ACIT, AKOLA CIRCLE, Akola V. THE NANDURA URBAN CO OP. BANK LTD., Buldhana

ITA 213/NAG/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4501 (ITAT-NAGPUR)
• Duration Of Justice: 3 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 19-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: U U KASAR
• Keywords: Bonafide belief; Non-deduction of tax; Bad and doubtful debts
• Section: 143(3); 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NO.213/NAG./2015 ( ASSESSMENT YEAR : 201011 ) ASSTT. COMMISSIONER OF INCOME TAX AKOLA CIRCLE, AKOLA APPELLANT V/S THE NANDURA URBAN CO. OPERATIVE BANK LTD. MAIN ROAD, NANDURA, DIST. BULDHANA PAN AAAT4639O .... RESPONDENT ASSESSEE BY : DR. JAYANT M. RANADE A/W SHRI VINAYAK SAOJI REVENUE BY : SHRI U.U. KASAR DATE OF HEARING 25.10.2018 DATE OF ORDER 26.10 .2018 O R D E R PER G. MANJUNATHA, A.M. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 31 ST MARCH 2015, PASSED BY THE LEARNED COMMISSIONER (APPEALS)I, NAGPUR, FOR THE ASSESSMENT YEAR 20101 1. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE EXTRACTED BELOW : I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(APPEALS) HAS ERRED IN DELETING THE PENA LTY U/S 271(L)(C) OF THE IT ACT OF RS. 39,90,272/-LEVIED BY THE ASSESSING OFFICER. (II) ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(APPEALS) HAS FAILED TO APPRECIATE THAT THE ASSE SSEE'S CLAIM OF 2 THE NANDURA URBAN CO OPERATIVE BANK LTD. DEDUCTION WAS CLEARLY UNTENABLE AND AS SUCH AMOUNTE D TO FURNISHING OF INCOME FIT FOR IMPOSITION OF PENALTY U/S 271(1)(C). (III) ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LD. CIT(APPEALS) HAS ERRED IN HOLDING THAT THE ISSUE OF CLAIM OF PROVISION OF BAD AND DOUBTFUL DEBTS ON ACCOUNT OF A CCRUED INTEREST ON NPA WAS A DEBATABLE ISSUE DISREGARDING THE FACT THAT THE HON'BLE SUPREME COURT HAD EXTINGUISHED THE DEBATE I N ITS DECISION IN THE CASE OF SOUTHERN TECHNOLOGIES LTD. 320 ITR 5 77 WHICH WAS MUCH BEFORE THE COMMENCEMENT OF RELEVANT ASSESSMENT YEAR. (IV) THE LD. CIT(APPEALS) HAS ERRED IN LAW IN HOL DING THAT THE ASSESSING OFFICER HAS NOT FOUND ANY INFIRMITY IN TH E INFORMATION GIVEN IN THE RETURN OF INCOME DISREGARDING THE FACT THAT THE ASSESSING OFFICER HAS GIVEN A CLEAR FINDING THAT TH E DEDUCTION WAS CLAIMED BY THE ASSESSEE FOR A MERE PROVISION AND TH E AMOUNT WAS NOT ACTUALLY WRITTEN OFF AS A BAD DEBT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FI LED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 201011 ON 13 TH OCTOBER 2010, DECLARING LOSS OF ` 37,07,600. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHO RT THE ACT ) ON 26 TH MARCH 2013, DETERMINING THE TOTAL INCOME OF ` 1,09,73,264, BY DISALLOWING PROVISIONS FOR BAD AND DOUBTFUL DEBT OF ` 1,29,23,500, BEING INTEREST ACCRUED ON NPA. THE ASSESSEE DID NOT FILE APPEAL AGAINST THE QUANTUM ADDITION MADE TOWARDS PROVISIONS FOR BA D AND DOUBTFUL DEBTS. THEREAFTER, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT FOR FURNISHING I NACCURATE PARTICULARS OF INCOME IN RESPECT OF DISALLOWANCE OF PROVISIONS FOR BAD AND DOUBTFUL DEBTS. ACCORDINGLY, HE ISSUED A SHOW CAUSE NOTICE A ND ASKED THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY SHOULD NOT BE LEVIED FOR 3 THE NANDURA URBAN CO OPERATIVE BANK LTD. FURNISHING INACCURATE PARTICULARS OF INCOME. IN RES PONSE TO THE NOTICE, THE ASSESSEE SUBMITTED THAT IT HAS FURNISHED NECESS ARY PARTICULARS IN RESPECT OF PROVISIONS FOR BAD AND DOUBTFUL DEBT IN RESPECT OF INTEREST ACCRUED ON NONPERFORMING ASSETS IN THE FINANCIAL S TATEMENT BUT CLAIMED BAD DEBT AS INTEREST ACCRUED ON NPA IS NOT RECEIVED DURING THE YEAR. THE ASSESSEE FURTHER CONTENDED THAT SINCE THE ASSESSEE HAS MADE PROVISIONS IN RESPECT OF ACCRUED INTEREST ON N PA, THE PROVISIONS OF SECTION 36(1)(VIIA) R/W SECTION 36(2) OF THE ACT ARE NOT APPLICABLE. THE ASSESSING OFFICER AFTER CONSIDERING THE RELEVAN T SUBMISSIONS OF THE ASSESSEE AND ALSO BY FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN DHARMENDRA TEXTILE PROCESSOR, [2008] 174 T AXMAN 571 (SC) HELD THAT THE ASSESSEE HAS FURNISHED INACCURATE PAR TICULARS OF INCOME IN RESPECT OF PROVISIONS FOR BAD DEBT IS HIGHLY DEB ATABLE AND TWO VIEWS ARE POSSIBLE, THEREFORE, MERELY FOR THE REASON THAT THE CLAIM IS NOT SUBSTANTIATED IS NOT A GROUND FOR LEVY OF PENALTY F OR FURNISHING INACCURATE PARTICULARS OF INCOME HAS NO MERIT AS PE R THE PROVISIONS OF SECTION 36(1)(VIIA) OF THE ACT, THERE IS NO AMBIGUI TY IN MAKING PROVISIONS FOR BAD AND DOUBTFUL DEBT. THE RELEVANT OBSERVATIONS OF THE ASSESSING OFFICER ARE EXTRACTED BELOW: 5. ASSESSEE'S ABOVE SUBMISSIONS HAVE BEEN CAREFULL Y CONSIDERED. SAME IS NOT ACCEPTABLE. FIRST AND FOREMOST ON THE P ERUSAL OF THE LEDGER OF THE BAD DEBT DEBITED BY ASSESSEE IT BECOM ES EVIDENT THAT THIS DEDUCTION OF BAD AND DOUBTFUL DEBTS IS ON LY A PROVISION AND NOT THE ACTUAL WRITE OFF OF BAD DEBTS. ASSESSEE BEING A NON 4 THE NANDURA URBAN CO OPERATIVE BANK LTD. SCHEDULE BANK PROVISIONS SEC 36(1) (VIIA) OF INCOME TAX ACT 1961 ARE APPLICABLE TO HIM, SEC 36(L)(VIIA) READS AS FOL LOWS:- '36(1) THE DEDUCTIONS PROVIDED FOR IN THE FOLLOW ING CLAUSES SHALL BE ALLOWED IN RESPECT OF THE MATTERS DEALT WITH T HEREIN, IN COMPUTING THE INCOME REFERRED TO IN SECTION 28 [(VIIA) 59[60 IN RESPECT OF ANY PROVISION FOR BA D AND DOUBTFUL DEBTS MADE BY (A) A SCHEDULED BANK [NOT BEING 61] A BANK INCORPOR ATED BY OR UNDER THE LAWS OF A COUNTRY OUTSIDE INDIA] OR A NON -SCHEDULED BANK 62[OR A COOPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTUR AL AND RURAL DEVELOPMENT BANK], AN AMOUNT 63[NOT EXCEEDING SEVEN AND ONE- HALF PER CENT] OF THE TOTAL INCOME (COMPUTED BEFORE MAKING ANY DEDUCTION UNDER THIS CLAUSE AND CHAPTER VIA) AND AN AMOUNT NOT EXCEEDING 64 [TEN] PER CENT OF THE AGGREGATE AVERAG E ADVANCES MADE BY THE RURAL BRANCHES OF SUCH BANK COMPUTED IN THE PRESCRIBED MANNER :' HENCE IT IS QUITE OBVIOUS THAT AS PER THE PROVISION S OF SEC 36(1) (VIIA) PROVISION FOR BAD AND DOUBTFUL DEBTS ARE ALL OWED ONLY AT THE RATE OF 7.5 % OF THE TOTAL INCOME BEFORE BEFORE MAK ING ANY DEDUCTION UNDER THIS CLAUSE AND CHAPTER VIA WHEREAS ASSESSEE HAS MADE THE PROVISION OF ENTIRE AMOUNT OF RS. 1292 3500/- WITHOUT TAKING INTO ACCOUNT THE PROVISIONS OF SEC 3 6(L)(VIIA), HENCE THIS DEDUCTION IS NOT ALLOWABLE BEING MERELY A PROV ISION FOR BAD AND DOUBTFUL DEBTS AND NOT AN ACTUAL WRITE OFF. FURTHER FOR THE SAKE OF ARGUMENT EVEN IF IT IS ASSU MED THAT THIS AMOUNT OF RS. 12923500/- IS NOT MERELY A PROVISION BUT ACTUAL WRITE OFF STILL THEN FOR MAKING ANY DEDUCTION FOR A BAD DEBT PROVISIONS OF SEC 36(2)(V) WILL APPLY SINCE ASSESSE E IS A BANK. AS PER THE PROVISIONS OF SEC 36(2)(V) WHICH READS AS F OLLOWS:- '36(2) IN MAKING ANY DEDUCTION FOR A BAD DEBT OR PA RT THEREOF THE FOLLOWING PROVISIONS SHALL APPLY (V) W HERE SUCH DEBT OR PART OF DEBT RELATES TO ADVANCES MADE BY AN ASSESSEE TO WHICH CLAUSE (VIIA) OF SUB-SECTION ( 1) APPLIES, NO SUCH DEDUCTION SHALL BE ALLOWED UNLESS THE ASSESSEE HAS DEBITED THE AMOUNT OF SUCH DEBT OR PAR T OF DEBT IN THAT PREVIOUS YEAR TO THE PROVISION FOR BAD AND DOUBTFUL DEBTS ACCOUNT MADE UNDER THAT CLAUSE. FURT HER SEC 36(L)(VII) READS AS UNDER: '36(1)(VII) SUBJECT TO THE PROVISIONS OF SUB-SECTIO N (2), THE AMOUNT OF 53[ANY 54BAD DEBT OR PART THEREOF54 5 THE NANDURA URBAN CO OPERATIVE BANK LTD. WHICH IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUN TS OF THE ASSESSEE FOR THE PREVIOUS YEAR]: [PROVIDED THAT IN THE CASE OF [AN ASSESSEE] TO WHIC H CLAUSE (VIIA) APPLIES, THE AMOUNT OF THE DEDUCTION RELATING TO ANY SUCH DEBT OR PART THEREOF SHALL BE LIMITED TO THE AMOUNT BY WHICH SUCH DEBT OR PART THEREOF EXCEEDS THE CREDIT BALANCE IN THE PROVISION FOR BAD AND DOUBTFUL DEBTS ACCOUNT MADE UNDER THAT CLAUSE.] THUS IT IS CLEAR THAT EVEN FOR THE ACTUAL WRITE OFF OF BAD DEBTS FIRST THE RESERVE FOR BAD AND DOUBTFUL DEBTS CREATED U/S 36(L)(VIIA) HAS TO BE DEBITED AND THEN ONLY THE REMAINING PART OF THE BAD DEBT CAN BE ALLOWED FOR WRITE OFF U/S 37(I)(VII) . THE ASSESSEE HAS NOT DONE THAT AND DIRECTLY DEBITED ENTIRE PROVISION S FOR BAD AND DOUBTFUL DEBTS IN P&L ACCOUNT WHICH IS NOT ALLOWED. 6. ASSESSEE'S CONTENTION THAT 'THIS NPA ADVANCE BEI NG A NON RURAL ADVANCES AND AS PER OUR CONTENTION THE BAD DEBT PRO VISIONS HAVING CLAIM LIMIT OF 7.5% OF PROFIT OR 10% OF RURA L ADVANCES BOTH ARE NOT APPLICABLE TO US AND IS ALLOWED IN FULL' IS INCORRECT . THE SEC 36(L)(VIIA) DOES NOT MAKE ANY DISTINCTION BETWE EN RURAL AND NON RURAL BAD AND DOUBTFUL DEBTS FOR THE PURPOSE OF CREATING THE RESERVE FOR BAD AND DOUBTFUL DEBTS AND HENCE IN THE CASE OF BANKS ANY BAD AND DOUBTFUL DEBTS BE IT RURAL ON NON RURAL HAVE TO BE WRITTEN OFF AS PER THE PROVISIONS OF SEC 36(2)(V) A ND 36(L)(VIIA). HENCE ASSESSEE'S CLAIM OF DEDUCTION OF RS.12923500/ - ON ACCOUNT OF PROVISION OF BAD AND DOUBTFUL DEBT IS REJECTED A ND IS ADDED BACK TO THE INCOME. 7. SINCE, THE ASSESSEE HAS ALREADY MADE PROVISION F OR OVERDUE AND DOUBTFUL DEBT IN THE FORM OF BAD AND DOUBTFUL D EBTS (NPA) OF RS 12923500/- DURING THE YEAR, THE ASSESSEE IS ENTI TLED TO DEDUCTION U/S.36(L)(VIIA) @ 7.5% OF THE INCOME TAX ACT, 1961 OF THE GROSS TOTAL INCOME BEFORE ALLOWING THIS DEDUCTI ON. ACCORDINGLY, THE DEDUCTION U/S.36(L)(VIIA) IS ALLOWED TO THE ASS ESSEE. AGGRIEVED BY THE PENALTY ORDER THE ASSESSEE PREFERR ED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3. BEFORE THE LEARNED COMMISSIONER (APPEALS), THE ASSES SEE HAS FILED ELABORATE WRITTEN SUBMISSIONS WHICH HAVE BEEN REPRODUCED AT 6 THE NANDURA URBAN CO OPERATIVE BANK LTD. PARA4.2 ON PAGE5 AND 6 OF THE LEARNED COMMISSIONE R (APPEALS)S ORDER. THE ARGUMENTS OF THE ASSESSEE BEFORE THE LEA RNED COMMISSIONER (APPEALS) ARE THAT IT HAS MADE PROVISI ONS FOR BAD AND DOUBTFUL DEBTS ON A BONAFIDE BELIEF THAT THE ASSESS EE IS ELIGIBLE FOR CLAIMING PROVISION FOR ACCRUED INTEREST ON NONPERF ORMING ASSET. HOWEVER, THE ASSESSING OFFICER REJECTED THE ACCEPTA NCES OF THE ASSESSEE AND MADE ADDITIONS, HENCE, THE SAME CANNOT BE CONSIDERED AS WILLFUL FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE LEARNED COMMISSIONER (APPEALS), AFTER CONSIDERING THE SUBMI SSIONS OF THE ASSESSEE AND ALSO RELIED UPON CERTAIN JUDICIAL PREC EDENTS INCLUDING THE DECISION OF THE HONBLE SUPREME COURT IN CIT V/S EL I LILY, HELD THAT THIS IS NOT A FIT CASE FOR LEVY OF PENALTY, AS PENALTY C AN BE LEVIED ONLY IF THERE NO GOOD AND SUFFICIENT REASON AS THE PENALTY CANNOT BE LEVIED FOR EACH AND EVERY ADDITIONS MADE IN THE ASSESSMENT PRO CEEDINGS. THE ASSESSEE HAS MADE A CLAIM, HOWEVER, THE ASSESSING O FFICER DID NOT ACCEPT THE CLAIM. MERE DISALLOWANCE OF THE UNSUBSTA NTIATED CLAIM CANNOT BE CONSIDERED AS FURNISHING INACCURATE PARTI CULARS OF INCOME. ACCORDINGLY, HE DIRECTED THE ASSESSING OFFICER TO D ELETE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. THE RELEVANT OB SERVATIONS OF THE LEARNED COMMISSIONER (APPEALS) ARE EXTRACTED BELOW: 5.4 IN THE CONTENTIONS RAISED BY THE A.R. OF THE A PPELLANT CARRIES SUBSTANTIAL FORCE IN AS MUCH AS FIRSTLY THAT, IT IS A MERELY A DISALLOWANCE OF CLAIM IN THE FORM OF EXPENDITURE MA DE IN THE 7 THE NANDURA URBAN CO OPERATIVE BANK LTD. RETURN OF INCOME; THEREFORE, THE RELEVANT INFORMATI ON HAS EMANATED FROM THE RETURN FILED, HENCE, DOES NOT AMO UNT TO CONCEALMENT. SECONDLY, THE LD. A.O. HAS NOT FOUND ANY INFIRMITY IN THE INFORMATION GIVEN IN THE RETURN OF INCOME FILED BY THE APPELLANT, THUS, IT BEING NOT A CASE THAT THE STATEMENT OR INF ORMATION SUPPLIED BY THE APPELLANT WAS FOUND FACTUALLY INCOR RECT, THEREFORE, PRIMAFACIE, THE ASSESSEE CANNOT BE CONSIDERED GUIL TY FOR HAVING GIVEN INACCURATE PARTICULARS. THIRDLY, THAT THERE E XISTS DIVERSE VIEWS ON THE ALLOWABILITY OR OTHERWISE OF THE CLAIM OF PROVISION FOR BAD AND DOUBTFUL DEBTS ON ACCOUNT OF INTEREST ACCRU ED ON NPA. THEREFORE, THE ISSUE BEING HIGHLY DEBATABLE FALLS O UTSIDE THE AMBIT OF LEVY OF CONCEALMENT PENALTY. FOURTHLY, THAT THE LD. A.O. HAS NOT BROUGHT OUT ANY EVIDENCE ON RECORD TO DEMONSTRATE T HAT THE APPELLANT HAD FURNISHED INACCURATE PARTICULARS. FIF THLY, THAT MERELY BECAUSE THE ASSESSEE HAS NOT CHALLENGED THE ADDITIO N MADE IN THE FURTHER APPEAL CANNOT BE A GROUND TO INFER THAT THE ASSESSEE HAD CONFESSED THE CONCEALMENT, WHEREAS THE FACT REMAINS THAT THE APPELLANT HAS, IN FACT, CHALLENGED THE ADDITIONS MA DE BY FLING A REVISION PETITION U/S 264 OF THE ACT, WHICH, THOUGH HAS BEEN REJECTED BY EH APPELLANT HAS CONTENDED THAT IT WOUL D CHALLENGE THE SAME IN APPEAL. 5.5 THE RATIO OF THE JUDGMENTS IN THE CASE OF DHAR MENDRA TEXTILE PROCESSORS [2008] 174 TAXMANN 571 (SC) RELIED UPON BY THE APPELLANT IS NOT APPLICABLE TO THE FACTS AND CIRCUM STANCES OF THE PRESENT CASE OF THE APPELLANT, AS IT BEING PRIMAFA CIE NOT A CASE OF CONCEALMENT OR HAVING FURNISHED ANY INACCURATE P ARTICULARS OF INCOME. ON THE CONTRARY, THE DECISION OF CIT V/S EL I LILY OF SC IS APPLICABLE, IN WHICH HAS HAS LAID DOWN THAT 'HOWEVER, LEVY OF PENALTY U/S 271(L)(C) IS NOT MANDATORY O R COMPENSATORY OR AUTOMATIC. PENALTY CAN BE LEVIED ONLY IF THERE I S NO GOOD AND SUFFICIENT REASON FOR THE FAILURE TO DEDUCT TAX AT SOURCE. ON FACTS, AS THE ISSUES WERE CONTROVERSIAL AND THE ASSESSEE A CTED BONAFIDE, PENALTY COULD NOT BE IMPOSED.' 5.6 ON CAREFUL EXAMINATION OF THE MATERIAL FACTS AV AILABLE ON RECORD AND THE RATIO LAID DOWN IN VARIOUS JUDICIAL DECISIONS RELIED UPON BY THE AR OF THE APPELLANT AS MENTIONED ABOVE, I AM OF THE CONSIDERED OPINION THAT THIS IS NOT A FIT CASE FOR THE LEVY OF CONCEALMENT OR HAVING FURNISHED INACCURATE PARTICUL ARS OF INCOME. THEREFORE, THE PENALTY LEVIED U/S 271(1) (C) IS DIR ECTED TO BE DELETED. 8 THE NANDURA URBAN CO OPERATIVE BANK LTD. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED T HAT THE LEARNED COMMISSIONER (APPEALS) ERRED IN DELETING TH E PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT WITHOUT APPRECIA TING THE FACT THAT THE CLAIM OF DEDUCTION WAS CLEARLY UNTAINABLE AND A S SUCH IT AMOUNTED TO FURNISHING OF INACCURATE PARTICULARS OF INCOME W HICH IS LIABLE FOR IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF TH E ACT. 5. ON THE OTHER HAND, THE LEARNED AUTHORISED REPRESENT ATIVE FOR THE ASSESSEE STRONGLY SUPPORTED THE ORDERS OF THE LEARN ED COMMISSIONER (APPEALS). 6. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MAT ERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER LEVIED P ENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME IN RESPECT OF DISA LLOWANCE OF PROVISIONS FOR BAD AND DOUBTFUL DEBT IN RESPECT OF ACCRUED INTEREST ON NPA. THE ISSUE OF TAXABILITY OF INTEREST ACCRUED ON NPA IS HIGHLY DEBATABLE AND ALWAYS TWO VIEWS ARE POSSIBLE. WHEN T HE ISSUE IS HIGHLY DEBATABLE AND TWO VIEWS ARE POSSIBLE ON THE INTERPR ETATION OF TAXABILITY, THE QUESTION OF INVOKING PROVISIONS OF SECTION 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF IN COME DOES NOT ARISE. MORE PARTICULARLY WHEN THE ASSESSEE HAS DISCLOSED N ECESSARY FACTS IN HIS FINANCIAL STATEMENT. IN THIS CASE, THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT DISCLOSURE OF PRIMARY FACTS IN RESPEC T OF INTEREST ACCRUED 9 THE NANDURA URBAN CO OPERATIVE BANK LTD. ON NPA AND CLAIM FOR PROVISIONS OF BAD DEBT ON SUCH INTEREST IN ITS FINANCIAL STATEMENT. THE ASSESSEE ALSO EXPLAINED TH E REASON FOR CLAIMING PROVISIONS FOR BAD DEBT IN RESPECT OF INTE REST ACCRUED ON NPA. THE ASSESSING OFFICER NEITHER MADE OUT A CASE OF DE LIBERATE ATTEMPT MADE TO FURNISH INACCURATE PARTICULARS OF INCOME NO R REJECTED THE EXPLANATION OF THE ASSESSEE THAT THE ISSUE IS HIGHL Y DEBATABLE AND THERE IS ALWAYS TWO VIEWS ARE POSSIBLE IN VIEW OF V ARIOUS DECISIONS OF THE COURTS AND TRIBUNAL. THEREFORE, WHEN PRIMARY FA CTS ARE DISCLOSED IN THE FINANCIAL STATEMENTS REGARDING THE CLAIM, ME RE DISALLOWANCE OF SUCH CLAIM BY NOT ACCEPTING EXPLANATION OF THE ASSE SSEE DOES NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF I NCOME. THIS LEGAL POSITION IS SUPPORTED BY THE DECISION OF THE HONBL E SUPREME COURT IN CIT V/S RELIANCE PETROPRODUCTS PVT. LTD. [2010] 322 ITR 158 (SC). IT WAS FURTHER SUPPORTED BY THE DECISION OF THE HONBL E MADRAS HIGH COURT IN CIT V/S BLUE STAR LTD., [2013] 357 ITR 669 (MAD.). THE LEARNED COMMISSIONER (APPEALS) AFTER CONSIDERING RE LEVANT SUBMISSIONS AND ALSO BY FOLLOWING THE DECISION OF T HE HONBLE SUPREME COURT IN RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA) H AS RIGHTLY DELETED THE PENALTY LEVIED BY THE ASSESSING OFFICER. WE DO NOT FIND ANY ERROR IN THE FINDINGS OF THE LEARNED COMMISSIONER (APPEALS) AND, HENCE, WE ARE INCLINED TO UPHOLD THE FINDINGS OF THE LEARNED COMM ISSIONER (APPEALS) AND DISMISS THE GROUND RAISED BY THE REVENUE. 10 THE NANDURA URBAN CO OPERATIVE BANK LTD. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26.10.2018 SD/- SANDEEP GOSAIN JUDICIAL MEMBER SD/- G. MANJUNATHA ACCOUNTANT MEMBER NAGPUR, DATED: 26.10.2018 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, NAGPUR CITY CONCERNED; (5) THE DR, ITAT, NAGPUR; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (A.R./SR. P.S./P.S.) ITAT, NAGPUR