ITO, Ward-16(2), Hyderabad V. M/s Pennar Aluminum Company Limited, Hyderabad

ITA 1725/HYD/2012

• Counselvise Citation: 172522514 RSA 2012
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 30-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ADAGIRI
• Assessee Lawyers: V RAGHAVENDRA RAO
• Keywords: Revision of order; Wrong claim; Competent authority
• Section: 43B; 143(3); 27; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND S HRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.1725/HYD/2012 ASSESSMENT YEAR 2005-06. ITO, WARD-16(2), -V- M/S. P ENNAR ALUMINIUM COMPANY WARD-7(2), HYDERABAD. BEGUMPE T, HYDERABAD. PAN:AABCP8988Q (APPELLANT) (RESPONDENT) APPELLANT BY SHRI B. YADAGIRI RESPONDENT BY SHRI V. RAGHAVENDRA RAO DATE OF HEARING 09-01-2014 DATE OF PRONOUNCEMENT 05-02-2014 ORDER PER SAKTIJIT DEY, J.M: THIS APPEAL FILED BY THE DEPARTMENT IS DIRECTED A GAINST THE ORDER DATED 28-9-2012 OF CIT (A)-V, HYDERABAD PASSED IN ITA NO.0040/ITO- 16(2)/IT(A)-V/2011-12 PERTAINING TO THE ASSESSMENT YEAR 2005-06. 2. THE SOLE GRIEVANCE OF THE DEPARTMENT IN THE PR ESENT APPEAL IS WITH REGARD TO THE CIT (A) DELETING THE PENALTY IMP OSED U/S 271(1) (C) OF THE ACT. 3. BRIEFLY THE FACTS ARE, FOR THE IMPUGNED ASSESSME NT YEAR, THE ASSESSEE FILED ITS RETURN OF INCOME ON 28-10-2005 D ECLARING A LOSS OF RS.6,06,60,790/-. ASSESSMENT WAS COMPETED U/S 143 (3) OF THE ACT 2 ITA NO.1725 OF 2012 PENNAR ALUMINIUM COMPANY, HYD. VIDE ORDER DATED 28-12-2007 DETERMINING LOSS AT RS. 6,03,72,161/-. THE ASSESSMENT ORDER PASSED U/S 143(3) WAS SUBJECTE D TO PROCEEDINGS U/S 263 OF THE ACT BY THE CIT (A) IV, HYDERABAD. THE CIT WAS OF THE VIEW THAT THE ASSESSMENT ORDER PASS ED U/S 143(3) OF THE ACT WAS ERRONEOUS AND PREJUDICIAL TO THE INTERE ST OF REVENUE AS THE SALES TAX DEFERMENT OF RS.1,74,02,084/- FOR THE IMPUGNED ASSESSMENT YEAR WAS WELL BEYOND THE ELIGIBLE PERIO D. FURTHER THE SALES TAX DEBITED TO THE PROFIT AND LOSS ACCOUNT TO THE TUNE OF RS.23,75,134/- HAS TO BE DISALLOWED U/S 43B OF THE ACT AS NO EVIDENCE HAS BEEN PRODUCED BY THE ASSESSEE IN SUPPO RT OF REMITTANCE OF THE SAID AMOUNT INTO GOVERNMENT ACCOU NT. THE CIT ACCORDINGLY PASSED AN ORDER ON 26-3-2010 DIRECTING THE ASSESSING OFFICER TO MAKE THE ADDITION OF AN AMOUNT OF RS.1,9 8,37,216/- COMPRISING OF THE AFORESAID TWO ITEMS. IN CONSEQUE NCE OF THE ORDER PASSED BY THE CIT, THE ASSESSING OFFICER PASSED AN ORDER U/S 143(3) READ WITH SECTION 263 OF THE ACT ON 15-9-2010 BY M AKING ADDITION OF AMOUNT OF RS.1,98,37,216/- AS DIRECTED BY THE CI T. AS A RESULT OF WHICH, THE LOSS WAS REDUCED TO RS.4,05,45,943/-. A GAINST THE AFORESAID ASSESSMENT ORDER PASSED, ADMITTEDLY NO AP PEAL HAS BEEN PREFERRED BY THE ASSESSEE. THE ASSESSING OFFICER HO WEVER INITIATED PROCEEDINGS U/S 271(1)(C) OF THE ACT ALLEGING FURNI SHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE. DURING THE PENALTY PROCEEDINGS, IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED BY THE ASSESSING OFFICER THE ASSESSEE SUBMITTED HIS EX PLANATION CONTENDING THEREIN THAT THE ASSESSEE HAD BEEN FOLLO WING THE SAME ACCOUNTING PRINCIPLE I.E., ACCOUNTING STANDARD-6 WH ILE CLAIMING DEFERRED SALES TAX LIABILITY FROM THE EARLIER YEAR AND AS SUCH THERE IS NO CHANGE DURING THE IMPUGNED ASSESSMENT YEAR ALSO. THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAS FURNISHED INAC CURATE 3 ITA NO.1725 OF 2012 PENNAR ALUMINIUM COMPANY, HYD. PARTICULARS OF INCOME. THE ASSESSING OFFICER HOWEV ER REJECTING THE CONTENTION OF THE ASSESSEE PROCEEDED TO IMPOSE PENA LTY U/S 271(1)(C ) OF THE ACT VIDE ORDER DATED 28-3-2011 FO R AN AMOUNT OF RS.72,58,933. BEING AGGRIEVED OF THE ORDER PASSED IMPOSING PENALTY, THE ASSESSEE PREFERRED AN APPEAL BEFORE TH E CIT (A). THE CIT (A) DELETED PENALTY BY OBSERVING AS UNDER: 4.3 THE OBSERVATIONS OF THE ASSESSING OFFICER AND THE SUBMISSIONS ARE PERUSED. AS COULD BE SEEN FROM THE FACTS OF THE CAS E, THE CLAIMS OF THE APPELLANT COMPANY UNDER THE HEADS OF DEFERRED SALES TAX LIABILITY TO THE TUNE OF RS.L,74,62,084/-, UNDER SECTION 43B OF THE ACT FOR THE YEAR UNDER REFERENCE WAS DISALLOWED BY THE ASSESSING OFFICER H OLDING THAT THE ACCOUNTING METHODS FOLLOWED BY THE APPELLANT I.E. A S-6 AND NPV METHOD, IS NOT A CORRECT ACCOUNTING METHOD AND THE SAME IS NOT RECOGNIZED BY ANY ACCOUNTING STANDARDS. THE APPELLANT COMPANY WAS ALL OWED TO DEFER THE SALES TAX LIABILITY, BY THE GOVERNMENT OF MAHARASHTRA, FO R THE PERIOD OF 10 YEARS AND AS PER THE SAME . HE DEFERRED SALES TAX LIABILITY WAS TO BE PAID SUBSEQUENTLY AND THE APPELLANT WAS FOUND TO BE FULFILLING THE SAME, IN THE MANNER DESIGNED BY THEM, BUT FOLLOWED CONSISTENTLY.. THE METHOD ADOPT ED WAS SHOWN TO BE NPV, ON THE LINES OF AS-6 (ACCOUNTING STANDARD) AND THE LIA BILITY PERTAINING TO THE YEAR UNDER REFERENCE HAS BEEN QUANTIFIED AT RS.1,74,62,0 84/- AND THE SAME WAS CLAIMED AS EXPENDITURE. THE DETAILS PERTAINING TO THE SAME WERE SHOWN TO BE THE PART OF THE NOTES TO ACCOUNTING POLICIES AS FUR NISHED ALONG WITH RETURN OF INCOME. 4.4. AS COULD BE SEEN FROM THE OBSERVATION OF THE ASSESSING OFFICER IN THE ORDER APPEALED AGAINST, NO FINDING HAS BEEN GIVEN ON THE INACCURATE NATURE OF PARTICULARS, SO AS TO BE LIABLE TO PENALISE FOR THE CLAIM. THE ONLY GROUND TAKEN BY THE ASSESSING OFFICER WAS THAT THE ACCOUNTING METHO D (NPV) ADOPTED IS NOT RECOGNISED BY ANY ACCOUNTING STANDARD AND THE SAME IS NOT THE APPROPRIATE METHOD, FOR THE ISSUE OF SALES TAX DEFERRED. IT WA S ALSO OBSERVED BY THE ASSESSING OFFICER THAT, ACCOUNTING CANNOT OVERWRITE THE EXPIRY OF DEFERMENT BENEFIT AS GRANTED BY COMPETENT AUTHORITY. 4.5. AS REGARDS TO THE OBSERVATIONS MADE BY THE ASS ESSING OFFICER, TO COME TO THE CONCLUSION THAT ASSESSEE WAS HELD TO BE GUILTY F MISLEADING REVENUE, BY TAKING FALSE CLAIM UNDER NON APPLICABLE ACCOUNTING STANDARD, IT CAN BE HELD THAT THE SAID OBSERVATIONS BY THE ASSESSING OFFICER ARE LACKING STRENGTH, IN AS MUCH AS, THE PRACTICE OF PARTICULAR ACCOUNTING METHOD BY ITSELF CANNOT HELP IN DECIDING THE INTENTIONAL NATURE OF EVASION OF TAX. FURTHER, AS PER THE NOTIFICATION OF MAHARASHTRA GOVERNMENT, THE SALES TAX DEFERMENT SCH EME OF THE APPELLANT WAS 4 ITA NO.1725 OF 2012 PENNAR ALUMINIUM COMPANY, HYD. TO EXPIRE ON 30-11-2003 AND THE DEFERRED LIABILITY WAS TO BE REMITTED TO THE GOVERNMENT ACCOUNT, SO AS TO MAKE THE CLAIM UNDER S ECTION 43B. THE COMPLETE FACTS RELATED TO SUCH DEFERMENT AND SUBSEQUENT PAYM ENTS WERE NOT BROUGHT ON THE RECORD TO PROVE THAT THE PARTICULARS FURNISHED BY THE ASSESSEE IN THIS REGARD ARE INACCURATE, SO AS TO ATTRACT THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. AS INDICATED AND WERE NOT DISPUTED, THE PARTICULARS OF SUCH DETAILS WERE FURNISHED THROUGH THE NOTES ON THE ACCOUNTS, AS APPEARED IN T HE RETURN OF INCOME, THEREBY GIVING NO SCOPE FOR THE ALLEGATION THAT THE APPELLANT HAS NOT FURNISHED THE PARTICULARS. REGARDING THE INACCURATE NATURE OF THE PARTICULARS, THERE IS NO INFORMATION BROUGHT ON THE RECORD BY THE ASSESSING OFFICER, TO PROVE THAT THE INFORMATION FURNISHED BY THE ASSESSEE ARE REALLY IN ACCURATE. THE CONCLUSIONS DRAWN BY THE ASSESSING OFFICER WERE WHOLLY RELIED ON THE RELEVANCE OF METHOD OF ACCOUNTING ADOPTED BY ASSESSEE IN COMPUTATION OF TH E DEFERRED SALES LIABILITY. IF THAT IS THE CASE SO, THE BASIS ADOPTED BY THE ASSESSING OFFICER MAY ONLY BE JUSTIFIED IN MAKING THE ADDITIONS / DISALLOWANCES, BUT NOT IN LEVYING OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. SIMILAR IS THE CLAIM REGARDING THE SALES TAX LIABILITY OF RS.23,75,134/-, WHICH WA S DISALLOWED FOR WANT OF EVIDENCE, FOR REMITTING THE AMOUNTS IN TO GOVERNMEN T ACCOUNT. IN THIS CONTEXT, IT IS RELEVANT TO LOOK AT THE PROV ISIONS OF SECTION 271(1)(C) OF THE ACT, WHICH RUN AS UNDER: '271. (1) IF THE ASSESSING OFFICER OR THE COMMISSIONER (APPEA LS) OR THE COMMISSIONER IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON- (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURN ISHED INACCURATE PARTICULARS OF SUCH INCOME, OR AS COULD BE OBSERVED FROM THE LANGUAGE OF THE RELAT ED PROVISIONS, THE PRE-REQUISITES FOR LEVYING PENALTY UNDER SECTIO N 271(1)(C) OF THE ACT ARE A) CONCEALMENT OF PARTICULARS OF INCOME OR B) FURNISHI NG INACCURATE PARTICULARS OF SUCH INCOME. 4.6 PRIMA FACIE, THERE IS NO CONCEALMENT OF PARTICU LARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME, BY THE APPELLANT, IN THE CASE UNDER REFERENCE, SINCE THE ISSUE IS RELATED TO THE CLAIM OF PAYMENT OF DEFERRED SALES TAX AND SALES TAX, WHICH WERE NOT AC CEPTABLE TO THE ASSESSING OFFICER EITHER ON ACCOUNT OF THE ADOPTION OF PARTICULAR METHOD OF ACCOUNTING OR THE NON-FURNISHING THE PROOF FOR REMI TTANCE OF SALES TAX IN TO GOVERNMENT ACCOUNT. HOWEVER, IN EXPLAINING THE FACT MATERIAL TO THE COM PUTATION OF TOTAL INCOME, THE EXPLANATION OF THE ASSESSEE DECIDES THE . ISSUE. IN THIS CONTEXT, IT MAY BE RELEVANT TO REFER TO THE EXPLANA TION 1 TO SECTION 271(1)(C) OF THE ACT WHICH IS RELEVANT FOR THE FACT S OF THE CASE: THE SAME READ AS UNDER: 5 ITA NO.1725 OF 2012 PENNAR ALUMINIUM COMPANY, HYD. 'EXPLANATION 1.-WHERE IN RESPECT OF ANY FACTS MATERIAL TO THE CO MPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT,- (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMM ISSIONER (APPEALS) OR THE COMMISSIONER TO BE FALSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATI ON IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIA L TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING T HE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE PURP OSES OF CLAUSE (C) OF THIS SUB-SECTION, BE DEEMED TO REPRESENT THE INCOME IN R ESPECT TO WHICH PARTICULARS HAVE BEEN CONCEALED.' 4.7 AS COULD BE OBSERVED, PENAL PROVISIONS OF SECTI ON 271(1)(C) OF THE ACT (AS PER EXPLANATION - 1), ARE ATTRACTED, FOR TH E FOLLOWING REASONS: A) EITHER THE ASSESSEE FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER TO BE FALSE OR B) ASSESSEE OFFERS AN EXPLANATION WHICH IS NOT SUBSTA NTIATED AND FAIL TO PROVE THAT SUCH EXPLANATION IS BONAFIDE. IN THIS CASE, THE APPELLANT NEITHER FAILED TO OFFER EXPLANATION NOR THE EXPLANATION WAS FOUND OR PROVED TO BE FALSE, SINCE, THE ADDITION WAS ONLY RESULT OF THE REJECTION OF THE ACCOUNTING METHOD AD OPTED, WITH DETAILS OF THE INFORMATION FORMING PART OF THE NOTES TO ACCOUN TS. AS REGARD TO THE DEFERRED SALES TAX, THE LIABILITIES WERE FORMED PAR T OF THE ACCOUNTS AND REFLECTED IN RETURN OF INCOME, WITH THE DISPUTE ARO SE ONLY ON THE QUANTIFICATION OF LIABILITY WITH REFERENCE TO THE METHOD OF ACCOUNTI NG ADOPTED, BY THE APPELLANT WHICH WAS NOT ACCEPTABLE TO THE ASSESSING OFFICER. AS REGARD TO THE SALES TAX LIABILITY FOR THE YEAR U NDER REFERENCE, THE CLAIM WAS MADE IN THE RETURN OF INCOME WHOSE DETAIL S WERE SHOWN TO HAVE BEEN FURNISHED BY THE APPELLANT DURING THE COURSE O F ASSESSMENT PROCEEDINGS, BUT NOT CONSIDERED BY THE ASSESSING OF FICER, RESULTING IN THE ADDITIONS. THE ABSENCE OF INFORMATION, AS OBSERVED, MAY LEAD TO THE DISALLOWANCE, AND BY THAT ALONE MAY NOT LEAD TO THE LEVY OF PENALTY. 4.8 IN THIS CONTEXT, IT IS ALSO PERTINENT TO LOOK A T THE RATIO OF THE DECISION OF HON'BLE SUPREME COURT, IN THE CASE OF CIT VS. RE LIANCE PETRO PRODUCT (P) LIMITED, (2010) REPORTED IN 322 ITR 158. HON'BL E SUPREME COURT WHILE DEALING WITH THE ISSUE OF CLAIM OF EXPENDITURE OF I NTEREST IN RETURN OF INCOME HELD THAT, 'THE REVENUE ARGUED THAT SUBMITTING AN INCORRECT CL AIM IN LAW FOR THE EXPENDITURE ON INTEREST WOULD AMOUNT TO GIVING INACCURATE 6 ITA NO.1725 OF 2012 PENNAR ALUMINIUM COMPANY, HYD. PARTICULARS OF SUCH INCOME. SUCH CANNOT BE THE INTE RPRETATION 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 PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY ANY STRETCH IMAGINATION, MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT FURNISHING OF INACCURATE PARTICULARS'. FURTHER, VIDE THE SAID DECISION, THE HONBLE SUPREM E COURT WHILE DISTINGUISHING ITS OWN DECISION IN THE CASE OF DILI P N SHROFF, HAS RELIED 0 THE FACT WHETHER THE ASSESSEE HAS GIVEN ANY INACCUR ATE PARTICULARS, AN HELD THAT 'READING THE WORDS, 'PARTICULARS IN CONJECTURE MEANS THE DETAILS SUPPLIED IN RETURN, WHICH ARE NOT ACCURATE, NOT EXA CT OR CORRECT, ACCURATE TO TRUTH OR ERRONEOUS. SUCH NOT BEING THE CASE, THERE WOULD B NO QUESTION OF INVITING PENALTY UNDER SECTION 271(L )(C) OF THE ACT AN MERE MAKING OF THE CLAIM WHICH IS NOT SUSTAINABLE I N LAW, BY ITSELF, WILL AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDI NG INCOME OF THE ASSESSEE. SUCH CLAIMS MADE IN RETURN CANNOT AMOUNT TO INACCURATE PARTICULARS. 4.9 THUS, BASED ON THE FACTS OF THE CASE AND RATIO OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS RELIANC E PETRO PRODUCTS (P) LIMITED (SUPRA), I AM OF THE CONSIDERED OPINION THA T THE CLAIMS MADE BY THE APPELLANT WERE NOT PROVED TO BE FALSE AND THE P ARTICULARS FURNISHED IN RETURN FOR MAKING THE CLAIMS CANNOT BE TREATED A~ I NACCURATE PARTICULARS, SO AS TO ATTRACT THE PENAL PROVISIONS OF SECTION 27 1(1)(C) OF THE ACT. BASED ON SAME, IT IS HELD THAT THE PENALTY OF ~72,58,933/ -, LEVIED BY THE ASSESSING OFFICER FOR THE YEAR UNDER REFERENCE BASE D ON THE DISALLOWANCES MADE TOWARDS SALES TAX DEFERRED LIABILITY AND SALES TAX IS NOT SUSTAINABLE. ACCORDINGLY, THE PENALTY IS ORDERED TO BE DELETED / CANCELLED. 4. WE HAVE CONSIDERED THE SUBMISSION OF THE PARTIES AND PERUSED THE MATERIAL ON RECORD. AS CAN BE SEEN FROM THE AS SESSMENT ORDER PASSED U/S 143(3) READ WITH SECTION 263 OF THE ACT, THE ASSESSING OFFICER INITIATED PROCEEDINGS FOR IMPOSITION OF PE NALTY U/S 271(1)(C) OF THE ACT ALLEGING FURNISHING OF INACCURATE PARTIC ULARS OF INCOME BY THE ASSESSEE. IT IS FURTHER EVIDENT FROM MATERIALS ON RECORD, THE ASSESSEE IN THE COMPUTATION OF INCOME FILED ALONG W ITH RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR HAS CLAIMED DEFERMENT OF SALES TAX AS WELL AS DEDUCTION TOWARDS PAYMENT OF S ALES TAX. THE DEFERMENT OF SALES TAX HAS BEEN CLAIMED ON THE BASI S OF METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE FOR THE EARLIER YEAR WHICH HAS 7 ITA NO.1725 OF 2012 PENNAR ALUMINIUM COMPANY, HYD. ALSO BEEN MENTIONED IN THE NOTES TO ACCOUNTS FORMIN G PART OF THE AUDITED ACCOUNTS. IN THESE CIRCUMSTANCES, IT CANNO T BE SAID THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF IN COME. FURTHERMORE, ADMITTEDLY THE RETURN FILED BY THE ASS ESSEE WAS SUBJECTED TO SCRUTINY ASSESSMENT PROCEEDINGS U/S 14 3(3) OF THE ACT AND THE ASSESSING OFFICER COMPLETED THE ASSESSMENT ACCEPTING THE CLAIM MADE BY THE ASSESSEE TOWARDS DEFERRED SALES T AX REVENUE. SUBSEQUENTLY, HOWEVER THE CIT IN EXERCISE OF JURISD ICTION U/S 263 OF THE ACT REVISED THE ASSESSMENT ORDER ON THE GROUND THAT THE METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE IS NOT CORRE CT AND THEREFORE THE ASSESSEE IS NOT ENTITLED TO CLAIM DEFERMENT OF SALES TAX LIABILITY. HOWEVER, THERE IS NO DENYING THE FACT THAT THE SAME METHOD OF ACCOUNTING WAS CONSISTENTLY FOLLOWED BY THE ASSESSE E. THIS BEING THE FACT, WHEN THE ASSESSEE HAS SUBMITTED ALL MATER IAL FACTS BEFORE THE ASSESSING OFFICER, IT CANNOT BE SAID THAT THERE IS ANY WITHHOLDING OF INFORMATION OR FURNISHING OF INACCURATE PARTICUL ARS OF INCOME BY THE ASSESSEE. ONLY BECAUSE THE METHOD OF ACCOUNTING WAS NOT ACCEPTED BY THE CIT IN PROCEEDINGS U/S 263, IT AUTO MATICALLY CANNOT LEAD TO THE CONCLUSION THAT THE ASSESSEE HAS EITHER CONCEALED HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOM E. MORE SO, WHEN THE ASSESSING OFFICER WHILE COMPLETING THE ASS ESSMENT U/S 143(3) OF THE ACT HAS ACCEPTED THE METHOD OF ACCO UNTING FOLLOWED BY THE ASSESSEE FOR CLAIMING DEFERMENT OF SALES TAX . WITH REGARD TO CLAIM OF DEDUCTION TOWARDS PAYMENT OF SALES OF RS.2 3,75,134/- ALSO, THE ASSESSEE CANNOT BE ACCUSED OF CONCEALING HIS IN COME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME AS T HE DISALLOWANCE HAS BEEN MADE U/S 43B OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS NOT BEEN ABLE TO PRODUCE EVIDENCE TOWARDS REMI TTANCE OF THE AMOUNT TO THE GOVERNMENT TREASURY. 8 ITA NO.1725 OF 2012 PENNAR ALUMINIUM COMPANY, HYD. 5. ON GOING THROUGH THE ORDER OF THE CIT(A), RELEVA NT PARAGRAPHS OF WHICH HAVE BEEN EXTRACTED HEREINABOVE, IT IS TO BE NOTED THAT THE CIT (A) AFTER HAVING JUDICIOUSLY CONSIDERED ALL ASP ECTS OF THE MATTER AND CORRECTLY APPLYING THE RATIO LAID DOWN BY THE H ONBLE SUPREME COURT IN CASE OF CIT RELIANCE PETRO CHEMICALS (322 ITR 158) HAS DELETED THE PENALTY. THEREFORE, CONSIDERING THE TO TALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY REASO N TO INTERFERE WITH THE ORDER OF THE CIT (A) WHICH IS ACCORDINGLY UPHELD. 6. IN THE RESULT THE APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 05-02-2014. S D / - (B. RAMAKOTAIAH) ACCOUNTANT MEMBER S D / - (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED THE 5 TH FEBRUARY, 2014. JMR* COPY TO:- 1) THE ITO, WARD-16(2), HYDERABAD. 2) M/S PENNAR ALUMINIUM COMPANY LTD., 1-1-63/4/1, CHIK OTI GARDENS, BEGUMPET, HYDERABAD. 3) CIT (A)-V, HYDERABAD. 4) CIT-IV, HYDERABAD. 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABA D. 9 ITA NO.1725 OF 2012 PENNAR ALUMINIUM COMPANY, HYD.