O BE INCORRECT OR INACCURATE. IT IS NOT AS IF ANY STATEM ENT MADE OR ANY DETAIL SUPPLIED WAS FOUND TO BE FACTUAL LY INCORRECT. HENCE, AT LEAST, PRIMA FACIE, THE ASSESS EE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. THE LEARNED COUNSEL ARGUED THAT 'SUBMITTING AN INCORRECT CLAIM IN LAW FOR THE EXPENDITURE ON INTEREST WOULD AMOUNT TO GIVING INACCURATE PARTICULARS OF SUCH INCOME.' WE DO NOT THINK THAT SUCH CAN BE THE INTERPRETATION OF THE CONCERNED WORDS. THE WORDS ARE PLAIN AND SIMPLE. IN ORDER TO EXPOSE THE ASSESSEE TO THE PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENA LTY PROVISION CANNOT BE INVOKED. BY ANY STRETCH OF IMAGINATION, MAKING AN INCORRECT CLAIM IN LAW CANNO T TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. 4.01 ALTHOUGH, BOTH THE LOWER AUTHORITIES HAVE HEL D THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS AND C ONCEALED PARTICULARS OF INCOME, ON A CONSIDERATION ON THE FA CTS, SUCH A VIEW IS NOT TENABLE IS THE PRESENT APPEAL. THEREFOR E, RESPECTFULLY FOLLOWING THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA) WE DELETE THE PENALTY FOR AY 2005-06. I.T.A. NO. 1212 & 1213/DEL/2012 ASSESSMENT YEAR 2005-06, 2006-07 14 4.1 AS FAR AS THE APPEAL FOR AY 06-07 IS CONCERNED, THE LD. AR HAS RAISED A POINT THAT THE PENALTY HAS BEEN IMPOSE D ON THE WRONG AMOUNT. HOWEVER, THIS PLEA WAS NOT BEFORE THE LD. CIT (A). FURTHER, THE CORRECT AMOUNT ON WHICH THE PENALTY HA S TO BE IMPOSED WILL HAVE TO BE VERIFIED BY THE AO IN TERMS OF THE SUBMISSIONS MADE BY THE LD. AR BEFORE US. THEREFORE , WITHOUT COMMENTING ON THE MERITS OF THE IMPOSITION OF PENAL TY, WE RESTORE THE ISSUE TO THE FILE OF THE AO FOR CONSIDERING THE SUBMISSIONS OF THE ASSESSEE WITH REGARD TO THE QUANTUM ON WHICH TH E PENALTY HAS TO BE WORKED OUT. THEREFORE, THIS APPEAL STAND S ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE FINAL RESULT, I.T.A. NO. 1212/DEL/2012 S TANDS ALLOWED AND I.T.A. NO. 1213/DEL/2013 STANDS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21.04.2017 SD/- SD/- (G.D. AGRAWAL) (SUDHANSHU SRIVAS TAVA) PRESIDENT JUDICIAL MEMBER DATED: 21ST APRIL 2017 GS I.T.A. NO. 1212 & 1213/DEL/2012 ASSESSMENT YEAR 2005-06, 2006-07 15 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASS TT. REGISTRAR ITAT NEW DELHI