SHOPPERS STOP LTD, MUMBAI V. ACIT CEN CIR 29, MUMBAI

ITA 2213/MUM/2013

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6789 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 20-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D G
• Keywords: Revised return
• Section: 271(1)(c); 143(3); 274; 27

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL E BENC H MUMBAI BEFORE SHRI G. S. PANNU, VICE- PRESIDENT AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.2213/MUM/2013 (ASSESSMENT YEAR 2009-10) SHOPPERS STOP LTD. EUREKA TOWERS, B-WING, 9 TH FLOOR, MINDSPACE, LINK ROAD, MALAD (WEST), MUMBAI-400064. P AN: AABCS4383A VS. ACIT, CENTRAL CIRCLE -29 AAYAKAR BHAVAN, MUMBAI. APPELLANT RESPONDENT APPELLANT BY : SHRI VIJAY MEHTA (AR) RESPONDENT BY : SHRI D.G. PANSARI (DR) DATE OF HEARING : 24.01.2019 DATE OF PRONOUNCEMEN T : 28.02.2019 ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY ASSESSEE UNDER SECTION 253 OF THE IN COME-TAX ACT (THE ACT) IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIO NER OF INCOME-TAX-40, MUMBAI (THE LD. CIT(A), WHICH IN TURN ARISES FROM T HE PENALTY LEVIED BY ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE AC T DATED 28.06.2012 FOR ASSESSMENT YEAR 2009-10. THE ASSESSEE HAS RAISED TH E FOLLOWING GROUNDS OF APPEAL: 1.1 IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A) ERRED BOTH IN FACTS AND IN LAW IN SUSTAINING THE PE NALTY OF RS. 1,88,99,163/- TOWARDS FURNISHING INACCURATE PARTICULARS WITH RESP ECT OF SERVICE TAX PROVISION. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-COMPA NY IS IN THE BUSINESS OF OPERATING RETAILS SALES OUTLETS ALL OVER THE COUNTR Y. THE ASSESSEE FILED ITS ITA NO. 2 213 MUM 2013-SHOPPERS STOP LTD. 2 RETURN OF INCOME FOR ASSESSMENT YEAR 2009-10 ON 29. 09.2009 DECLARING LOSS OF RS. 13.26 CRORE. THE RETURN OF INCOME WAS S ELECTED FOR SCRUTINY. THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER DISALLOWED PROVISION FOR SERVICE TAX OF RS. 5,56,02,128/- CLAI MED UNDER THE HEAD MISCELLANEOUS EXPENSES VIDE ASSESSMENT ORDER DATE D 26.12.2011 UNDER SECTION 143(3). THE ASSESSING OFFICER INITIATED PEN ALTY UNDER SECTION 271(1)(C). NO FURTHER APPEAL WAS FILED BY ASSESSEE AGAINST SUCH DISALLOWANCE. 3. THE ASSESSING OFFICER INITIATED THE PENALTY UNDER S ECTION 271(1)(C) OF THE ACT. NOTICE UNDER SECTION 274 RWS 271(1)(C) DATED 26.2.2011 WAS SERVED UPON THE ASSESSEE. THE ASSESSEE FILED ITS REPLY DAT ED 01.06.2012. IN THE REPLY, THE ASSESSEE CONTENDED THAT ASSESSEE MADE TO TAL PROVISION OF RS. 5.56 CRORE WHICH INCLUDES RS. 3.25 CRORE FOR PROVIS ION OF SERVICE TAX WRITE OFF ON STORE LEASE RENTAL PAID BY ASSESSEE TO LANDLORDS UPTO 31.03.2009 FOR LOCATIONS WHERE RESPECTIVE STATE HIG H COURT STAYED THE ORDER ON PAYMENT OF SERVICE TAX ON RENTAL WAS EITHE R AWAITED OR REJECTED BY THE HONBLE HIGH COURT. THE ASSESSEE HAS TAKEN V IEW THAT RECOVERY OF SERVICE TAX PAID TO LANDLORD MAY NOT REALIZED DUE T O LITIGATIONS AND NON- RECEIVING FINAL FAVORABLE ORDER FROM THE HONBLE SU PREME COURT AND THEREAFTER THROUGH THE COMPLEX PROCESS OF APPLYING THE REFUND FROM SERVICE TAX DEPARTMENT AND PAYMENT FROM THEM TO LAN DLORD. THE ASSESSEE INADVERTENTLY NOT SPECIFIED THESE AMOUNTS AS INCLUD ED IN THE TOTAL ITA NO. 2 213 MUM 2013-SHOPPERS STOP LTD. 3 PROVISION OF RS. 5.56 CRORE AT THE TIME OF ASSESSME NT AS IT WAS NEVER ANTICIPATED FOR PENALTY UNDER SECTION 271(1). AS TH ERE WAS NO TAXABLE PROFIT AS PER RETURN FOR THIS A.Y. EVEN AFTER CONSI DERING THE DISALLOWANCE OF RS. 5.56 CRORE AS THERE WAS LOSS AND NO TAX WAS PAYABLE. THERE WAS NO LOSS OF REVENUE TO EXCHEQUER AT THE SAME TIME THE S AID DISALLOWANCE WAS NOT RESULTING INTO ANY TAX PAYMENT BY ASSESSEE. THE ASSESSEE REVERSED THE SAID PROVISION IN THE NEXT FINANCIAL YEAR AND OFFER ED TO TAX. THE ASSESSEE FURTHER CONTENDED THAT THE NET EXCESS PROVISION IS ONLY RS. 1.37 CRORE (RS. 5.56 CRORE RS. 0.94 CRORE = RS. 3.25 CRORE) WHICH IS ONLY 25% OF TOTAL PROVISION. THE ASSESSEE ALSO CONTENDED THAT THERE W AS NO CONCEALMENT OF INCOME. THE ASSESSEE REVERSED THE EXCESS PROVISION IN THE NEXT FINANCIAL YEAR. NO REVISED RETURN WAS FILED AS IT WAS TAX NEU TRAL AND THERE WERE LOSSES IN A.Y. 2009-10. THERE WAS A BONAFIDE REASON AND IN PAST THERE WAS NO INCIDENT OF PENALTY. THE REPLY OF ASSESSEE W AS NOT ACCEPTED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER CONCLUDED THAT THE HONBLE HIGH COURT VIDE ORDER DATED 18.06.2009 HELD THAT RE NTING OF IMMOVABLE PROPERTY FOR USE IN THE COURSE OF FURTHERANCE OF BU SINESS OR COMMERCE BY ITSELF DOES NOT ENTAIL ANY VALUE ADDITION AND THERE FORE, CANNOT REGARDED AS A SERVICE. IN THE LIGHT OF ORDER OF DELHI HIGH COUR T, THE ASSESSEE WAS NOT LIABLE TO PAY ANY SERVICE TAX TO THE LANDLORD. THER EFORE, THE ASSESSEE OUGHT TO HAVE REDUCED THE SAID PROVISION IN THE YEAR IN W HICH IT WAS PROVIDED AND NOT IN ANY SUBSEQUENT ASSESSMENT YEAR. ITA NO. 2 213 MUM 2013-SHOPPERS STOP LTD. 4 4. THE ASSESSING OFFICER LEVIED THE PENALTY @ 100% OF THE TAX SOUGHT TO BE EVADED ON DISALLOWANCE OF RS. 5.66 CRORE. ON APPEAL BEFORE THE LD. CIT(A), THE ACTION OF ASSESSING OFFICER WAS UPHELD. THUS, FURTHER AGGRIEVED BY THE ORDER OF LD. CIT(A), THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 5. WE HAVE HEARD THE SUBMISSION OF LD. AR OF THE ASSES SEE AND LD. DR FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON R ECORD. WE HAVE DELIBERATED ON VARIOUS CASE LAW RELIED BY LOWER AUT HORITY. THE LD. AR OF THE ASSESSEE SUBMITS THAT ASSESSEE IS IN THE BUSINE SS OF OPERATING RETAIL SALES OUTLETS ALL OVER THE COUNTRY. THE ASSESSEE HA S TAKEN A NUMBER OF PREMISES, THROUGH WHICH THE ASSESSEE OPERATES, ARE TAKEN ON LEASE FOR WHICH RENTAL EXPENSES ARE BEING INCURRED. APART FRO M THE RENT OF THE PREMISES, THE ASSESSEE ALSO PAYS AMENITY CHARGES TO THE LANDLORD AS WELL AS APPLICABLE SERVICE TAX. THE PAYMENT OF SERVICE T AX WOULD, HOWEVER, ENTITLE THE ASSESSEE TO CLAIM THE SET OFF AGAINST I TS OWN LIABILITY OF PAYMENT OF SERVICE TAX. THEREFORE, THE SERVICE TAX PAID TO LANDLORDS IS NOT DEBITED TO P & L A/C AND THE SAME IS A BALANCE SHEE T ITEM. DURING THE RELEVANT PREVIOUS YEAR, THE ASSESSEE HAS PAID RENT AS WELL AS SERVICE TAX THEREON TO THE RESPECTIVE LANDLORDS. HOWEVER, SUBSE QUENT TO THE CLOSE OF THE FINANCIAL YEAR, ON 18.04.2009, THE HON'BLE DELH I HIGH COURT PASSED A JUDGMENT HOLDING THAT SERVICE TAX IS NOT APPLICABLE ON RENT. AT THE SAME TIME, IT WAS HELD THAT THE SERVICE TAX WOULD BE APP LICABLE ON THE AMENITY ITA NO. 2 213 MUM 2013-SHOPPERS STOP LTD. 5 CHARGES. PURSUANT TO THIS ORDER, THERE WAS AN UNCER TAINTY REGARDING THE PAYMENT OF SERVICE TAX AND ITS CLAIM FOR SET OFF VI S-A-VIS SERVICE TAX DEPARTMENT. THE RECOVERIES OF SERVICE TAX ON RENT A LREADY PAID TO THE LANDLORDS WERE DOUBTFUL. 6. IT WAS EXPLAINED THAT AT THE SAME TIME, THE SERVICE TAX DEPARTMENT WOULD REFUSE TO GRANT THE SET OFF IN RESPECT OF SUCH PAYM ENTS. THE ISSUE WAS ALSO PENDING BEFORE OTHER HIGH COURTS AND LATER THE MATT ER WAS TAKEN UP TO THE APEX COURT. DUE TO SUCH UNCERTAINTY AND LACK OF CLA RITY ON THE ISSUE, THE ASSESSEE HAS MADE A PROVISION IN ITS BOOKS OF ACCOU NT FOR THE YEAR UNDER CONSIDERATION. THE LD AR FOR THE ASSESSEE HAS SHOWN US THE FOLLOWING DETAILS OF BREAK-UP OF THE PROVISION; SR NO. PARTICULARS AMOUNTS (IN CRORE) 1 SERVICE TAX ON LEASE RENT AS PER HIGH COURT ORDER 3.25 2 SERVICE TAX ON AMENITIES ACTUALLY PAID IN SUBSEQUEN T YEARS 0.94 3 VARIATION DUE TO ESTIMATION 1.37 TOTAL 5.56 7. THE AFORESAID PROVISION WAS DISALLOWED BY ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER UNDER SECTION 143(3) O F THE ACT. DURING THE PENALTY PROCEEDING, THE ASSESSEE HAS JUSTIFIED MAKI NG OF PROVISION AND EXPLAINED THAT THE AMOUNT OF RS. 3.2 CRORE WAS PROV IDED BECAUSE OF UNCERTAINTY OF SERVICE TAX RECOVERY FROM THE LANDLO RD. CERTAIN PAYMENTS OF AMENITIES CHARGES AVAILED DURING THE RELEVANT PR EVIOUS YEAR WERE ITA NO. 2 213 MUM 2013-SHOPPERS STOP LTD. 6 OUTSTANDING. THE PROVISION FOR SERVICE TAX ON SUCH AMENITIES (AS UPHELD BY THE HONBLE HIGH COURT) WAS MADE DURING THE YEAR UNDER CONSIDERATION. THE ACTUAL PAYMENT MADE IN SUBSEQUEN T FINANCIAL YEAR WERE FURNISHED TO THE ASSESSING OFFICER JUSTIFYING THE PROVISION OF RS. 0.94 CRORE AND THE BALANCE OF RS. 1.37 CRORE WAS DU E TO VARIATION IN ESTIMATION. DUE TO NATURE OF PREVAILING CONFUSION T HE MISMATCH OF FIGURE WAS QUITE OBVIOUS. THE LD. AR FURTHER SUBMITS THAT DURING THE NEXT ASSESSMENT YEAR, THE ASSESSEE OBTAINED ASSURANCE FR OM CERTAIN LANDLORD REGARDING REFUND OF SERVICE TAX, AND, THEREFORE, TH E PROVISION WAS REVERSED AND THE AMOUNT WAS OFFERED FOR THE PURPOSE OF TAX. LATER ON WHEN THE ASSESSING OFFICER MADE THE ADDITION/DISALLOWANCE IN THE YEAR UNDER CONSIDERATION, THE ASSESSEE FILED REVISED RETURN OF INCOME AND PRAYED THE ASSESSING OFFICER NOT TO TAX THE AMOUNT IN BOTH THE YEARS. THE REQUEST OF ASSESSEE WAS ACCEPTED AND NO ADDITION WAS MADE IN A SSESSMENT YEAR 2010-11, COPY OF THE ASSESSMENT ORDER UNDER SECTION 143(3) OF THE ACT DATED 24.01.2013 IS FILED. 8. THE LD. AR FURTHER SUBMITS THAT THE ASSESSEE HAS DE CLARED A LOSS OF RS. 13.26 CRORE IN ITS RETURN OF INCOME AND BY CLAIMING THE DEDUCTION, THE TAX LIABILITY OF THE ASSESSEE WAS NOT REDUCED. THE ASSE SSING OFFICER WHILE PASSING THE ASSESSMENT ORDER HAS REJECTED THE EXPLA NATION IN RESPECT OF AMOUNT OF RS. 3.25 CRORE, HOWEVER, NO COMMENT WAS M ADE IN RESPECT OF RS. 0.94 CRORE AND RS. 1.37 CRORE. ACCORDING TO ASS ESSING OFFICER, THE ITA NO. 2 213 MUM 2013-SHOPPERS STOP LTD. 7 REVERSAL OF PROVISION IN ASSESSMENT YEAR 2010-11 HA S NO LOGIC. THE ASSESSING OFFICER ALSO HELD THAT JUDGMENT OF HONBL E DELHI HIGH COURT WAS AVAILABLE ON 18.04.2009 AND THEREFORE, THE ASSE SSEE SHOULD NOT HAVE MADE THE PROVISION OF BOOK FOR F.Y. 2008-09. THE LD . CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER ON SIMILAR LINE . THE LOWER AUTHORITIES MISDIRECTED THEMSELVES IN NOT CONSIDERING CORRECT C HRONOLOGY OF EVENTS. THE LD. AR SUBMITS THAT THE ORDER OF HONBLE DELHI HIGH COURT WAS PASSED ON 18.-4.2009. THE FINANCIAL FOR THE YEAR EN DED ON 31.03.2009 WERE SIGNED ON 29.04.2009 ON THE BASIS OF DELHI HIG H COURT ORDER AND THE PROVISION WAS CREATED. THE RETURN OF INCOME FOR ASS ESSMENT YEAR 2009- 10 WAS FILED ON 29.09.2009. ON 10.11.2009, A LETTER WAS RECEIVED FROM ONE OF THE LANDLORD ASSURING THAT THE SERVICE TAX W ILL BE REFUNDED SUBJECT TO CONDITION. ON 28.04.2010, THE ACCOUNTS FOR YEAR ENDED ON 31.03.2010 WERE SIGNED WHEREIN THE PROVISION CREATED IN PREVIO US YEAR WAS REVERSED. RETURN OF INCOME FOR ASSESSMENT YEAR 2010-11 WAS FI LED ON 27.09.2010 WHEREIN THE REVERSAL WAS OFFERED TO TAX. THUS, THE LD. AR OF THE ASSESSEE EXPLAINED THAT PROVISION OF SERVICE TAX WAS MADE PU RSUANT TO DELHI HIGH COURT DECISION. REVERSAL OF PROVISION HAS NOT BEEN MADE PURSUANT TO THE DELHI HIGH COURT JUDGMENT. THE LOWER AUTHORITIES HA VE UNDERSTOOD THIS FACT AS IF THIS REVERSAL OF PROVISION WAS MADE PURS UANT TO THE DELHI HIGH COURT ORDER. THE AMOUNT HAS BEEN OPENLY CLAIMED AND NO ASPECT OF IT WAS CONCEALED OF OR HIDDEN, THE ASSESSEE MADE IT CLEAR THAT IT HAD MADE A ITA NO. 2 213 MUM 2013-SHOPPERS STOP LTD. 8 PROVISION BASED ON ESTIMATE AND NOT A CASE OF ACTUA L PAYMENT, THIS WAS A CASE OF BONAFIDE ESTIMATION OF LIABILITY AND NOT OF FURNISHING OF INACCURATE PARTICULAR OF INCOME, THEREFORE, NO PENALTY IS LEVI ABLE UNDER SECTION 271(1)(C). 9. IN ALTERNATIVE AND WITHOUT PREJUDICE SUBMISSION, TH E LD. AR SUBMITS THAT PENALTY NOTICE ISSUED BY ASSESSING OFFICER UNDER SE CTION 274 R.W.S. 271(1)(C) IS INVALID AS PARTICULAR LIMB OF THE NOTI CE HAS NOT BEEN STUCK OFF. IN SUPPORT OF HIS SUBMISSION, THE LD. AR OF THE ASS ESSEE RELIED ON THE DECISION OF TRIBUNAL IN ORBIT ENTERPRISES VS. ITO ( ITA NO. 1596 & 1597/MUM/2014 DATED 01.09.2017). 10. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPPO RTED THE ORDER OF LOWER AUTHORITIES. THE LD. DR FURTHER SUBMITS THAT ASSESSEE ACTUALLY CLAIMED EXPENSES IN THE RETURN OF INCOME WHICH IS N OT ALLOWABLE. NO APPEAL WAS FILED AGAINST THE ADDITION IN THE QUANTU M ASSESSMENT. THERE WAS NO BONAFIDIES IN THE EXPLANATION OFFERED BY THE ASSESSEE. THE ASSESSEE IS A PUBLIC LIMITED COMPANY AND SUPPOSED T O FINALIZE THE ACCOUNTING EVERY THREE MONTHS. NO ESTIMATION OF EXP ENSES IS ALLOWABLE. SO FAR AS NON-STRIKING OF LIMBS IN THE NOTICE UNDER SECTION 274 R.W.S. 271(1)(C) IS CONCERNED, IT IS ONLY PROCEDURAL ASPEC T. THE ASSESSEE DULY PARTICIPATED IN THE PENALTY PROCEEDING AND IS NOW P RECLUDED FROM RAISING SUCH ISSUES. ITA NO. 2 213 MUM 2013-SHOPPERS STOP LTD. 9 11. IN THE REJOINDER SUBMISSION, THE LD. AR OF THE ASSE SSEE SUBMITS THAT WHENEVER THE ASSESSEE RECOVERED THE SERVICE CHARGE, IT WAS OFFERED TO TAX. 12. WE HAVE CONSIDERED THE SUBMISSION OF THE LD. REPRES ENTATIVE OF THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO DELIBERATED ON THE VARIOUS CASE LAWS REFERRED AND R ELIED BY LOWER AUTHORITIES AND THE REPRESENTATIVE OF THE PARTIES. DURING THE SCRUTINY ASSESSMENT, THE ASSESSING OFFICER NOTED THAT THE AS SESSEE DEBITED RS. 5.56 CRORE AS PROVISION FOR OTHER EXPENSES UNDER THE HEA D MISCELLANEOUS EXPENSES. THE ASSESSEE WAS ASKED TO EXPLAIN REGARD ING ALLOWABILITY OF THE SAME. THE ASSESSEE FILED ITS REPLY DATED 21.12. 2011. IN THE REPLY, THE ASSESSEE CONTENDED THAT DURING THE FINANCIAL YEAR 2 008-09 PROVISION FOR SERVICE TAX OF RS. 5.56 CRORE ON COMMON AREA MAINTE NANCE OF RETAIL STORE PAYABLE TO LANDLORD WAS MADE IN THE BOOKS OF ACCOUN T UNDER THE HEAD MISCELLANEOUS EXPENSES. THE PROVISION WAS MADE PE NDING DETAILED COMPUTATION OF SERVICE TAX WRITE OFF CHARGES PURSUA NT TO DELHI HIGH COURT ORDER DATED 18.04.2009 CONFIRMING SERVICE TAX ON RE NTAL PROPERTIES TAKEN FOR COMMERCIAL USE WHERE AMENITIES ARE PROVIDED BY LANDLORD AND THEY ARE INSEPARABLE FROM LAND. THE CONTENTION OF ASSESS EE WAS NOT ACCEPTED BY ASSESSING OFFICER. THE ASSESSING OFFICER CONCLUD ED THAT NO LIABILITY HAS ACCRUED TO THE ASSESSEE AS ON 31.03.2009 SO AS TO CLAIM THIS PROVISION. THE ASSESSING OFFICER CONCLUDED THAT REVERSAL SHOUL D HAVE BEEN DONE IN THE CURRENT ASSESSMENT YEAR AS THE LIABILITY BECAME CLEAR IN APRIL 2009 ITA NO. 2 213 MUM 2013-SHOPPERS STOP LTD. 10 BEFORE AUDIT AND FINALIZING THE ACCOUNTS. SUBSEQUEN T REVERSAL IN THE NEXT YEAR HAVE NO MERIT AS EACH YEAR IS ITSELF A SELF-CO NTAINED PERIOD FOR THE PURPOSE OF INCOME-TAX ACT. 13. THE ASSESSING OFFICER ISSUED THE SHOW-CAUSE NOTICE ON 01.06.2012. THE ASSESSEE FILED ITS REPLY VIDE ITS REPLY TO THE SAID SHOW-CAUSE NOTICE. WE HAVE ALREADY THE CONTENTS OF REPLY FURNISHED BY ASS ESSEE IN EARLIER PARAS OF THIS ORDER WHILE REFERRING BRIEF FACTS OF THE CASE. WE HAVE FURTHER NOTED THAT WHILE FILING RETURN OF INCOME, THE ASSESSEE DE CLARED LOSS OF RS. 13.26 CRORE. THUS, BY CLAIMING THE IMPUGNED PROVISION THE TAX LIABILITY OF ASSESSEE WAS NOT REDUCED. THE ASSESSING OFFICER WHI LE PASSING THE ASSESSMENT ORDER MADE THE DISALLOWANCE OF PROVISION S OF SERVICE TAX BY NOT ACCEPTING THE EXPLANATION FURNISHED BY ASSESSEE . WE HAVE FURTHER NOTED THAT THE ASSESSING OFFICER WHILE MAKING DISAL LOWANCE TOOK HIS VIEW THAT ASSESSEE FURNISHED INACCURATE PARTICULAR OF IN COME BY NOT ADDING BACK THE PROVISION IN ITS COMPUTATION. THE CONTENTI ON OF ASSESSEE THROUGHOUT THE ASSESSMENT, PENALTY PROCEEDING, FIRS T APPELLATE STAGE AS WELL AS BEFORE THIS TRIBUNAL THAT PROVISION WAS MAD E PURSUANT TO THE HONBLE DELHI HIGH COURT JUDGMENT AND IT WAS A BONA FIDE ESTIMATION OF LIABILITY. THE ASSESSEE SINCE BEGINNING CONTENDED T HAT THEY HAVE NOT FURNISHED ANY INACCURATE PARTICULARS. IT IS ALSO AN ADMITTED FACT THAT THE ASSESSEE HAS MADE REVERSAL IN THE NEXT ASSESSMENT Y EAR; THIS FACT IS DULY RECORDED BY ASSESSING OFFICER WHILE MAKING DISALLOW ANCE. THOUGH, THERE ITA NO. 2 213 MUM 2013-SHOPPERS STOP LTD. 11 WAS NO TAX BENEFIT TO THE ASSESSEE AS THE ASSESSEE HAS SHOWN LOSS IN ITS RETURN OF INCOME. MOREOVER, WHEN THE SAME AMOUNT WA S OFFERED FOR NEXT ASSESSMENT YEAR, IT HAS BECOME TAX NEUTRAL. 14. IT IS SETTLED LAW THAT MERE DISALLOWANCE WOULD NOT AUTOMATICALLY LEAD TO LEVY OF PENALTY WHEN THE ASSESSEE HAS NEITHER CONCE ALED NOR FURNISHED ANY INACCURATE PARTICULARS. NO NEW FACTS HAVE BROUGHT O N RECORD BY THE ASSESSING OFFICER TO JUSTIFY HIS ACTION THAT THE AS SESSEE OFFERED THE INCOME ONLY ON MAKING FURTHER ENQUIRIES. THE HONBL E SUPREME COURT IN CELEBRATED JUDGMENT IN CIT VS. RELIANCE PETROPRODUC TS PVT. LTD. (322 ITR158) THAT WHEN THERE IS NO FINDING THAT ANY DETA ILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING PENALTY UNDER SECTION 27 1(1)(C). A MERE MAKING A CLAIM, WHICH IS NO SUSTAINABLE IN LAW BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INC OME OF ASSESSEE. A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHIN G INACCURATE PARTICULARS. THE HONBLE APEX COURT HELD THAT ONCE THE ASSESSEE HAS OFFERED AN EXPLANATION, THE ONUS SHIFTED ON THE REV ENUE TO PROVE THAT EXPLANATION OFFERED BY ASSESSEE WAS FALSE. FROM THE FACTS AND THE CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ASSESSE E HAS OFFERED BONAFIDE EXPLANATION DURING THE ASSESSMENT AS WELL AS IN THE PENALTY PROCEEDING WITH REGARD TO UNCERTAINTY REGARDING THE PAYMENT OF SERVICE TAX AND ITS CLAIM FOR SET OFF VIS--VIS SERVICE TAX DEPARTMENT. WE HAVE FURTHER NOTED ITA NO. 2 213 MUM 2013-SHOPPERS STOP LTD. 12 THAT THE EXPLANATION FURNISHED BY ASSESSEE FOR RS. 0.94 CRORE AND RS. 1.37 CRORE HAVE NOT BEEN COMMENTED UPON BY THE ASSESSING OFFICER. THE ASSESSING OFFICER REJECTED THE EXPLANATION WITH RES PECT OF AMOUNT OF RS. 3.25 CRORE ONLY. CONSIDERING THE FACT AND CIRCUMSTA NCES OF THE CASE, WE ARE OF THE VIEW THAT THE ASSESSEE HAS NOT FURNISHED INACCURATE PARTICULARS AND THUS, NO PENALTY UNDER SECTION 271(1)(C) WAS LE VIABLE AGAINST THE ASSESSEE. THEREFORE, WE DIRECT THE ASSESSING OFFICE R TO DELETE THE PENALTY LEVIED UNDER SECTION 271(1)(C). 15. AS WE HAVE ACCEPTED THE CONTENTION OF LD. AR OF THE ASSESSEE ON MERIT. THEREFORE, THE ALTERNATIVE AND WITHOUT PREJUDICE SU BMISSION MADE BY LD. AR OF THE ASSESSEE ABOUT THE VALIDITY OF NOTICE UND ER SECTION 274 R.W.S. 271(1)(C), HAS BECOME ACADEMIC. 16. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/ 02/2019. SD/- SD/- G.S. PANNU PAWAN SINGH VICE-PRESIDENT JUD ICIAL MEMBER MUMBAI, DATE: 28.02.2019 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR E BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI