Shri S. Nizamuddin, D.O. LIC of India, Dhar V. The I..T.O., Dhar

ITA 15/IND/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2829 (ITAT-INDORE)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 20-05-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 07-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN LD
• Assessee Lawyers: S C BHANDARI
• Keywords: Salary income; Wrong claim; Capital receipt
• Section: 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, SMC-I BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER ITA NO. 15/IND/2010 AY: 2004-05 SHRI S. NIZAMUDDIN DEVELOPMENT OFFICER,LIC DHAR (PAN AAZPN-2376-B) ..APPELLANT V/S. INCOME TAX OFFICER DHAR ..RESPONDENT ASSESSEE BY : SHRI S.C. BHANDARI DEPARTMENT BY : SMT. APARNA KARAN, LD.SR. DR ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A), UJJAIN, DATED 18.9.2009 CHALLENGING THE SUST ENANCE OF PENALTY OF RS.2,20,810/- IMPOSED U/S 271(1)(C) OF THE ACT. DU RING HEARING OF THIS APPEAL, I HAVE HEARD SHRI S.C. BHANDARI, LEARNED RE PRESENTATIVE FOR THE ASSESSEE AND SMT. APARNA KARAN, LEARNED SENIOR DR. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE ASS ESSEE IS A DEVELOPMENT OFFICER RECEIVED INCENTIVE BONUS FROM L IFE INSURANCE CORPORATION AND INTER ALIA CLAIMED 40% DEDUCTION FR OM THIS BONUS. IT 2 WAS SUBMITTED THAT SINCE TRUE FACTS WERE DISCLOSED IN THE RETURN, THEREFORE, NO PENALTY CAN BE IMPOSED. ON THE OTHER HAND, THE LEARNED SR. DR STRONGLY DEFENDED THE IMPUGNED ORDER BY CONT ENDING THAT SINCE THERE IS EMPLOYER EMPLOYEE RELATIONSHIP BETWEEN LIC AND THE ASSESSEE, THEREFORE, THE CLAIMED INCENTIVE BONUS IS PART OF S ALARY, THEREFORE, NO SEPARATE DEDUCTION IS ALLOWABLE. IT WAS STRONGLY PL EADED THAT SINCE WRONG CLAIM WAS MADE BY THE ASSESSEE BY FURNISHING INACCURATE PARTICULARS OF HIS INCOME, THE PENALTY WAS RIGHTLY LEVIED, 2. I HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED REPRESENTATIVES FROM BOTH THE SIDES AND CONSIDERED THE ARGUMENTS AD VANCED BY THEM. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE W AS WORKING AS A DEVELOPMENT OFFICER WITH LIC OF INDIA, CLAIMED DEDU CTION OF RS.3,81,744/- AT THE RATE OF 40% OF THE AMOUNT OF R S. 16,27,344/- RECEIVED AS INCENTIVE BONUS FROM HIS EMPLOYER. THE LEARNED ASSESSING OFFICER IN VIEW OF THE DECISION OF THE HONBLE JURIS DICTIONAL HIGH COURT ION THE CASE OF CIT V. A.K. GHOSH AND OTHERS (263 ITR 5 36) (M.P.), WHEREIN IT WAS HELD THAT DEVELOPMENT OFFICERS OF LIC ARE NO T ENTITLED TO 40% DEDUCTION OF CLAIMED INCENTIVE BONUS, BEING THE PAR T OF SALARY INCOME, DISALLOWED THE CLAIM OF THE ASSESSEE AND IMPOSED PE NALTY OF RS.2,20,810/- U/S 271(1) OF THE ACT. ON APPEAL, T HE PENALTY ORDER WAS AFFIRMED, WHICH IS UNDER CHALLENGE BEFORE THE TRIBU NAL. NOW THE 3 QUESTION ARISES WHETHER THE DISALLOWANCE OF DEDUCTI ON CLAIMED BY THE ASSESSEE IN ITS RETURN TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS OR CONCEALMENT OF INCOME? THE OBVIOUS REPLY IS NO BECAUSE SINCE THE TRUE FACTS WERE DECLARED BY THE ASSESSEE IN ITS RET URN, THERE IS NEITHER CONCEALMENT OF INCOME NOR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. MY VIEW GETS SUPPORT FROM THE DECISION IN THE CASE OF SOM POWER LIMITED (ITA NOS. 107 AND 108/IND/2000) AND A LSO THE DECISION IN THE CASE OF IQBAL HUSSAIN (ITA NO. 337/IND/2009). THE RELEVANT PORTION OF THE SAME IS REPRODUCED HEREUNDER FOR READY REFER ENCE:- THIS APPEAL IS BY THE ASSESSEE CHALLENGING THE ORD ER OF THE LD. CIT(A) DATED 4.3.2009 CONFIRMING THE PENALTY OF RS. 11,533/- IMPOSED UNDER SECTION 271(1)(C) OF THE ACT . DURING HEARING OF THIS APPEAL, I HAVE HEARD THE LD. RESPEC TIVE COUNSEL AND CONSIDERED THE ARGUMENTS ADVANCED BY TH EM. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE ASSESSEE IS A RETIRED EMPLOYEE FROM BANK OF BARODA, DEPOSITED HIS SAVINGS AMOUNTING TO RS.17 LACS IN FI XED DEPOSIT WITH STATE BANK OF INDIA AND RECEIVED INTER EST OF RS.1,21,922/- ON SUCH DEPOSITS. THE ASSESSEE BORROW ED OVERDRAFT FOR PURCHASING REAL ESTATE FROM ONE MR. H AMOOD AHMED SIDDIQUI FROM THE BANK AND CONSEQUENTLY PAID INTEREST OF RS.56,218/- ON SUCH OVERDRAFT AND RETUR NED THE INCOME OF RS.65,705/- (RS.1,21,923 RS.56,218). TH E ASSESSEE CLAIMED REBATE OF RS.12,000/- U/S 80L OF T HE ACT AND ALSO TDS WAS DEDUCTED BY THE BANK FOR THE INTER EST PAID ON FIXED DEPOSITS. THE ASSESSEE CLAIMED REFUND . THE ASSESSMENT WAS COMPLETED U/S 143(1) ON 1.3.2005. TH E DEPARTMENT DENIED THE REFUND AFTER A LAPSE OF TWENT Y MONTHS FROM THE DATE OF FILING OF THE RETURN. THE A SSESSING OFFICER ISSUED NOTICE U/S 148 AND STARTED INQUIRY A BOUT DEDUCTION OF RS.56,218/- BEING THE AMOUNT OF INTERE ST PAID ON LOAN. THE STAND OF THE ASSESSEE IS THAT SINCE TH E AMOUNT WAS DEDUCTIBLE FROM INTEREST PAID BY THE BANK, THER EFORE, 4 THERE IS NO FURNISHING INACCURATE PARTICULAR OR CON CEALMENT OF INCOME. ON THE OTHER HAND, LD. SR. DR CONTENDED THAT THE ASSESSEE MADE A WRONG CLAIM BY FURNISHING INACC URATE PARTICULAR, CONSEQUENTLY, IT IS CLEAR CASE OF CONCE ALMENT OF INCOME. MY ATTENTION WAS INVITED TO PAGE 7 PARA 4.5 OF THE ORDER OF THE LD. CIT(A). IN REPLY, THE LD. COUNSEL FOR ASSESSEE PLACED RELIANCE UPON THE DECISION FROM THE HONBLE APEX COURT IN CIT VS. RELIANCE PETRO PRODUC TS P. LTD. (2010) 230 CTR (SC) 320. 2. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERU SED THE MATERIAL AVAILABLE ON THE FILE. UNDER THE AFOREMENTIONED FACTS, QUESTION ARISES WHETHER PENAL TY CAN BE IMPOSED ON THE DISALLOWANCE OF CLAIM MADE BY ASS ESSEE. IN MY HUMBLE OPINION, THE OBVIOUS REPLY IS NO BECAU SE FOR IMPOSING PENALTY U/S 271(1)(C), EITHER THERE MUST B E CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. AS NARRATED ABOVE, THE ASSESSEE MADE T HE CLAIM ON THE BASIS THAT THE AMOUNT WAS DEDUCTIBLE F ROM THE INTEREST PAID BY THE BANK. IF THE ITO WAS NOT AGREE ABLE WITH THE CLAIM OF THE ASSESSEE, IT AUTOMATICALLY DO ES NOT TANTAMOUNT TO CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS. IT IS NOT A CASE OF SUPPRES SION OF INCOME. THE ASSESSEE IS FURTHER FORTIFIED BY THE DE CISION OF THE INDORE BENCH OF THE TRIBUNAL IN THE CASE OF M/S . SOM POWER LTD. (ITA NOS.107 & 108/IND/2009, ORDER DATED 5.5.2010). THE RELEVANT PORTION OF THE SAME IS REPR ODUCED HEREUNDER: TH ESE APPEALS ARE BY THE SAME ASSESSEE FOR DIFFERENT ASSESSMENT YEARS WHEREIN THOUGH THE ASSESSEE HAS TAKEN VARIOUS GROUNDS WHICH CAN BE CONCISED TO ONE I.E. CHALLENGING THE PENALTY OF RS. 1,16,000/- EACH U/S 271(1) OF THE ACT. 2. DURING HEARING OF THESE APPEALS, WE HAVE HEARD SHRI R.N. GUPTA, LD. COUNSEL FOR THE ASSESSEE AND SMT. APARNA KARAN, SR. DR. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THERE WAS NO POSITIVE EVIDENCE TO THE EFFECT THAT EITHER THE ASSESSEE CONCEALED ITS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. ON A QUERY FROM THE BENCH ABOUT THE QUANTUM ADDITION, IT WAS CONTENDED THAT THE QUANTUM APPEAL WAS DECIDED ON THE BASIS OF DIFFERENT JUDICIAL PRONOUNCEMENTS IN THE CASES 5 OF TUTICORIN ALKALIES & BOKARO STEEL LIMITED. THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS :- 1. CHANDRAPAL BAGGA V. ITAT; 261 ITR 67 (RAJ.) 2. YOGESH R. DESAI V. ACIT; (2010) 2 TTR 267 (MUM) 3. CIT V. RELIANCE PETRO PRODUCTS PVT. 322 ITR 158 (SC) 4. 218 CTR 21 5. 14 ITJ 269 (IND) ON THE OTHER HAND, THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE STRONGLY DEFENDED THE IMPUGNED ORDER/PENALTY ORDER BY ASSERTING THAT THE ASSESSEE DELIBERATELY MADE A FALSE CLAIM AS INTEREST INCOME IS TAXABLE. IT WAS FURTHER PLEADED THAT WHETHER THE ASSESSEE CAN MAKE A CLAIM WHICH IS PATENTLY NOT ALLOWABLE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. BRIEF FACTS ARE THAT DURING THE IMPUGNED ASSESSMENT YEARS, THE ASSESSEE RECEIVED INTEREST OF RS.12,41,742/- AND RS.14,71,375/- RESPECTIVELY. THE BREAK UP OF THE SAME HAS BEEN GIVEN IN THE RESPECTIVE ASSESSMENT ORDER. AS PER THE REVENUE, NO BUSINESS ACTIVITY WAS CARRIED OUT BY THE ASSESSEE DURING THE YEAR. THE ASSESSEE INCURRED EXPENDITURE DURING THE CONSTRUCTION PERIOD (PRE-OPERATIVE EXPENSES WORKED OUT TO RS.77,25,258/-) (A.Y. 1998-98). THE ASSESSEE DEDUCTED INTEREST OF RS.12,41,742/- FROM THE PRE-OPERATIVE EXPENSES AND THE BALANCE AMOUNT WAS TAKEN TO THE BALANCE SHEET AS EXPENDITURE DURING THE CONSTRUCTION PERIOD PENDING ALLOCATION. DURING ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED AS TO WHY THE INTEREST INCOME SHOULD NOT BE TAXED. THE ASSESSEE CLAIMED THAT IN VIEW OF THE DECISION FROM THE HONBLE APEX COURT IN CIT V. BOKARO STEEL LIMITED; 236 ITR 315 THE AMOUNT SHOULD NOT BE TAXED. IT WAS FURTHER CLAIMED THAT THE INTEREST EARNED ON THE CAPITAL 6 WAS DIRECTLY LINKED WITH THE BUSINESS ACTIVITIES OF THE COMPANY. HOWEVER, THE ASSESSING OFFICER TREATED THE INTEREST AMOUNT AS TAXABLE AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. ON APPEAL, THE QUANTUM ADDITION WAS AFFIRMED. 4. THE LEARNED ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE AS TO WHY PENALTY U/S 271(1) MAY NOT BE IMPOSED ON THE PLEA THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF ITS INCOME. ULTIMATELY PENALTY OF RS.1,16,000/- EACH WAS IMPOSED. ON APPEAL, THE PENALTY WAS AFFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WHICH IS UNDER CHALLENGE BEFORE THE TRIBUNAL. IF THE TOTALITY OF FACTS IS ANALYSED, THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE MADE TRUE DISCLOSURE OF FACTS/INCOME IN ITS RETURN. WE HAVE PERUSED THE PAPER BOOK, SUBMISSIONS OF THE ASSESSEE. ADMITTEDLY, IN ITS STATEMENT OF COMPUTATION OF TOTAL INCOME, THE ASSESSEE SPECIFICALLY GAVE A NOTE BELOW THE AUDITED FINAL ACCOUNTS/TDS CERTIFICATES (PAGES 3 AND 4 OF PAPER BOOK). THE NOTES ARE AS UNDER :- 1. THE COMPANY HAS NOT COMMENCED ANY OPERATIONS AS YET AND ITS PROJECT IS UNDER IMPLEMENTATION. NO COMMERCIAL PRODUCTION HAS BEEN STARTED. 2. INTEREST RECEIVED DURING THE YEAR HAS BEEN REDUCED FROM PREOPERATION EXPENSES AND NOT CHARGED TO TAX IN VIEW OF JUDGMENT OF HONBLE SUPREME COURT (CIT V. BOKARO STEEL LTD. 236 ITR 315 (SC). THE AUDITORS REPORT TO SHAREHOLDERS WAS ALSO FILED BEFORE THE ASSESSING OFFICER. THE BALANCE SHEET AS ON 31.3.1999 SHOWING THE COMPLETE DETAILS OF INCOME AND EXPENDITURE WAS ALSO FILED ALONG WITH NOTES ON ACCOUNTS AND SIGNIFICANT ACCOUNTING POLICIES (PAGES 9 TO 11 OF THE PAPER BOOK), BALANCE-SHEET ABSTRACT AND GENERAL BUSINESS PROFILE OF THE ASSESSEE (PAGE 12 OF THE PAPER BOOK) WERE ALSO FILED. IT IS ALSO A FACT THAT THE ASSESSEE MADE THE TRUE 7 DISCLOSURE OF ALL THE DETAILS. DURING HEARING OF THIS APPEAL, A QUESTION WAS POSED BY THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE WHETHER THE ASSESSEE CAN MAKE A CLAIM WHICH IS PATENTLY NOT ALLOWABLE. THE QUESTION SEEMS TO BE VERY TEMPTING AND REASONABLE BUT THE FACT REMAINS THAT EVEN IF A WRONG CLAIM IS MADE BY THE ASSESSEE BY DISCLOSING TRUE FACTS AUTOMATICALLY DOES NOT ENTITLE THE ASSESSEE FOR SUCH CLAIM AND IT CAN BE DISALLOWED. IT IS THE DUTY OF THE ASSESSING OFFICER TO ASSESS THE CORRECT INCOME/TAX AS PER THE PROVISIONS OF THE ACT. EVEN OTHERWISE, IF A CLAIM HAS BEEN MADE, THAT TOO ON THE BASIS OF A DECISION FROM THE HONBLE APEX COURT BY GIVING A NOTE IN ITS RETURN, DOES NOT MEAN THAT THE ASSESSEE EITHER CONCEALED THE INCOME OR FURNISHED INACCURATE PARTICULARS OF ITS INCOME. IF THE CLAIM IS NOT ALLOWABLE, CERTAINLY IT CAN BE DENIED BUT BEFORE US THE QUESTION IS TO BE DECIDED REGARDING IMPOSITION OF PENALTY. THE LANGUAGE USED IN SECTION 271(1) IS AS UNDER :- 4 271. (1) IF THE 5 [ASSESSING] OFFICER OR THE 6 [***] 7 [COMMISSIONER (APPEALS)] 8 [OR THE COMMISSIONER] IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, ISSAT ISFIED THAT ANY PERSON (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR 13 [* * *] FURNISHED INACCURATE PARTICULARS OF 14 [SUCH INCOME, OR] IF THE LANGUAGE USED IN THE AFORESAID SECTION IS ANALYSED, IT CAN BE SAID THAT FOR IMPOSITION OF PENALTY U/S 271(1) EITHER THERE SHOULD BE CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION, GIVEN IN THE RETURN, IS FOUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE MAY NOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, PENALTY 8 PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGINATION, MAKING AN INCORRECT CLAIM CAN BE SAID TO BE TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT IT DEPENDS UPON THE RETURN FILED BY THE ASSESSEE BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. IN THE IMPUGNED ORDER THERE IS NO FINDING THAT THE DETAILS FILED BY THE ASSESSEE WERE EITHER ERRONEOUS OR FALSE. A MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE, NOR IT CAN BE SAID THAT INACCURATE PARTICULARS WERE FILED. THE CLAIM OF THE ASSESSEE IS MUCH STRONGER BECAUSE THE RETURN IS SUPPORTED BY A NOTE MENTIONED BELOW THE RETURN/PAN AND LOSS ACCOUNT THAT THE CLAIM IS MADE ON THE BASIS OF NOTE AS MENTIONED IN PARA 4 ABOVE. THE RETURN WAS SUPPORTED BY COPY OF AUDITED BALANCE SHEET/AUDIT REPORT AND IN THE AUDITED ACCOUNTS, IN SCHEDULE-C THE ASSESSEE HAS CLEARLY MENTIONED THAT IN THE RELEVANT YEAR IT HAS RECEIVED INTEREST OF RS.12,41,742/- WHICH HAS BEEN REDUCED FROM THE EXPENDITURE INCURRED DURING CONSTRUCTION YEAR. IN THE NOTES OF ACCOUNTS ATTACHED WITH THE BALANCE SHEET, THE ABOVE FACT WAS ALSO CLEARLY MENTIONED IN NOTE NO. 2 OF SCHEDULE-H ATTACHED WITH THE BALANCE-SHEET. FURTHER IN THE SAID SCHEDULE-H NOTE NO. 12 THE ASSESSEE CLEARLY MENTIONED THAT NO PROVISION FOR INCOME TAX HAS BEEN CONSIDERED NECESSARY IN VIEW OF THE FACT THAT THE ASSESSEE COMPANY HAS NOT YET STARTED ITS COMMERCIAL ACTIVITY AND INTEREST INCOME DURING THE PERIOD IS NOT TAXABLE THAT TOO IN VIEW OF THE DECISION FROM THE HONBLE APEX COURT IN THE CASE OF CIT V. BOKARO STEELS LIMITED. IN ITS COMPUTATION OF INCOME IT HAS BEEN MENTIONED THAT THE INTEREST RECEIVED DURING THE YEAR HAS BEEN REDUCED FROM PRE-OPERATIVE EXPENSES AND NOT CHARGED TO TAX. IF THIS CLAIM OF THE ASSESSEE IS NOT ACCEPTED BY THE ASSESSING OFFICER, DOES 9 NOT MEAN THAT THE ASSESSEE EITHER CONCEALED ITS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME WHICH IS THE PRIME CONDITION FOR IMPOSING PENALTY U/S 271(1). EVEN THE MATTER TRAVELLED TO THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WHO REDUCED THE ADDITION OF RS. 12,41,742/- TO RS. 3,31,368/-. ON FURTHER APPEAL, THE TRIBUNAL ALSO HELD THAT OUT OF RS. 12,41,742/- ONLY RS. 3,31,338/- IS TAXABLE. THE SUSTAINED DISALLOWANCE IS DUE TO THE BONAFIDE INTERPRETATION OF LAW ON THE ISSUE. HOWEVER, WE ARE OF THE VIEW THAT IT MAY BE A CASE FOR QUANTUM ADDITION BUT NOT A GOOD CASE FOR IMPOSING PENALTY. OUR VIEW FINDS SUPPORT FROM THE DECISIONS QUOTED ABOVE AND ESPECIALLY THE LATEST DECISION DATED MARCH 17, 2010 FROM THE HONBLE APEX COURT IN CIT V. RELIANCE PETRO PRODUCTS PRIVATE LIMITED (2010) 322 ITR 158 (SC). WHILE COMING TO A PARTICULAR CONCLUSION, THE HONBLE COURT ALSO CONSIDERED THE OFF-QUOTED DECISION OF DILIP & SHROFF V. JCIT (291 ITR 519 (SC), SHRIKRISHNA ELECTRICALS V. STATE; (2009) 23 VST 249 (SC); UNION OF INDIA V. DHARMENDRA TEXTILES PROCESSORS; 306 ITR 277 (SC), UNION OF INDIA V. RAJASTHAN WEAVING MILLS (2010) 1 GSTR 66 (SC), ETC. THE HONBLE APEX COURT IN THE AFORESAID CASE OF RELIANCE PETRO PRODUCTS LIMITED HAS IDENTICALLY DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE DECISIONS IN CHANDRAPAL BAGGA V. ITAT AND ANOTHER (261 ITR 67) (RAJ ) AND YOGESH R. DESAI V. ACIT (SUPRA) SUPPORT OUR VIEW. 5. EVEN IF THE CLAIM OF THE ASSESSEE IS BASED UPON A DECISION FROM THE HONBLE APEX COURT (BOKARO STEEL LIMITED) THOUGH ON DIFFERENT LINE OF REASONING WHICH HAS BEEN MADE A BASE FOR SUCH CLAIM, IT CANNOT BE SAID THAT THE ASSESSEE AT THAT POINT OF TIME WAS WRONG BECAUSE IT IS THE ASSESSING OFFICER WHO IS SUPPOSED TO ANALYSE THE CASE ON ITS OWN MERIT AND IF HE FINDS THAT SUCH CLAIM CANNOT BE ALLOWED, IT MAY BE A GOOD CASE FOR ADDITION OR DISALLOWANCE OR ALLOWANCE, AS THE CASE MAY BE, 10 BUT CERTAINLY IT MAY NOT BE A GOOD CASE FOR IMPOSING PENALTY U/S 271(1) OF THE ACT. FOR ADOPTION OF A PARTICULAR VIEW WE MAY FIND SUPPORT FROM THE DECISION OF THE HON'BLE HIGH COURT OF RAJASTHAN IN CIT V. KANSARA MODLER LIMITED (2008) 218 CTR (RAJ. ) 21 WHEREIN IT WAS CONCLUDED AS UNDER :- CONCLUSION TRIBUNAL EXAMINED THE DIVERSE JUDGMENTS OF THE SUPREME COURT AND FOLLOWED THE DECISION IN KARNAL COOPERATIVES CASE TO HOLD THAT INTEREST EARNED BY THE ASSESSEE ON THE MARGIN MONEY DEPOSITED WITH BANK FOR OPENING LETTER OF CREDIT WAS A CAPITAL RECEIPT, IT CANNOT BE SAID THAT THE TRIBUNAL WAS WHOLLY WRONG IN ADOPTING SUCH COURSE. IN THE LIGHT OF THESE FACTS AND JUDICIAL PRONOUNCEMENTS, EVEN IF A WRONG CLAIM HAS BEEN MADE BY THE ASSESSEE BY DISCLOSING TRUE FACTS, WE ARE OF THE CONSIDERED OPINION THAT NO PENALTY IS LEVIABLE U/S 271(1) OF THE ACT, THEREFORE, BOTH THESE APPEALS OF THEN ASSESSEE ARE ALLOWED. FINALLY, THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH MAY, 2010 IN THE AFORESAID CASE, A DETAILED ORDER HAS BEEN FRAMED BY THE TRIBUNAL ON IDENTICAL FACTS BY CONSIDERING VARIOUS CASES INCLUDING THE LATEST DECISION FROM THE HONBLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS P. LTD. (SUPRA), CITED BY THE LD. COUNSEL FOR ASSESSEE. IN THE PRESENT APPEAL, THE INFORMATION GIVEN IN THE RETURN WAS NOT FOUND TO BE INCORRECT OR INACCURATE, CONSEQUENTLY, KEEPING IN VIEW THE LANGUAGE OF SEC. 271(1)(C) OF THE ACT, THE ASSESSEE CANNOT BE HELD THE GUILTY OF EITHER FURNISHING THE INACCURATE PARTICULARS OR CONCEALMENT OF INCOME BECAUSE EVEN MAKING AN INCORRECT CLAIM/DEDUCTION, IT 11 CANNOT BE SAID THAT THE ASSESSEE CONCEALED ITS INCOME, THEREFORE, RESPECTFULLY FOLLOWING THE AFORESAID DECISION, THIS APPEAL OF THE ASSESSEE DESERVES TO BE ALLOWED. DURING HEARING BEFORE ME, THE LD. SR. DR INVITED MY ATTENTION TO THE CASE-LAWS RELIED UPON BY THE LD. CIT(A). ADMITTEDLY, A DETAILED IMPUGNED ORDER HAS BEEN PASSED BY LD. CIT(A) EVEN BY QUOTING THE DECISION IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILES P. LTD. (306 ITR 277)(SC) AND VARIOUS OTHER DECISIONS. BUT, THE FACTUAL POSITION IS THAT THE ASSESSEE NEITHER FURNISHED INACCURATE PARTICULARS NOR CONCEALED ANY INCOME. EVEN IF A WRONG CLAIM IS MADE BY THE ASSESSEE BY DISCLOSING TRUE FACTS IN THE RETURN DOES NOT TANTAMOUNT TO CONCEALMENT OF INCOME. IN THE CASE OF RELIANCE PETRO PRODUCTS LTD. (SUPRA), THE HONBLE APEX COURT CONCLUDED THAT: MERELY BECAUSE THE ASSESSEE CLAIMED DEDUCTION OF INTEREST EXPENDITURE WHICH HAS NOT BEEN ACCEPTED BY THE REVENUE, PENALTY UNDER S. 271(1)(C) IS NOT ATTRACTED; MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. WHILE COMING TO THE AFORESAID DECISION, THE HONBLE APEX COURT CONSIDERED VARIOUS DECISIONS INCLUDING DILIP N. SHROFF VS. JCIT (2007) 210 CIT (SC) 228; UNION OF INDIA VS. DHARMENDRA TEXTILES PROCESSORS (2007) 212 CTR (SC) 432; UNION OF INDIA VS. RAJASTHAN SPINNING & WEAVING MILLS (2009) 224 CTR (SC) 1; CIT VS. ATUL MOHAN BINDAL (2009) 225 CTR (SC) 248) AND VARIOUS OTHER DECISIONS. THEREFORE, THE CASES RELIED UPON IN THE IMPUGNED ORDER AND ALSO CITED BY LD. SR. DR MAY NOT BE OF MUCH HELP TO THE REVENUE AS THE ASSESSEE WAS EXPECTING THAT THE AMOUNT WAS DEDUCTIBLE FROM THE INTEREST PAID BY THE BANK. 12 EVEN IF THE LD. ITO WAS NOT AGREEING WITH THE CLAIM OF THE ASSESSEE, AUTOMATICALLY DOES NOT TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS OR CONCEALMENT OF INCOME. THE ASSESSEE IS FURTHER FORTIFIED BY THE RATIO LAID DOWN BY THE HONBLE P & H HIGH COURT IN THE CASE OF CIT VS. AJAYB SINGH & CO. (253 ITR 630) WHEREIN IT WAS HELD THAT DISALLOWANCE OF EXPENSES WILL NOT PER SE AMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME, THEREFORE, IT IS NOT A FIT CASE WHERE PENALTY CAN BE LEVIED. RESULTANTLY, THIS APPEAL OF THE ASSESSEE IS ALLOWED. IN THE AFORESAID CASE, AN ELABORATE DISCUSSION HAS BEEN MADE BY THE BENCH BY CONSIDERING VARIOUS JUDICIAL PRONOUNCEMENT S INCLUDING FROM THE HONBLE APEX LIKE CIT VS. RELIANCE PETRO PRODUC TS P. LTD. (2010) 230 CTR (SC) 320 (SUPRA) WHEREIN THE HONBLE APEX C OURT CLEARLY HELD THAT MERE DISALLOWANCE OF CLAIM DOES NOT TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS OR CONCEALING OF INCOME. WHI LE COMING TO THIS CONCLUSION, THE HONBLE COURT CONSIDERED VARIOUS JU DICIAL PRONOUNCEMENTS WHICH HAVE ALREADY BEEN DELIBERATED UPON IN THE AFORESAID ORDER. IN THE PRESENT APPEAL SINCE TRUE FACTS WERE DULY DISCLOSED BY THE ASSESSEE IN ITS RETURN REGARDING I NCENTIVE BONUS RECEIVED BY THE ASSESSEE FROM HIS EMPLOYER, THEREFO RE, THE DISALLOWANCE MADE BY THE LEARNED ASSESSING OFFICER AUTOMATICALLY CANNOT LEAD TO THE CONCLUSION THAT EITHER THE ASSES SEE CONCEALED ITS INCOME OR FURNISHED INACCURATE PARTICULAR OF SUCH I NCOME, THEREFORE, 13 RESPECTFULLY FOLLOWING THE AFORESAID DECISION, THIS APPEAL OF THE ASSESSEE IS ALLOWED, FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2.6.2010. SD/- (JOGINDER SINGH) JUDICIAL MEMBER DATED: 2.6.2010 COPY TO: APPELLANT/RESPONDENT/CIT/CIT(A)/DR/GUARD F ILE D/-