DCIT, New Delhi V. M/s Jay Bharat Maruti Ltd., New Delhi

ITA 1878/DEL/2011

• Counselvise Citation: 187820114 RSA 2011
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 17-01-2012
• Assessment Year: 1995-1996
• Appeal Filed On: 18-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR
• Assessee Lawyers: R SANTHAN AM

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI B.C. MEENA ITA NO. 1878/DEL/2011 ASSTT. YR: 1995-96 DCIT CIR. 4(1), VS. M/S JAY BHARAT MARUTI LTD., NEW DELHI. NEEL HOUSE, LADO SARAI, OPPOSITE QUTAB MINAR, NEW DELHI. PAN/GIR NO. AAACJ2021K (APPELLANT) ( RESPONDENT ) APPELLANT BY : SHRI B.R.R. KUMAR SR. DR RESPONDENT BY : SHRI R. SANTHANAM ADV. O R D E R PER R.P. TOLANI, J.M : THIS IS REVENUES APPEAL AGAINST CIT (A)S ORDER D ATED 23-2- 2011RELATING TO A.Y. 1995-96. 2. SOLE GROUND RAISED IS DELETING THE PENALTY OF RS . 12,06,000/- LEVIED U/S 271(1)(C) QUA THE DEDUCTION U/S 80I, WHICH WAS NOT ALLOWED TO ASSESSEE. 3. LEARNED DR RELIED ON THE ORDER OF AO. 4. LEARNED COUNSEL FOR THE ASSESSEE CONTENDS THAT I N ITS RETURN OF INCOME THE ASSESSEE CLAIMED DEDUCTION U/S 80-I ON THE BASI S OF INCOME WHICH INCLUDED INTEREST INCOME FROM DEPOSITS MADE TO PROC URE BANK GUARANTEE AS MARGIN MONEY AND FOR OBTAINING LETTER OF CREDIT NEC ESSARY FOR IMPORTING RAW MATERIAL. THE INTEREST INCOME IN QUESTION WAS RELAT ABLE TO BUSINESS OF THE ASSESSEE. IN EARLIER YEARS ALSO DEDUCTION U/S 80-I WAS CLAIMED ON PROFITS AGAINST THIS AMOUNT. IN A.Y. 1995-96 CIT(A) HAD ALL OWED DEDUCTION U/S 80-I ON THIS INCOME. ON REVENUES APPEAL ITAT RELYING ON THE HONBLE SUPREME COURT JUDGMENT IN THE CASE OF PANDIAN CHEMICALS LTD . VS. CIT 262 ITR 278 HELD THE INCOME TO BE NON-INCLUDIBLE WHILE CALCULA TING DEDUCTION U/S 80-I. THUS, THE ISSUE ABOUT COMPUTATION OF DEDUCTION U/S 80-I IN RESPECT OF INTEREST 2 EARNED OUT OF DEPOSITS FOR PROCURING BANK GUARANTEE WAS CLEARLY DEBATABLE IN NATURE. 4.1. CIT(A), WHILE DELETING THE IMPUGNED PENALTY RE LIED ON VARIOUS JUDGMENTS INCLUDING HONBLE SUPREME COURT JUDGMENT IN THE CASE OF RELIANCE PETRO PRODUCTS 230 CTR 320 AND HELD THAT W HEN ALL THE RELEVANT DETAILS ARE FILED ALONG WITH THE RETURN ON AN ISSUE ANY VARIATION IN COME WILL NOT AMOUNT TO CONCEALMENT OR FURNISHING OF INACCURA TE PARTICULARS OF INCOME, DELETED THE PENALTY BY FOLLOWING OBSERVATIONS: 5.5. FROM THE DISCUSSION MADE ABOVE, IT CAN BE CON CLUDED THAT MERE DISALLOWANCE OR ADDITION WILL NOT BE SUFFICIE NT FOR LEVY OF PENALTY U/S 271(1)(C). THOUGH IT MAY BE ARGUED THAT NOT FILING CORRECT RETURN OF INCOME IS EQUAL TO FILING INCORR ECT RETURN OF INCOME AND THEREFORE THE ASSESSEE CAN BE SAID TO BE GUILTY OF FILING INACCURATE PARTICULARS OF INCOME BUT FOR LEV Y OF PENALTY U/S 271(1)(C) THIS STATUS IS NOT SUFFICIENT. THE AO HAS TO SHOW BY SOME POSITIVE MATERIAL WITH WHICH HE CAN COMPARE THAT WHAT WAS FILED BY THE ASSESSEE WAS INACCURATE OR WAS FAL SE LEADING TO THE INFERENCE THAT THE ASSESSEE HAS CONCEALED INCOM E OR FILED INACCURATE PARTICULARS OF INCOME. MERE DISALLOWANCE OR NOT ACCEPTING THE CLAIM OF THE ASSESSEE WILL NOT BE SUF FICIENT. WHETHER A CLAIM OF THE ASSESSEE IS ACCEPTED OR REJE CTED HAS NOTHING TO DO WITH FURNISHING OF INACCURATE PARTICU LARS OF INCOME; RAISING A LEGAL CLAIM, EVEN IF IT IS ULTIMA TELY FOUND TO BE LEGALLY UNACCEPTABLE, CANNOT AMOUNT TO FURNISHING O F INACCURATE PARTICULARS OF INCOME. IN VIEW OF THE ABOVE AND TAK ING INTO CONSIDERATION THE FACTS (A) THAT THE APPELLANT HAD DISCLOSED ALL MATERIAL FACTS AND (B) ON THE CLAIM OF APPELLANT TW O OPINIONS ARE POSSIBLE, I HOLD THAT THERE IS NO CASE OF CONCEALME NT OR FURNISHING OF INACCURATE PARTICULARS OF ITS INCOME. THEREFORE, IT IS HELD THAT AO WAS NOT JUSTIFIED IN IMPOSING PENAL TY U/S 271(1)(C) AMOUNTING TO RS. 12,06,000/-. ACCORDINGLY , THE SAME IS CANCELLED. 5. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE RELEVANT MATERIAL AVAILABLE ON RECORD. HONBLE SUPREME COURT IN THE CASE OF RELIANCE 3 PETRO PRODUCTS (SUPRA) HAS CLEARLY HELD TO THE EFFE CT THAT WHEN ALL THE DETAILS ABOUT COMPUTATION OF INCOME OR CLAIMING DEDUCTION A RE FURNISHED ALONG WITH RETURN, THE SAME DOES NOT AMOUNT TO FURNISHING OF I NACCURATE PARTICULARS OR CONCEALING THE PARTICULARS OF INCOME. IT EMERGES F ROM THE FACTS OF THE CASE THAT THE ISSUE ABOUT COMPUTATION OF DEDUCTION U/S 8 0-I/ 80-HHC IN RESPECT OF INTEREST EARNED OUT OF DEPOSITS FOR OBTAINING CC LIMIT, LC AND BANK GUARANTEE WAS DEBATABLE. IN ASSESSEES OWN CASE, IN THIS YEAR CIT(A) ALLOWED THE ASSESSEES CLAIM ABOUT 80-I AND ON REVE NUES APPEAL ITAT RELYING ON LATER JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF PANDIAN CHEMICALS LTD. (SUPRA) HELD THAT THE ASSESSEE WAS N OT ELIGIBLE FOR DEDUCTION U/S 80-I QUA THIS INCOME. SINCE THE DIVERGENCE OF VIEW IS APPARENT FROM THE FACTS, WE FIND MERIT IN THE ARGUMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ISSUE IN QUESTION WAS A SUBJECT MATTER OF JUDICIAL DEBATE AND THE ASSESSEE HAVING FURNISHED ALL THE RELEVANT FACTS AL ONG WITH THE RETURN OF INCOME AS CONTEMPLATED BY HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS, CIT(A) HAD RIGHTLY DELETED THE PENA LTY. IN VIEW OF THESE FACTS, WE HOLD THAT THE PENALTY HAS BEEN RIGHTLY DE LETED BY CIT(A). 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 13-02-2012. SD/- SD/- ( B.C. MEENA ) ( R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13-02-2012. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR 4