HIMSON TEXTILE ENGINEERING IND.PVT.LTD., Surat V. THE Dy.CIT.,Circle-1, Surat

ITA 2381/AHD/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 6102 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 25-05-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 24-06-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK BAL
• Assessee Lawyers: R N VEPARI
• Keywords: Depreciation; Wrong claim; Difference of opinion; Bonafide mistake
• Section: 271(1)(c); 143(3); 80IB; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : D BENCH : AHMEDABAD CAMP AT SURAT (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HONBLE SH RI D.C. AGRAWAL, A.M.) I.T.A. NO. 2381/AHD./2008 ASSESSMENT YEAR : 2003-2004 HIMSON TEXTILES ENG. IND. PVT. LTD., SURAT -VS.- DEPUTY COMMISSIONER OF INCOME TAX, (PAN : AAACH 5825 K) CIRCLE-1, SURAT (APPELLANT) (RESPONDENT) & I.T.A. NO. 2949/AHD./2008 ASSESSMENT YEAR : 2003-2004 DEPUTY COMMISSIONER OF INCOME TAX, -VS. - HIMSON TEXTILES ENGG. IND. PVT. LTD., CIRCLE-1, SURAT SURAT (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.N. VEPARI DEPARTMENT BY : SHRI ASHOK BAL, CIT, D.R. O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THESE CROSS APPEALS ARE AGAINST THE ORDER DATED 11 .06.2008 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-I, SURAT FOR THE ASSESSMENT YEA R 2003-04 CONFIRMING THE PENALTY LEVIED BY THE ASSESSING OFFICER ON (I) DISALLOWANCE OF DEPREC IATION OF RS.1,16,442/-, (II) DISALLOWANCE OUT OF DEDUCTION CLAIMED UNDER SECTION 80IB AMOUNTING T O RS.52,817/- AND (III) CANCELLING THE PENALTY LEVIED BY THE ASSESSING OFFICER IN RESPECT OF EXCESS DISALLOWANCE OF DEPRECIATION CLAIMED ON PLANT AND MACHINERY AMOUNTING TO RS.5,41,800/- AND (IV) DISALLOWANCE OUT OF DEDUCTION CLAIMED AMOUNTING TO RS.50,28,246/- UNDER SECTION 3 5AB OF THE INCOME TAX ACT, 1961. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE I S A COMPANY ENGAGED IN MANUFACTURE AND SALE OF TEXTILE MACHINERY AND PROCESSING OF YARN. F OR THE ASSESSMENT YEAR UNDER APPEAL, THE ASSESSING OFFICER FRAMED THE ASSESSMENT UNDER SECTI ON 143(3) ON 24.03.2006, WHEREIN, INTER ALIA, HE MADE THE FOLLOWING ADDITIONS :- 2 ITA NO. 2381 & 2949/AHD /2008 (1) DISALLOWANCE OF DEPRECIATION OF RS.1,16,442/- I N RESPECT OF ASSETS SOLD IN EARLIER YEAR. (2) DISALLOWANCE OF RS.5,41,800/- OUT OF DEPRECIATI ON CLAIMED ON PLANT AND MACHINERIES. (3) DISALLOWANCE OUT OF DEDUCTION CLAIMED U/S. 80IB OF RS.52,817/-. (4) DISALLOWANCE OUT OF DEDUCTION CLAIMED U/S. 35AB OF RS.50,28,246/-, SUBSEQUENTLY, THE ASSESSING OFFICER LEVIED THE PENA LTY OF RS.21,09,193/- UNDER SECTION 271(1)(C) OF THE ACT IN RESPECT OF AFORESAID FOUR ADDITIONS/ DISALLOWANCES VIDE ORDER DATED 10.03.2008. 3. ON APPEAL, IN THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE PENALTY LEVIED BY THE ASSESSING OFFICER IN RESPECT OF FOLLOWING TWO ITEMS OF ADDITIONS/ DISALLOWANCES :- (I) DISALLOWANCE OF DEPRECIATION OF RS.1,16,442/- I N RESPECT OF ASSETS SOLD IN EARLIER YEAR. (II) DISALLOWANCE OUT OF DEDUCTION CLAIMED U/S. 80I B OF RS.52,817/-. HOWEVER, THE LEARNED COMMISSIONER OF INCOME TAX(APP EALS) CANCELLED THE PENALTY LEVIED BY THE ASSESSING OFFICER IN RESPECT OF FOLLOWING TWO A DDITIONS :- (I) DISALLOWANCE OF RS.5,41,800/- OUT OF DEPRECIATION C LAIMED ON PLANT AND MACHINERIES. (II) DISALLOWANCE OUT OF DEDUCTION CLAIMED U/S. 35AB OF RS.50,28,246/-. 4. AGGRIEVED BY THE ORDER OF LD. CIT(A) PARTLY CONF IRMING THE PENALTY, BOTH THE SIDES ARE IN APPEALS BEFORE THE TRIBUNAL. THE ASSESSEE IS IN APP EAL AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AGAINST CONFIRM ATION OF PENALTY IN RESPECT OF ADDITION TOWARDS DISALLOWANCE OF DEPRECIATION AMOUNTING TO R S.1,16,442/- AND DEDUCTION CLAIMED UNDER SECTION 80IB OF THE ACT AMOUNTING TO RS.52,817/-. THE REVENUE IS IN APPEAL AGAINST THE CANCELLATION O F PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON DISALLOWANCE OF DEPRECIATION OF RS.5,41,800/- A ND DISALLOWANCE OUT OF DEDUCTION CLAIMED UNDER SECTION 35AB OF THE ACT AMOUNTING TO RS.50,28 ,246/-. 5. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF R EVENUE SHRI ASHOK BAL, CIT, D.R. APPEARED AND CONTENDED THAT IN THE BALANCE-SHEET, T HE ASSESSEE HAS SHOWN AN AMOUNT OF RS.27,78,000/- AS SUBSIDY RECEIVED. AS PER PROVISIO NS OF SECTION 43(1), EXPLANATION 10 SUBSIDY 3 ITA NO. 2381 & 2949/AHD /2008 PROVIDED BY THE GOVERNMENT HAS TO BE REDUCED FOR DE TERMINING THE ACTUAL COST OF THE ASSET. THE ASSESSEE CLAIMED DEPRECIATION WITHOUT REDUCING THE AMOUNT OF SUBSIDY. THIS AMOUNTS TO FURNISHING OF INACCURATE PARTICULARS OF INCOME AND PENALTY WAS RIGHTLY LEVIED BY THE ASSESSING OFFICER AND LEARNED COMMISSIONER OF INCOME TAX(APPE ALS) IS NOT JUSTIFIED IN CANCELLING THE SAME ON THE GROUND THAT MATERIAL FACTS WERE DISCLOS ED IN THE RETURN OF INCOME AND, THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAD FURNISHED INAC CURATE PARTICULARS OR CONCEALED PARTICULARS OF INCOME. THE LD. D.R. FURTHER SUBMITTED THAT IN THE IMPUGNED ORDER, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS MENTIONED THAT THERE IS NO MALAFIDE OR CONSCIOUS CONCEALMENT WHICH CAN BE ATTRIBUTABLE TO THE ASSESSEE. HE SUBMITTED T HAT NOW IT IS NOT NECESSARY FOR THE DEPARTMENT TO PROVE MALAFIDE OR CONSCIOUS CONCEALMENT. THE ASS ESSEE HAS FURNISHED INACCURATE PARTICULARS. SIMILARLY, WITH REGARD TO DISALLOWANCE OUT OF DEDUC TION CLAIMED UNDER SECTION 35B, THE LD. D.R. SUBMITTED THAT THE ASSESSEE CLAIMED THE ENTIRE EXPE NDITURE AMOUNTING TO RS.80,20,698/- UNDER SECTION 37, WHEREAS AS PER PROVISIONS CONTAINED IN SECTION 35AB, THE ASSESSEE WAS ENTITLED TO 1/6 TH OF THE EXPENDITURE OF TECHNICAL KNOWHOW FEES. THI S ALSO AMOUNTS TO FURNISHING OF INACCURATE PARTICULARS OF INCOME WITHIN THE MEANING OF EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT AND PENALTY WAS RIGHTLY LEVIED BY THE ASSESSING OFFICER. 6. ON THE OTHER HAND, SHRI R.N. VEPARI, LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE VEHEMENTLY SUPPORTED THE ORDER OF LEARNED COMMISSIO NER OF INCOME TAX(APPEALS) WITH REGARD TO CANCELLATION OF PENALTY UNDER SECTION 271(1)(C) IN RESPECT OF (I) DISALLOWANCE OF RS.5,41,800/- OUT OF DEPRECIATION CLAIMED ON PLANT AND MACHINERIE S AND (II) DISALLOWANCE OUT OF DEDUCTION CLAIMED U/S. 35AB OF RS.50,28,246/-. HOWEVER, WITH REGARD TO THE REMAINING TWO ITEMS, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE SOLD CERTAIN ASSETS IN THE ASSESSMENT YEAR 1996-97 BUT SALE VALUE WAS NOT REDUCED FROM THE BLO CK OF ASSETS. THIS WAS DUE TO INADVERTENT MISTAKE. THE CORRECTION WAS MADE IN THE RELEVANT AS SESSMENT YEAR AND CONSEQUENTIAL BLOCK OF WRITTEN DOWN VALUE GOT REDUCED YEAR TO YEAR. IN THE RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL AS WELL AS EARLIER YEAR THROUGH INADVE RTENCE THE ASSESSEE CLAIMED DEPRECIATION ON OPENING BLOCK WITHOUT CONSIDERING THE SALE PROCEEDS OF THE ASSESSMENT YEAR 1996-97. WHEN THE ASSESSEE CAME TO KNOW ABOUT THIS BONAFIDE MISTAKE, IT IMMEDIATELY SUO MOTU VIDE ITS WRITTEN SUBMISSIONS REQUESTED THE ASSESSING OFFICER TO REDU CE THE DEPRECIATION FROM THE CLAIM MADE BY IT BY RS.1,16,442/-. THE OPENING WRITTEN DOWN VALUE OF THE ASSETS WAS ON THE RECORD OF THE 4 ITA NO. 2381 & 2949/AHD /2008 INCOME TAX DEPARTMENT AND, THEREFORE, THERE IS NO Q UESTION OF CONCEALING THE INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME WITH MA LAFIDE INTENTION. IN THE EARLIER YEAR ALSO, THIS CLAIM WAS DUE TO MISTAKE COMMITTED IN THE ASSESSMEN T YEAR 1996-97. THIS YEAR, THE ASSESSEE HAS MERELY CLAIMED THE DEPRECIATION ON OPENING WRITTEN DOWN VALUE OF THE ASSETS ON THE RECORD OF INCOME TAX DEPARTMENT, THEREFORE, ON THIS GROUND AL SO, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) OUGHT TO HAVE CANCELLED THE PENALTY LE VIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT. IN SUPPORT OF THIS, LD. COUNS EL OF THE ASSESSEE FURTHER SUBMITTED THAT NO INFORMATION IN THE RETURN OF INCOME FOR THE ASSESSM ENT YEAR UNDER APPEAL IS FOUND TO BE INCORRECT. INCORRECT AMOUNT OF DEPRECIATION WAS CLAIMED DUE TO BONAFIDE MISTAKE IN THE ASSESSMENT YEAR 1996-97. THIS DOES NOT AMOUNT TO CONCEALMENT OF PA RTICULARS OF INCOME WITHIN THE MEANING OF SECTION 271(1)(C) OF THE INCOME TAX ACT AS RECENTLY HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT-VS.- RELIANCE PETRO PRODUCTS PVT. LTD. [2010] 322 ITR 158 (SC). 6.1. WITH REGARD TO CONFIRMATION OF PENALTY BY LEAR NED COMMISSIONER OF INCOME TAX(APPEALS) IN RESPECT OF DEDUCTION UNDER SECTION 80IB TO THE TUNE OF RS.52,817/-, IT WAS SUBMITTED BY THE LD. A.R. THAT THOUGH IN THE PENALT Y ORDER, THE ASSESSING OFFICER HAS MENTIONED THAT DEDUCTION UNDER SECTION 80IB TO THE EXTENT OF RS.52,817/- WAS NOT ALLOWED, WHEREAS IN APPEAL EFFECT RS.47,183/- WAS ON THE CONTRARY FURTH ER REDUCED. THEREFORE, ON THIS GROUND ALONE, PENALTY CONFIRMED BY THE LEARNED COMMISSIONER OF IN COME TAX(APPEALS) IN RESPECT OF DISALLOWANCE OF DEDUCTION UNDER SECTION 80IB AMOUNT ING TO RS.52,817/- BE CANCELLED. 6.2. IN SUPPORT OF THIS, THE LD. COUNSEL OF THE ASS ESSEE RELIED ON THE LATEST JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA). 7. IN HIS REJOINDER, THE LD. D.R. SUBMITTED THAT IN RESPECT OF CLAIM OF DEPRECIATION OF RS.1,16,442/- IN RESPECT OF ASSETS SOLD IN THE EARL IER YEAR, THE ASSESSEE MADE A WRONG CLAIM. IN THE ASSESSMENT YEAR, IT HAS NOT DISCLOSED THE COMPLETE FACTS. WHEN ASKED BY THE ASSESSING OFFICER, THE ASSESSEE OFFERED THE DISALLOWANCE AND THEREFORE , IT WAS NOT DONE VOLUNTARILY. WITH REGARD TO CLAIM OF DEPRECIATION, AND DEDUCTION UNDER SECTION 80IB, THE LD. D.R. SUBMITTED THAT IN RESPECT OF INTEREST AND RENT, THESE ARE NOT DERIVED FROM ELIGI BLE INDUSTRIAL UNDERTAKING AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS.- STERLING FOO DS REPORTED IN 237 ITR 579 AND HINDUSTHAN 5 ITA NO. 2381 & 2949/AHD /2008 LIVER LIMITED REPORTED IN 239 ITR 297 AND CONTENDED THAT IT WAS A WRONG CLAIM. THE DISALLOWANCE OF DEDUCTION UNDER SECTION 80IB MADE B Y THE ASSESSING OFFICER IN RESPECT OF INTEREST AND RENT IS UPHELD BY THE LEARNED COMMISSI ONER OF INCOME TAX(APPEALS), THEREFORE, PENALTY IS RIGHTLY CONFIRMED BY THE LEARNED COMMISS IONER OF INCOME TAX(APPEALS) IN THE IMPUGNED ORDER. 8. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND PERUSED THE MATERIAL PLACED BEFORE US. TH E FIRST POINT OF DISALLOWANCE WAS IN RESPECT O DISALLOWANCE OF DEPRECIATION OF RS.1,16,442/- IN RE SPECT OF ASSETS SOLD IN ASSESSMENT YEAR 1996- 97. IT IS PERTINENT TO NOTE THAT THE ASSESSEE CLAIM ED THE DEPRECIATION IN THE ASSESSMENT YEAR UNDER APPEAL ON OPENING WRITTEN DOWN VALUE. THERE WAS MIS TAKE IN CALCULATION OF OPENING WRITTEN DOWN VALUE BECAUSE THE SAID OPENING BLOCK WAS WITHO UT CONSIDERING THE SALE PROCEEDS OF ASSESSMENT YEAR 1996-97. WHEN THE ASSESSEE CAME TO KNOW ABOUT THIS BONAFIDE MISTAKE, DISALLOWANCE WAS VOLUNTARILY OFFERED. AS A MATTER O F FACT, IN THE ASSESSMENT YEAR UNDER APPEAL, THIS MISTAKE WAS COMMITTED IN THE ASSESSMENT YEAR 1 996-97. THEREFORE, IN OUR OPINION, PENALTY ON THIS DISALLOWANCE OF DEPRECIATION IS NOT LEVIABL E AND THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN CONFIRMING THE SAME. IN SUPPO RT OF THIS, RELIANCE CAN BE PLACED ON THE LATEST JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA). WE, THEREFORE, CANCEL THE PENALTY CONFIRME D BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ON THIS ITEM OF DISALLOWANCE. 9. THE SECOND POINT ON WHICH PENALTY IS DELETED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS IN RESPECT OF DISALLOWANCE OF SUBSI DY AMOUNTING TO RS.5,41,800/- OUT OF DEPRECIATION CLAIMED ON PLANT AND MACHINERY. IT IS PERTINENT TO NOTE THAT SUBSIDY WAS RELATED TO ERSTWHILE PALOD MACHINES LTD., WHICH WAS MERGED WIT H THE ASSESSEE COMPANY IN ASSESSMENT YEAR 1998-99. THE SUBSIDY WAS DUE IN THAT YEAR BUT WAS A MALGAMATED WITH THE ASSESSEE-COMPANY AS PER ORDER PASSED UNDER SECTION 72A OF THE INCOME TA X ACT IN THE ASSESSMENT YEAR 1998-99. THE SUBSIDY AMOUNT OF THAT COMPANY WAS RECEIVED BY THE ASSESSEE. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER REDUCED THE AMOUNT OF SUBSIDY FRO M THE BLOCK OF ASSETS AND DEPRECIATION OF RS.6,94,500/- WAS REDUCED FROM DEPRECIATION. IN QUA NTUM APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) BIFURCATED THE SUBSIDY AMOUNT T OWARDS BUILDING, MACHINERY, LAND, ETC. AND 6 ITA NO. 2381 & 2949/AHD /2008 GAVE RELIEF OF RS.1,52,700/-. WE ARE OF THE VIEW TH AT DEPRECIATION CLAIMED BY THE ASSESSEE WAS BONAFIDE KEEPING IN VIEW THE JUDGMENT OF THE HON'BL E SUPREME COURT IN THE CASE OF P.J. CHEMICALS REPORTED IN 210 ITR 831. KEEPING IN VIEW THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, IN OUR CONSIDERED OPINION, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS GIVEN COGENT REASON FOR HOLDING THAT PENALTY IS NOT LEVIABLE IN RESPECT OF DISALLOWANCE OF DEPRECIATION CLAIMED ON PLANT AND MACHINERY. WE, THEREFORE, DECLINE TO I NTERFERE. 10. THE THIRD POINT OF DISALLOWANCE WAS TOWARDS TEC HNICAL KNOW-HOW FEES., ON WHICH THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CONFIRM ED THE PENALTY AMOUNTING TO RS.52,817/- UNDER SECTION 80IB OF THE ACT. IT IS PERTINENT TO N OTE THAT IN THE ASSESSMENT YEAR DEDUCTION UNDER SECTION 80IB WAS NOT ALLOWED TO THE TUNE OF RS.52,8 17/-. HOWEVER, AFTER GIVING APPEAL EFFECT TO THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APP EALS), RS.47,183/- WAS FURTHER REDUCED. WE ALSO FIND THAT COMPLETE FACTS REGARDING CLAIM OF DEDUCTION UNDER SECTION 80IB WERE FURNISHED IN THE RETURN OF INCOME. THE ASSESSEE HAS NOT CONCE ALED ANY PARTICULARS OF INCOME WITHIN THE MEANING OF SECTION 271(1)(C) IN CLAIMING DEDUCTION UNDER SECTION 80IB. THEREFORE, IN VIEW OF THE LATEST JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA), PENALTY ON THIS AMOUNT IS ALSO NOT LEVIABL E. THE PENALTY ON THIS DISALLOWANCE CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS ACCORDINGLY CANCELLED. 11. THE LAST POINT ON WHICH THE LEARNED COMMISSIONE R OF INCOME TAX(APPEALS) CANCELLED THE PENALTY IS DISALLOWANCE OUT OF DEDUCTION CLAIME D UNDER SECTION 35AB OF THE INCOME TAX ACT OF RS.50,28,246/-. THE ASSESSEE CLAIMED THE ENTIRE EXPENDITURE ON TECHNICAL KNOW-HOW FEES AMOUNTING TO RS.80,20,698/- UNDER SECTION 37 AS REV ENUE EXPENDITURE. THE ASSESSING OFFICER APPLIED THE PROVISIONS CONTAINED IN SECTION 35AB AN D ALLOWED THE DEDUCTION OF ONLY 1/6 TH OF AMOUNT OF TECHNICAL KNOW-HOW FEES OF RS.80,20,698/- . ON PERUSAL OF REASONING GIVEN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER AND LEARN ED COMMISSIONER OF INCOME TAX(APPEALS) IN QUANTUM APPEAL, WE ARE CONVINCED THAT THIS ADDIT ION WAS MADE BY ASSESSING OFFICER AND CONFIRMED BY LEARNED COMMISSIONER OF INCOME TAX(APP EALS) ON ACCOUNT OF DIFFERENCE OF OPINION BETWEEN THE ASSESSEE AND ASSESSING OFFICER. ALL THE MATERIAL FACTS WERE DISCLOSED IN THE RETURN AND, THEREFORE, IT CANNOT BE SAID THAT ASSES SEE HAD FURNISHED INACCURATE PARTICULARS OR CONCEALED INCOME. IN SUPPORT OF THIS, RELIANCE CAN BE PLACED ON THE JUDGMENT OF THE HON'BLE 7 ITA NO. 2381 & 2949/AHD /2008 SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCT S PVT. LTD. (SUPRA). WE ARE, THEREFORE, OF THE VIEW THAT LEARNED COMMISSIONER OF INCOME TAX(APPEAL S) IS LEGALLY AND FACTUALLY CORRECT IN CANCELLING THE PENALTY LEVIED BY ASSESSING OFFICER ON THIS DISALLOWANCE. WE, THEREFORE, INCLINE TO UPHOLD THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ON THE ISSUE. 12. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED AND THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 04.06.2010 . SD/- SD/- (D.C. AGRAWAL) (T.K. SHARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 04 / 06 /2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A) CONCERNED, (4) CIT CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD LAHA/SR.P.S.