M/s. Sun Pharmaceuticals Industries, Jammu V. The Income Tax Officer, Jammu

ITA 128/ASR/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60675 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-06-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 18-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R L CHHANALIA
• Assessee Lawyers: SUBHASH JALAN
• Keywords: Capital receipt
• Section: 43B; 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO. 128(ASR)/2011 ASSESSMENT YEAR:2005-06 PAN :AATFS9584Q M/S. SUN PHARMACEUTICALS INDUSTRIES, VS. THE INCOME TAX OFFICER, BARI BARHAMANA, JAMMU. WARD 1(3), JAMMU. (APPELLANT) (RESPONDENT) I.T.A. NO. 341(ASR)/2011 ASSESSMENT YEAR:2005-06 PAN :AATFS9584Q THE INCOME TAX OFFICER, VS. M/S. SUN PHARMACEUTICA LS INDUSTRIES, WARD 1(3), JAMMU. JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. SUBHASH JALAN, CA RESPONDENT BY:SH. R.L. CHHANALIA, DR DATE OF HEARING:07/06/2012 DATE OF PRONOUNCEMENT: 12/06/2012S ORDER PER BENCH ; THESE CROSS APPEALS - ONE BY THE ASSESSEE AND ANOT HER BY THE REVENUE ARISE FROM ORDER OF THE CIT(A), JAMMU, DATED 24.0 3.2011 FOR THE ASSESSMENT YEAR 2005-06. 2 2. IN ITA NO.128(ASR)/2011, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) , ERRED IN CONFIRMING THE LEVY OF PE NALTY U/S 271(1)(C) OF THE ACT IN RESPECT OF RS.28,37,619/- B EING THE AMOUNT OF DISALLOWANCE ON ACCOUNT OF ALLEGED PRICE DIFFERENCE IN THE PURCHASES U/S 80IB(13) READ WITH SECTION 80I A(10). 1.1 THE LD. CIT(A) ERRED IN NOT APPRECIATING THE DE TAILED FACTS AND VARIOUS CASE LAWS SUBMITTED/RELIED UPON BY THE APP ELLANT DURING THE COURSE OF APPEAL HEARING AND THEREBY ERR ED IN NOT CONCLUDING THAT THERE IS NEITHER ANY CONCEALMENT NO R FURNISHING OF INACCURATE PARTICULARS ON THE FACTS AND CIRCUMST ANCES OF THE CASE AND THEREFORE PENALTY NEEDS TO BE DELETED. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) , ERRED IN CONFIRMING THE LEVY OF PE NALTY U/S 271(1)(C) OF THE ACT IN RESPECT OF RS.1,62,598/- BE ING THE AMOUNT OF INTEREST ON FIXED DEPOSIT WITH ELECTRICIT Y BOARD, SALES TAX DEPARTMENT & STAFF LOANS, NON CONSIDERED WHILE COMPUTING DEDUCTION U/S 80IB(4) IN RESPECT OF APPELLANTS IND USTRIAL UNDERTAKINGS BY CONSIDERING THE SAME AS NOT DERIVE D FROM THE BUSINESS OF INDUSTRIAL UNDERTAKING. 2.1. THE SAID DISALLOWANCE BEING ON ACCOUNT OF LEGA L INTERPRETATION AND DEBATABLE ISSUE, THE LEVY OF PENALTY, HOLDING T HAT THE APPELLANT FILE INACCURATE PARTICULARS OF INCOME, IS BAD IN LAW AND THE SAME NEEDS TO BE DELETED. 3. IN ITA NO.341(ASR)/2011, THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: A) ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN ALLOWING RELIEF ON ACCOUNT OF DEDUCTIO N U/S 80IB ON CENTRAL EXCISE DUTY REFUND BY RELYING UPON ORDERS O F HON'BLE HIGH COURT IF J&K, JAMMU WHICH HAS BEEN DELIVERED NOT ON MERITS OF THE ISSUE BUT HOLDING THE RECEIPT TO BE A CAPITAL RECEIPT ONLY BECAUSE THE POLICY UNDER WHICH THE SAME WAS PA ID ENVISAGED TACKLING THE UNEMPLOYMENT IN THE STATE WH ICH CANNOT 3 BE SAID TO BE A GOOD TEST FOR DECIDING WHETHER A RE CEIPT IS A TRADING RECEIPT OR A CAPITAL RECEIPT. B) ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN FACTS AND CIRCUMSTANCES AND IN LAW IN NOT APPRECIATING THE JUDGMENTS OF HON'BLE SUPREME COURT OF INDIA IN THE CASE OF PONNI SUGAR & SAWHNEY STEEL AND PRES S WORKS LTD, WHEREIN THE HON'BLE SUPREME COURT HAD HELD SUC H RECEIPTS TO BE THE REVENUE RECEIPTS IN AS MUCH AS IN THAT CA SE PAYMENTS WERE MADE ONLY AFTER THE INDUSTRIES HAD BEEN SET UP AND PAYMENTS WERE NOT MADE FOR PURPOSE OF SETTING UP OF INDUSTRIES. C) ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN FACTS AND CIRCUMSTANCES AND IN LAW IN NOT CONSIDERING THE DECISION IN THE CASE OF SEAHAM HARB OUR DOCK COMPANY WHICH LAYS DOWN TWO IMPORTANT TESTS FOR DET ERMINING WHETHER RECEIPTS IS A TRADING RECEIPT OR A CAPITAL RECEIPT. D) ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. C IT(A) WAS RIGHT IN FACTS AND CIRCUMSTANCES AND IN LAW IN NOT APPRECIATING AND APPLIED THE PURPOSE TEST AS LAID D OWN BY THE JUDGMENTS OF THE HON'BLE SUPREME COURT. IN THE CAS E OF ASSESSEE, THE MONEY RECEIVED BY THE ASSESSEE ON ACC OUNT OF REFUND OF CENTRAL EXCISE WAS NOT SUPPOSED TO BE SPE NT IN A PARTICULAR MANNER FOR PURPOSE OF SUBSTANTIAL EXPANS ION OF THE INDUSTRY. THE APPELLANT CRAVES TO AMEND OR ADD ANY ONE OR MOR E GROUNDS OF APPEAL. 4. THE BRIEF FACTS IN THE PRESENT APPEALS ARE THAT THE ASSESSEE FILED NIL RETURN AFTER CLAIMING DEDUCTION UNDER SECTION 80IB OF THE ACT AMOUNTING TO RS.152,24,19,667/- FROM ITS DADRA UNIT AND RS.62,9 3,38,706/- FROM ITS JAMMU UNIT. THE ASSESSMENT WAS COMPLETED AT RS.191 ,58,16,807/- AFTER MAKING THE FOLLOWING ADDITIONS: 4 I) DISALLOWANCE OF DEDUCTION UNDER RS.152,24,19,6 67/- SECTION 80IB FOR DADRA UNIT II DISALLOWANCE OF DEDUCTION U/S 80IB FOR JAMMU UNIT: A) DISALLOWANCE U/S 80IB(13) R.W.S 80IA(10) OF THE ACT. RS.22,94,54,269/- B) DISALLOWANCE U/S 80IB(4) IN R/O CENTRAL EXCISE DUTY REFUND RS.13,53,46,672/- C) DISALLOWANCE U/S 80IB(4) IN R/O INTEREST INCOME RS. 2,81,12,598/- D) DISALLOWANCE U/S 80IB(4) IN R/O DISALLOWANCE U/S 43B RS. 3,41,270/- E) DISALLOWANCE U/S 80IB(4) IN R/O DISALLOWANCE U/S 40A(IA) RS. 1,42,331/- RS.39,33,97,140/- GRAND TOTAL: RS.191,58,16,807/- 5. THE LD. CIT(A) UPHELD THE QUANTUM APPEAL. 6. THE I.T.A.T. AMRITSAR BENCH, IN ITA NO.184(ASR)/ 2009 VIDE ITS ORDER DATED 11.06.2011 HAS SUSTAINED THE FOLLOWING DISALL OWANCES: I) DISALLOWANCE U/S 80IB(4) IN RESPECT RS.13,53, 46,672/- OF PROFIT ATTRIBUTABLE TO CENTRAL EXCISE DUTY REFUND. II) DISALLOWANCE U/S 80IB(13) R.W.S.80IA(10) RS. 28,37,619/- FOR THE PURCHASE OF RAW MATERIAL FROM SPIL III) DISALLOWANCE U/S 80IB(4) IN R/O RS. 1,62,5 98/- INTEREST INCOME. 6. THE A.O. INITIATED PENALTY PROCEEDINGS UNDER SEC TION 271(1)(C) OF THE INCOME TAX ACT, 1961. THE EXPLANATION WAS GIVEN BY THE ASSESSEE, WHICH WAS NOT ACCEPTED BY THE AO AND HE LEVIED THE PENALT Y UNDER SECTION 271(1)(C) OF THE ACT, WITH RESPECT TO THE ADDITIONS CONFIRMED BY THE I.T.A.T. 5 AMRITSAR BENCH, AMRITSAR, VIDE ITS ORDER DATED 11.0 6.2010 AS MENTIONED HEREINABOVE. 7. THE LD. CIT(A) DELETED THE PENALTY WITH RESPECT TO THE ADDITIONS OF CENTRAL EXCISE DUTY REFUND BY RELYING UPON THE DEC ISION OF THE HONBLE JAMMU & KASHMIR HIGH COURT IN THE CASE OF SHREE BAL AJI ALLOYS AND OTHERS REPORTED IN 333 ITR 335. HOWEVER, HE UPHELD THE PEN ALTY IN RESPECT OF OTHER DISALLOWANCES. 8. LD. COUNSEL FOR THE ASSESSEE, SH. S.C. JALAN, C A ARGUED AND SUBMITTED THAT ENTIRE FACTUAL POSITION RIGHT FROM ASSESSMENT STAGE WAS DISCLOSED. NEITHER ANY INCOME WAS CONCEALED NOR INACCURATE PAR TICULARS OF INCOME WERE FURNISHED. THESE ARE VERY MUCH EVIDENT FROM THE ASS ESSMENT ORDER AS WELL AS ORDER UNDER SECTION 271(1)(C) OF THE ACT AND IS ALS O EVIDENT FROM THE ORDER OF THE LD. CIT(A). 9. AS REGARDS TWO DISALLOWANCES CONFIRMED BY THE IT AT, THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO PAGES 54 TO 72 OF THE PAPER BOOK AND PAGE NOS. 73 TO 78 OF THE PAPER BOOK. HE SUBMITTED THAT SIX PAGES STATEMENT IN RESPECT OF PURCHASE OF RAW MATERIAL FR OM SPIL AND FROM OTHERS WERE SUBMITTED AND THE AMOUNT OF RS.28,37,619/- W AS COMPUTED WITHOUT ANY PREJUDICE. HE ALSO REFERRED TO THE EXPLANATION OF PRICE DIFFERENCE IN RAW MATERIAL PURCHASED FROM SPIL AND OTHERS AT PAGES 65 TO 72 OF THE PAPER BOOK 6 WHICH CONTAIN ELABORATE EXPLANATION FOR PURCHASES O F DADRA AS WELL AS JAMMU UNITS, SEPARATELY. SIMILARLY, THE DETAILS OF INTEREST AMOUNTING TO RS.1,62,558/- WERE SUBMITTED TO AO AS APPEARING AT PAGE PB-75. THE LD. COUNSEL FOR THE ASSESSEE FINALLY ARGUED THAT EXPLA NATION 1 TO SECTION 271(1)(C) OF THE ACT , IS NOT ATTRACTED BECAUSE PR OPER EXPLANATION IN RESPECT OF ABOVE TWO CONDITIONS WERE FURNISHED AND HAS BEE N SUBSTANTIATED, ESPECIALLY WHEN THE FACTUAL POSITION HAS NOT BEEN D ISPUTED BY THE REVENUE. NO FACT HAS BEEN FOUND INACCURATE. HE ALSO RELIED U PON DECISIONS OF VARIOUS COURTS OF LAW IN SUPPORT OF HIS CLAIM BEFORE US. I) CIT VS. RELIANCE PETROPRODUCTS (P) LTD (2010) 322 I TR 158 II) DY. C.I.T VS. PATHANKOT PRIMARY CO-OPERATIVE DEVELO PMENT BANK LTD. (2011) 142 TTJ (ASR) 401(ASR) III) INCOME TAX OFFICER VS. AJAY KAPOOR (2011) 142 TTJ ( ASR) 269 IV) ACIT VS. PERFECT FORGINGS (2012) 143 TTJ (CHD) 117 9.1 ACCORDINGLY, HE ARGUED BY RELYING UPON HIS ARGU MENTS AND DECISIONS RELIED UPON HEREINABOVE THAT NO PENALTY UNDER SECTI ON 271(1)(C) CAN BE LEVIED AND PRAYED TO REVERSE THE ORDER OF THE LD. CIT(A). 10. THE LD. DR SH. R.L. CHHANALIA, ON THE OTHER HAN D, RELIED UPON THE ORDER OF THE LD. CIT(A) AND ARGUED THAT THE ASSESS EE HIMSELF HAS COMPUTED THE AMOUNT OF PRICE DIFFERENTIAL OF RS.28,37,619/- AND THE ASSESSEE WAS AWARE OF THE FACT THAT THE SAID AMOUNT WAS NOT ELIG IBLE FOR DEDUCTION UNDER SECTION 80-IB(4) OF THE ACT. AS REGARDS THE INTERE ST INCOME OF RS.1,62,598/-, 7 HE STATED THAT IT IS A WELL SETTLED POSITION THAT I NTEREST INCOME IS NOT DERIVED FROM BUT ATTRIBUTABLE TO THE BUSINESS OF INDUSTRIAL UNDERTAKING AND HENCE, NOT ELIGIBLE FOR DEDUCTION U/S 80IB OF THE ACT. HEN CE, LEVY OF PENALTY IN RESPECT OF ABOVE TWO DISALLOWANCES IS JUSTIFIED. H E FURTHER SUBMITTED THAT INFERENCE MAY BE DRAWN FROM THE FACT OF DESIGNING T HE TRANSACTION BY THE ASSESSEE WITH SPIL IN SUCH A WAY THAT THE ASSESSEE DERIVES UNDUE BENEFIT BY PURCHASING THE RAW MATERIAL FROM SPIL AT LOWER PRI CE AS COMPARED TO THE PURCHASE OF SIMILAR ITEMS FROM OTHER SUPPLIERS. THI S IS DONE IN ORDER TO ENHANCE THE PROFIT, WHICH IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB OF THE ACT. 11. IN THE REJOINDER, IT WAS SUBMITTED BY THE LD. C OUNSEL FOR THE ASSESSEE THAT EXPLANATIONS/REASONS OF PRICE DIFFERENCE BETWE EN THE RAW MATERIAL PURCHASED FROM SPIL AND OTHER CONCERNS WERE ELABORA TED AS STATED AT PB 65 TO 72 AND FURTHER EMPHASIZED THAT SPIL SOLD THE SA ME AT COST I.E. WITHOUT INCURRING ANY LOSS. SOME OF THE RAW MATERIAL WERE IMPORTED BY SPIL, WHICH WAS SOLD TO THE ASSESSEE AND THEREFORE PRICE OF IM PORTED MATERIAL WAS NOT COMPARABLE WITH THE PRICE OF DOMESTIC PURCHASES F ROM OTHER CONCERNS. IN ANY CASE, THE LD. COUNSEL FOR THE ASSESSEE ARGUED T HAT SINCE ALL THE FACTS WERE DISCLOSED FULLY AND TRULY AND NOTHING WAS CONCEALED & NO FACT WAS FOUND TO BE FALSE, THE PROVISIONS OF SECTION 271(1)(C) OF TH E ACT ARE NOT ATTRACTED. 8 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. AS PER ARGUMENT MADE BY BOTH THE PARTIES AND ON PER USAL OF THE RECORD, WE FIND THAT THE ITAT, AMRITSAR BENCH IN ITS ORDER DA TED 11.06.2010 IN ITA NO.184(ASR)/2009, HAD IN FACT, DELETED THE WHOLE AD DITION MADE UNDER SECTION 80IB(13) READ WITH SECTION 80IA(10) OF THE ACT, EXCEPT RS.28,37,619/- BY REFERRING TO ASSESSEES LETTERS D ATED 24.12.2007 & 10.12.2007 AT PB-II (PAGES 292 TO 304 ) WHICH ARE IN THE PRESENT PAPER BOOK AT PAGES 54 TO 72. FROM THESE LETTERS, WE FIND THAT THE ASSESSEE HAD FURNISHED DETAILED EXPLANATION WITH RESPECT TO 72 INSTANCES O F PRICE DIFFERENCE OF RS.28,37,619/- UNIT WISE CHARTS ARE AVAILABLE AT P B 57 TO 62 AND THE EXPLANATION OF PRICE DIFFERENCE OF SUCH RAW MATERIA L IS AVAILABLE AT PB 65 TO 72. ALL THESE DETAILS WERE FURNISHED TO THE AO DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS BY THE ASSESSEE. WE FIND NO COMMENTS OF THE AO AND THE LD. CIT(A) FOR THEIR INACCURACY. IN THIS RE GARD PARA-33 OF ITAT ORDER AT PAGES 64 & 65DATED 11.06.2010 PASSED IN I TA NO.189(ASR)/2009 IS RELEVANT WHICH IS AVAILABLE AT PB 150 AND 151 AND I S READ AS UNDER: 33. WE HAVE GIVEN CAREFUL CONSIDERATION TO THIS IS SUE. IN OUR OPINION, WHEN THE APPELLANT HAS GIVEN DETAILED EXPL ANATION ITEM-WISE TO SUBSTANTIATE ITS CONTENTION THAT THERE HAS BEEN NO STATEMENT OF THE PURCHASE AND WHEN THE REVENUE HAS NOT DISPUTED THIS EXPLANATION NOR HAS PLACED ANY OTHER EXPLANATION SO AS TO DISBELIEV E THE APPELLANTS CASE, IT WOULD NOT BE CORRECT TO ASSUME THAT THERE IS ANY SUCH UNDERSTATEMENT OF PRICE. AS TO WHETHER THE GOODS AR E SOLD AT A PRICE BELOW THE MARKET PRICE OR NOT IS ONLY A QUESTION OF FACT. IF THE 9 REVENUE CHOOSES NOT TO GIVE ANY FACTUAL REPLY TO TH E APPELLANTS CONTENTION EITHER IN THE BODY OF THE ASSESSMENT ORD ER OR DURING THE REMAND REPORT OR EVEN IN THE BODY OF THE CIT(A)S O RDER, WE SEE NO REASON NOT TO ACCEPT THE APPELLANTS PLEA. ACCORDIN GLY, THE FINDINGS OF THE CIT(A) THAT PROFIT IN RELATION OF DADRA NEW UNI T AND IN RELATION TO JAMMU UNIT WAS OVERSTATED ON ACCOUNT OF PURCHASE OF RAW MATERIAL FROM SPIL, AT PRICE LOWER THAN THE MARKET PRICE IS AFFECTED IS INCORRECT AND TO THAT EXTENT, THE PROFITS WOULD BE ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB OF THE ACT. 12.1. AS REGARDS DISALLOWANCE OF RS.1,62,578/- THE UNDISPUTED FACT IS THAT THE APPELLANT HAS FURNISHED THE DETAILS OF INT EREST AS APPEARING AT PB- 75, WHICH HAS NOT BEEN FOUND TO BE FALSE OR INACCUR ATE. 12.2 THEREFORE, WE ARE OF THE VIEW THAT THE ABOVE S ITUATION DO NOT FALL UNDER EXPLANATION 1 TO SECTION 271(1)(C) AS TH E ASSESSEE HAS NOT ONLY FURNISHED COMPLETE EXPLANATION BUT HAS ALSO BEEN AB LE TO SUBSTANTIATE THE SAME.. IT IS A WELL SETTLED LEGAL POSITION THAT PEN ALTY PROCEEDINGS ARE INDEPENDENT PROCEEDINGS OF ASSESSMENT PROCEEDINGS. ACCORDING TO THE DECISIONS RELIED UPON BY THE LD. COUNSEL FOR THE AS SESSEE, AS MENTIONED HEREINABOVE AND OTHER DECISIONS OF VARIOUS COURTS O F LAW, THE PENALTY UNDER SECTION 271(1)(C) IS NOT LEVIABLE BECAUSE THE DISALLOWANCE IS CONFIRMED IN THE QUANTUM APPEALS. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND THE DECISIONS MENTIONED HEREINABOVE I.E. (I) CIT VS. RELIANCE PETROPRODUCTS (P) LTD (2010) 322 ITR 158, (II)DY. C.I.T VS. PATHANKOT PRIMARY CO-OPE RATIVE DEVELOPMENT 10 BANK LTD. (2011) 142 TTJ (ASR) 401, (III)INCOME TA X OFFICER VS. AJAY KAPOOR (2011) 142 TTJ (ASR) 269 AND ACIT VS. PERFEC T FORGINGS (2012) 143 TTJ (CHD) 117, WE ARE OF THE VIEW THAT MERE MA KING OF THE CLAIM WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NO T AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. THEREFORE, PENALTY UNDER SECTION 271(1)(C) OF THE ACT IN RESPE CT OF ABOVE TWO DISALLOWANCES IS NOT JUSTIFIED AND AO IS DIRECTED T O DELETE THE SAME AND THE ORDER OF THE LD. CIT(A) IS REVERSED O THE ISSUE ACCORDINGLY. THUS, ALL THE GROUNDS OF APPEAL OF THE ASSESSEE IN ITA NO.128 (ASR)/2011 ARE ALLOWED. 13 NOW WE TAKE UP APPEAL OF THE REVENUE IN ITA NO.341ASR)/2011 FOR THE ASSESSMENT YEAR 2005-06. TH E FACTS AS MENTIONED, HEREINABOVE IN RESPECT OF CENTRAL EXCISE DUTY REFUND WHICH WAS DISALLOWED BY THE AO AND THE LD. CIT(A) IN QUAN TUM APPEAL WHILE COMPUTING DEDUCTION UNDER SECTION 80-IB OF THE ACT, THE ITAT, AMRITSAR BENCH, AMRITSAR, VIDE ITS ORDER DATED 11.06.2010 CO NFIRMED THE DISALLOWANCE BY FOLLOWING THE DECISION OF THE CO-OR DINATE BENCH IN THE CASE OF M/S. SHREE BALAJI ALLOYS, KATHUA VS. INCOME TAX OFFICER, KATHUA, IN ITA NO.255(ASR)/2009 FOR THE ASSESSMENT YEAR 2005-06. HOWEVER, THE ITAT VIDE ITS ORDER DATED 23.05.2012 P ASSED IN M.A. 11 NO.08(ASR)/2011 HAS RECALLED ITS ORDER DATED 11.06. 2010 ON THIS VERY ISSUE. AGAIN WHEN THE CASE CAME UP FOR HEARING BEF ORE THE ITAT BENCH ON 07.06.2012, THE ITAT AMRITSAR BENCH, VIDE ITS OR DER DATED 07.06.2012 ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE HONBLE HIGH COURT OF JAMMU & KASHMIR, IN THE CASE OF M/S. SHREE BALAJI ALLOYS, KATHUA, REPORTED IN 333 ITR 335, ON THIS VERY ISSUE. THEREFORE, IN VIEW OF OUR ORDER DATED 07.06.2012 ME NTIONED HEREINABOVE, WE ARE OF THE VIEW THAT WHEN THE DISALLOWANCE ON TH IS ISSUE HAS BEEN DELETED THEN PENALTY UNDER SECTION 271(1)(C) OF THE ACT, ON THE SAME ISSUE DOES NOT SURVIVE. THUS, ALL THE GROUND OF THE REVEN UE ARE DISMISSED. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN I TA NO. 128(ASR)/2011 IS ALLOWED AND THAT OF THE REVENUE IN ITA NO.3419ASR)/2011 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12TH JUNE, 2012 SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 12 TH JUNE, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. SUN PHARMACEUTICALS INDUSTRIES,JA MMU. 2. THE ITO WARD 1(3), JAMMU. 3. THE CIT(A), JAMMU. 4. THE CIT, JAMMU. 5.THE SR DR, ITAT, AMRITSAR.