The ACIT,(OSD)Circle-9, Ahmedabad V. Shri Narendrabhai P.Patel, Ahmedabad

ITA 2412/AHD/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2103 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-03-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 27-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHELLEY JINDAL
• Keywords: Business expenditure
• Section: 143(3); 11A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI G. C. GUPTA, VP AND SHRI A. MOHAN ALAN KAMONY, AM) ITA NO.2412/AHD/2010: A. Y.: 2005-06 THE A. C. I. T.(OSD), CIR-9, PRATYAKSH KAR BHAVAN, 1 ST FLOOR, OPP.SAHAJANAND COLLEGE, PANJRAPOLE, AMBAWADI, AHMEDABAD VS SHRI NARENDRABHAI P. PATEL, C-27, SURJIT SOCIETY, NR. VIDYANAGAR ROAD, THAKARBAPANAGAR, AHMEDABAD P. A. NO. AASPP 5751 D (APPELLANT) (RESPONDENT) APPELLANT BY SHRI SHELLEY JINDAL, SR. DR RESPONDENT BY NONE DATE OF HEARING: 05-03-2013 DATE OF PRONOUNCEMENT: 10-05-2013 O R D E R PER A. MOHAN ALANKAMONY: THIS APPEAL IS PREFERRED BY THE REVENUE AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A )-XV, AHMEDABAD DATED 31 ST MAY, 2010, FOR THE ASSESSMENT YEAR 2005-06 IN APPE AL NO. CIT(A)-XV/ACIT(OSD)/CIR.9/30/10-11, CHALLENGING THE DELETION OF PENALTY U/S 271(1) (C) OF THE IT ACT ON ACCOUNT OF DISALLOWANCE MADE U/S 40 (A) (IA) OF THE IT ACT OF RS.59,40,914/-. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE FILED RETURN OF INCOME DECLARING INCOME OF RS.15,05,881/- ON 31-10- 2005, FOR THE ASSESSMENT YEAR 2005-06. IT WAS NOTICED BY THE LEAR NED AO FROM THE AUDIT REPORT FILED WITH THE RETURN OF INCOME THAT T HE ASSESSEE HAD NOT REMITTED THE TAX DEDUCTED AT SOURCE WITH RESPECT TO PAYMENT MADE FOR ITANO.2412/AHD/2010 (AY 2005-06) THE ACIT (OSD) CIR-9, AHMEDABAD VS SHRI NARENDRABH AI P. PATEL 2 AN AMOUNT OF RS.2,65,50,066/- IN THE GOVERNMENT TRE ASURY WITHIN THE STIPULATED DATE. THEREFORE, THE LEARNED AO DISALLOW ED EXPENDITURE OF THE AFORESAID SUM AND ADDED TO THE INCOME OF THE ASSESS EE INVOKING THE PROVISIONS OF SECTION 40(A) (IA) OF THE ACT AND ALS O INITIATED PENALTY PROCEEDINGS U/S 271 (1) ( C ) READ WITH 274 OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME ON 20-12-2007. HO WEVER, THE LEARNED CIT(A) VIDE HIS ORDER DATED 04-12-2008 SUSTAINED AN ADDITION OF RS.1,76,49,772/- IN VIEW OF THE AMENDMENT BROUGHT I N THE SECTION VIDE FINANCE ACT, 2008. THEREAFTER, THE LEARNED AO LEVIE D PENALTY U/S 271 (1) (C ) OF THE ACT VIDE HIS ORDER DATED 30-03-2010 FOR AN AMOUNT OF RS.59,40-,914/- BEING 100% OF THE TAX EVADED ON TH E ADDITION SUSTAINED BY THE LEARNED CIT(A) OF RS.1,76,49,772/-. ON APPEA L BEFORE THE LEARNED CIT(A), THE PENALTY WAS DELETED. THE RELEVANT PORTI ON OF THE ORDER OF THE LEARNED CIT(A) IS REPRODUCED HEREIN BELOW FOR REFER ENCE: EVEN THE ADDITION WHICH WAS SUSTAINED IN APPEAL ON THAT AMOUNT TDS HAD BEEN DEPOSITED IN THE GOVERNMENT ACCOUNT IN JUNE 2005 AND AUGUST 2005, THOUGH IT SHOULD HAVE BEEN DEPOSIT ED BY MARCH 2005. THUS THERE WAS NO LOSS TO REVENUE ONLY A SLIG HT DELAY IN DEPOSIT OF TDS IN GOVERNMENT ACCOUNT. THUS AFTER GOING THROUGH RIVAL SUBMISSIONS I AM OF THE OPINION THAT THERE WAS TECHNICAL BREACH ON THE PART OF THE APPEL LANT WITH RESPECT TO DELAY IN DEPOSIT OF TDS IN THE GOVERNMEN T ACCOUNT FOR WHICH PENALTY U/S 271 (1) ( C) IS NOT LEVIABLE IN V IEW OF FOLLOWING HONBLE SUPREME COURT DECISIONS: I. HINDUSTAN STEEL LIMITED V. STATE OF ORISSA 83 ITR 27(SC): WHEREIN IT HAS BEEN HELD THAT THE AUTHORITY COMPETE NT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVIS IONS OF THE ACT. II. UNION OF INDIA V. RAJASTHAN SPINNING & WEAVING MILLS(2009) 224 CTR (SC) 1 WHEREIN HONBLE SUPREME COURT HAS DISCUSSED THE DECISION DELIVERED BY THEIR LORDSHIPS IN THE CA SE OF UNION OF ITANO.2412/AHD/2010 (AY 2005-06) THE ACIT (OSD) CIR-9, AHMEDABAD VS SHRI NARENDRABH AI P. PATEL 3 INDIA V. DHARMENDRA TEXTILE PROCESSORS AND HAVE OVS ERVED AS UNDER: 21. FROM THE ABOVE, WE FAIL TO SEE HOW THE DECISIO N I DHARMENDRA TEXTILE CAN BE SAID TO HODL THAT SECTION 11AC WOULD APPLY TO EVERY CASE OF NON-PAYMENT OR SHOT-PAYMENT OF DUTY REGARDLESS OF THE CONDITIONS EXPRESSED MENTIONED IN SECTION FOR ITS APPLICATION. 23. THE DECISION IN DHARMENDRA TEXTILE MUST, THEREF ORE, BE UNDERSTOOD TO MEAN THAT THOUGH THE APPLICATION OF S ECTION 11AC WOULD DEPEND UPON THE EXISTENCE OR OTHERWISE OF THE CONDITIONS EXPRESSLY STATED IN THE SECTION, ONCE THE SECTION I S APPLICABLE IN A CASE THE CONCERNED AUTHORITY WOULD HAVE NO DISCRETI ON IN QUANTIFYING THE AMOUNT AND PENALTY MUST BE IMPOSED EQUAL TO THE DUTY DETERMINED UNDER SUB-SECTION(2) OF SECTION 11A . THAT IS WHAT DHARMENDRA TEXTILE DECIDES. IT WAS ARGUED THAT THE DECISION IN RAJASHAN SPINNING & WEAVING MILLS WAS IN LINE WITH THE EARLIER DECISIONS OF SUPREME COURT WHEREIN IT WAS HELD THAT WILFUL CONCEALMENT OR WILF UL FURNISHING OF INACCURATE PARTICULAR IS ESSENTIAL INGREDIENT FOR A TTRACTING PENALTY U/S. 271(1) (C ) WHICH IS NOT THE CASE HERE. THE AO IS DIRECTED TO DELETE THE PENALTY IMPOSED OF RS.59,40,914. 3. THOUGH THE LEARNED AR DID NOT APPEAR BEFORE THE BENCH AT THE TIME OF HEARING, SINCE THE ISSUE HAD BEEN ALREADY D ECIDED BY THE TRIBUNAL AHMEDABAD BENCHES CONSISTENTLY, THE CASE W AS TAKEN UP FOR HEARING. THE LEARNED DR SUPPORTED THE ORDER OF THE LEARNED AO AND PRAYED HIS ORDER MAY BE SUSTAINED. 4. WE HAVE HEARD THE LEARNED DR AND CAREFULLY PERUS ED THE MATERIALS ON RECORD. FROM THE FACTS OF THE CASE IT IS APPAREN T THAT THE ASSESSEE HAS FURNISHED THE DETAILS OF THE TDS DEDUCTED AND A MOUNT REMITTED IN THE GOVERNMENT TREASURY BEFORE THE REVENUE AS ANNEX URE TO THE TAX AUDIT REPORT ALONG WITH THE RETURN OF INCOME FILED. ONLY FROM THIS INFORMATION FURNISHED BY THE ASSESSEE, THE LEARNED AO COULD FIN D THE DISCREPANCY WITH REGARD TO THE SHORT REMITTANCE OF TDS IN THE G OVERNMENT TREASURY. ITANO.2412/AHD/2010 (AY 2005-06) THE ACIT (OSD) CIR-9, AHMEDABAD VS SHRI NARENDRABH AI P. PATEL 4 THUS, THE ASSESSEE HAS NOT FURNISHED ANY INACCURATE PARTICULARS OF INCOME IN HIS RETURN OF INCOME AS POINTED OUT BY TH E LEARNED AO. THE ITAT AHMEDABAD D BENCH HAS TAKEN A VIEW ON THIS I SSUE IN ITA NO.228/AHD/2010 IN THE CASE OF DCIT VS M/S. L. G. C HAUDHARY FOR THE ASSESSMENT YEAR 2006-07 VIDE ORDER DATED 16-03-2012 THAT IN SIMILAR SITUATION, PENALTY CANNOT BE LEVIED. THE RELEVANT P ARA OF THE ORDER IS REPRODUCED HEREIN BELOW: 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE LEARNED DR RELIED ON THE ORDER OF THE AO. ON THE OTHER HAND, THE LEARNED AR SUBMITTED BEF ORE US THAT THE ISSUE UNDER CONSIDERATION IS COVERED BY THE DEC ISION OF ITAT AHMEDABAD A BENCH DATED 30-07-2010 IN ITA NOS. 78 9 TO 791/AHD/2007 IN THE CASE OF DCIT VS MAZDAL LTD. AND THE DECISION OF ITAT D BENCH DATED 22-02-2011 IN ITA NO.2865/A HD/2010 IN THE CASE OF ACIT VS M/S. SARASWATI CONSTRUCTION CO. , WHEREIN THE ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE BY DISMISSING THE DEPARTMENTAL APPEALS, COPY OF WHI CH WERE PLACED ON RECORD. THE TRIBUNAL IN ITS ORDER DATED 2 2-02-2011 IN THE CASE OF M/S. SARASWATI CONSTRUCTION CO. (SUPRA) IN PARA 5 PAGE 6 HAS HELD AS UNDER: 5. IN THE PRESENT CASE BEFORE US, THE FACTS ARE UN DISPUTED THAT THE ASSESSEE HAD DEDUCTED TDS FROM GROSS CONTA CT PAYMENT TO CATERING CONTRACTOR BUT THE SAME WAS NOT DEPOSITED INTO GOVT. EXCHEQUER BEFORE EXPIRY OF TIM E PRESCRIBED UNDER SUB-SECTION 1 OF SECTION 2000 OF T HE ACT IN VIEW OF SECTION 40(A) (IA) OF THE ACT. WE FIND THAT THIS IS NOT ALLOWABLE AS DEDUCTION WHILE COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFIT & GAINS OF BUSINE SS OR PROFESSION FOR THE YEAR. WE FIND FROM THE ORDERS O F THE LOWER AUTHORITIES THAT THERE IS NO ALLEGATION THAT THE PA YMENT OF CATERING EXPENSES ON WHICH TDS IS DEDUCTED BUT NOT PAID TO GOVT. EXCHEQUER IS NON-GENUINE OR BOGUS. IT IS ALSO A FACT THAT THE LOWER AUTHORITIES HAVE NOT BROUGHT ANYTHIN G OR NOT DISPUTED THAT THE PAYMENT IS EXCESSIVE OR UNREASONA BLE. THE DISALLOWANCE IS SIMPLY MADE EITHER FOR NON-DEDUCTIO N OF TDS IN VIEW OF PROVISIONS OF SECTION 40(A) (IA) OF THE ACT OR NON- PAYMENT OF TDS DEDUCTED TO THE GOVT. EXCHEQUER. IN VIEW OF ITANO.2412/AHD/2010 (AY 2005-06) THE ACIT (OSD) CIR-9, AHMEDABAD VS SHRI NARENDRABH AI P. PATEL 5 THE ABOVE DISCUSSION, THAT THE LEGAL FICTION CRATED BY SECTION 40(A) (IA) WILL NOT APPLY TO THE PROVISIONS OF SECT ION 271 (1) ( C ) OF THE ACT, THE DISALLOWANCE MADE SIMPLY BY INV OKING THE PROVISIONS OF SECTION 40(A) (IA) OF THE ACT WILL NO T ATTRACT PENALTY FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME BECAUSE THERE IS NO INACCURATE PARTICULARS OF INCOM E IN THE RETURN. ACCORDINGLY, WE CONFIRM THE ORDER OF CIT(A) DELETING THE PENALTY AND THIS ISSUE OF REVENUES APPEAL IS D ISMISSED. THE LEARNED AR FURTHER PLEADED THAT THE ASSESSEE IS NOT LIABLE FOR PENALTY AS IS HELD BY THE LEARNED CIT(A) AND THE SA ME BE UPHELD BY THE TRIBUNAL. 4.1 ON PERUSAL OF THE RECORDS, WE FIND THAT THE ADD ITION ON ACCOUNT OF DISALLOWANCE OF RS.5,85,87,521/- WAS MAD E BY THE AO DUE TO NON-PAYMENT OF TDS IN TIME WHICH IS TECHNICAL IN NATURE. HENCE, THE SAME DOES NOT AMOUNT TO CONCEALMENT OF I NCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY T HE ASSESSEE. FURTHER, THE ADDITION OF RS.1,03,222/- ON ACCOUNT O F DISALLOWANCE OF EXPENSES WAS MADE ON ESTIMATE BASIS. IT IS ALSO SETTLED LAW THAT ADDITION MADE ON ESTIMATE BASIS DOES NOT ATTRACT PE NALTY. THE LEARNED CIT(A) ON PROPER APPRECIATION OF FACTS HAS RIGHTLY DELETED THE PENALTY MADE BY THE AO ON BOTH THE ABOVE ISSUES . THE LEARNED DR ALSO HAS NOT PRODUCED ANY MATERIAL ON RE CORD TO CONTROVERT THE FINDINGS OF THE LEARNED CIT(A). 4.2 THE SAME ISSUE HAS ALSO BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE ITAT AHMEDABAD B BENCH VIDE ORDER DATED 13- 03-2012 IN ITA NO.1041/AHD/2010 FOR AY 2006-07 IN T HE CASE OF M/S. LUCKY STAR INTERNATIONAL BY DISMISSING THE DEP ARTMENTAL. THE FINDINGS OF THE TRIBUNAL IN PARA 6 TO 8 ARE REPRODU CED AS UNDER: 6. WE HAVE HEARD THE LEARNED BOTH THE PARTIES, PE RUSED THE ORDERS OF THE AUTHORITIES BELOW AND CONSIDERED THE MATERIALS ON RECORD. DURING THE COURSE OF HEARING O F THE APPEAL THE LEARNED DR RELIED UPON THE ORDER OF THE AUTHORITIES BELOW. ON THE OTHER HAND, THE LEARNED A R REFERRING TO PARA 3 AND 4 OF THE PENALTY ORDER, SUB MITTED THAT ALL THE ADDITIONS IN RESPECT OF COMMISSION EXPENSES OF RS.10,46,163/-, CLEARING AND FORWARDING EXPENSES OF RS.2,01,037/- AND FEES AND LEGAL EXPENSES OF RS.1,1 0,200/- (TOTALLING TO RS.13,57,400/-) HAVE BEEN DISALLOWED HOLDING ITANO.2412/AHD/2010 (AY 2005-06) THE ACIT (OSD) CIR-9, AHMEDABAD VS SHRI NARENDRABH AI P. PATEL 6 THAT THE ASSESSEE HAS VIOLATED THE PROVISIONS OF SE CTION 40(A) (IA) OF THE IT ACT AND THAT THE AO HAS LEVIED PENA LTY ON THE SAID AMOUNT BEING FULLY SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME TO T HE EXTENT OF RS.13,57,400/- AND TREATING IT TO BE A FIT CASE FOR LEVYING PENALTY. THE ASSESSEE ALSO SUBMITTED THAT THE ISSUE IS COVERED BY THE DECISION OF THE HONBLE SUPREME COUR T IN THE CASE OF CIT VS RELIANCE PETRO PRODUCS PVT. LTD., 20 10-TIOL- 21-SC-II IN SLP(C) NO.27161 OF 2008 DATED 17 TH MARCH, 2010 (PB-4) WHEREIN IT HAS BEEN HELD AS UNDER: INCOME TAX 271 (1) ( C ) MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT, ATTRACT PENALTY UNDER SECTION 271(1) (C): BY ANY STRETCH OF IMAGINATION, MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. 6.1 THE ASSESSEE FURTHER REFERRED TO THE DECISION O F ITAT DELHI A BENCH IN THE CASE OF DCIT VS ASIAN HOTELS LTD., 2011-TIOL-795-ITAT-DEL (ITA NO.3820/DEL/2010 DATED JANUARY,7, 2011 (PB-1) WHEREIN IT HAS BEEN HELD AS UNDER: INCOME TAX SECTIONS 40(A) (IA), 271 (1) (C) WHETHER PENALTY IS LEVIABLE IN A CASE WHERE THE SUBSTANTIAL RETURNED INCOME PROVES THE BONAFIDE OF ASSESSEE VIS--VIS DISALLOWANCE OF 40(A) (IA). ASSESSEE COMPANY FILED ITS RETURN OF INCOME ON 22 ND DECEMBER 2003 DECLARING AN INCOME OF RS.6.32 CRORES. AN ASSESSMENT WAS PASSED U/S 143(3) ON 30 TH MARCH 2006 WHEREBY TOTAL INCOME OF THE ASSESSEE HAS BEEN DETERMINED AT RS.11.53CRORES. DURING THE COURSE OF ASSESSMENT PROCEEDING LD. AO FOUND THAT THE ASSESSEE HAD MADE THE PROVISIONS IN RESPECT OF CERTAIN FOREIGN PAYMENTS AND CLAIMED THESE PROVISIONS WITHOUT DEDUCTING CORRESPONDING TDS. AO DISALLOWED THIS CLAIM OF ASSESSEE AND LEVIED PENALTY UNDER SECTION 271(1)(C )RELYING UPON THE DECISION OF RELIANCE (2010-TIOL- 21-SC-II) CIT(A) DELETED THE PENALTY MATTER REACHED TO THE ITAT. ITANO.2412/AHD/2010 (AY 2005-06) THE ACIT (OSD) CIR-9, AHMEDABAD VS SHRI NARENDRABH AI P. PATEL 7 AFTER HEARING THE PARTIES THE ITAT HELD AS UNDER, ++ THERE IS NO DOUBT THAT THE CLAIM MADE BY THE ASSESSEE IS IN RESPECT OF BUSINESS EXPENSES. HAD THE ASSESSEE DEDUCTED THE TDS AND PAID IT TO THE GOVT. AMOUNT THEN ITS DEDUCTION COULD BE ALLOWED. ACCORDING TO THE ASSESSEE IT HAS PAID THE TAX ALSO IN THE NEXT YEAR FOR THE SUM OF RS.7,07,294/- AND EVEN THEREAFTER DEDUCTION WAS NOT GRANTED TO IT. LD . FIRST APPELLATE AUTHORITY HAS ACCEPTED THE PLEA OF ASSESSEE THAT IT WAS A BONAFIDE ERROR; ++ TAKING INTO CONSIDERATION THE OVERALL FACTS AND CIRCUMSTANCES PARTICULARLY THE AMOUNT OF DISALLOWANCE VIS A VIS THE RETURNED INCOME, WE ARE OF THE VIEW THAT IT IS A BONAFIDE LAPSE AT THE END OF THE ASSESSEE. THERE IS NO DELIBERATE ATTEMPT TO CONCEAL THE PARTICULARS OF INCOME. LD. CIT(A) HAS RIGHTLY APPRECIATED THE FACTS AND CIRCUMSTANCES WE DO NOT SEE ANY REASON TO INTERFERE IN HIS ORDER. THE ASSESSEE FURTHER SUBMITTED THAT THE FACTS IN TH E ABOVE CASE ARE IDENTICAL TO THAT OF THE PRESENT CASE OF T HE ASSESSEE AND THE ISSUE IS COVERED BY THE ABOVE DECISION. 6.2 THE ASSESSEE FURTHER SUBMITTED THAT THE ISSUE I S ALSO COVERED BY THE DECISION OF ITAT HYDERABAD A BENCH DATED 17 TH JUME, 2010 IN THE CASE OF ACIT VS M/S. SEAWAYS SHIPPING LTD. IN ITA NO.80/H/2011 FOR AY 2005-06 ( PB 9 TO 11) WHEREIN ALSO IDENTICAL ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE VIDE PARA 5 OF ITS ORDER BY HOLDING AS UNDER: AT THE TIME OF HEARING ON 16.6.2011, NONE APPEARED ON BEHALF OF THE ASSESSEE. WE HEARD THE DEPARTMENTAL REPRESENTATIVE. IN THIS CASE, PENALTY IS LEVIED FOR DISALLOWANCE OF EXPENDITURE U/S 40(A) (IA) OF THE INCOME TAX ACT. NON DEDUCTION OF TDS BY THE ASSESSEE WAS RESULTED IN DISALLOWANCE OF EXPENDITURE U/S 40(A) (IA), THAT ITSELF CANNOT BE CONSTRUED AS FURNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. THE ASSESSEE HAS FAILED TO DEDUCT TDS WHICH RESULTED IN DISALLOWANCE OF EXPENDITURE. IN OUR OPINION, THE ITANO.2412/AHD/2010 (AY 2005-06) THE ACIT (OSD) CIR-9, AHMEDABAD VS SHRI NARENDRABH AI P. PATEL 8 MISTAKE COMMITTED BY THE ASSESSEE WAS COMPENSATED BY DISALLOWING THE EXPENDITURE. FURTHER, THE REVENUE CANNOT PENALISE THE ASSESSEE BY LEVYING PENALTY U/S 271 (1) (C) OF THE ACT. IN O RDER TO LEVY PENALTY U/S 271 (1) (C) OF THE ACT, THERE H AS TO BE CONCEALMENT OF PARTICULARS OF INCOME OF THE ASSESSEE OR THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF ITS INCOME. PRESENT IS NO T THE CASE OF CONCEALMENT OF INCOME OR IT IS NOT THE CASE OF REVENUE THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. THE DEPARTMENT HAS NOT FOUND OUT THAT THE ASSESSEE HAS FURNISHED ANY FACTUAL INCORRECT INFORMATION AND THE ASSESSEE IS NOT GUILTY OF FURNISHING OF INACCURATE PARTICULA RS OF INCOME. IN OUR OPINION, THE CONDITIONS LAID DOWN IN SECTION 271(1) (C) OF THE ACT IS NOT COMPLIED WI TH. BEING SO, LEVY OF PENALTY IS NOT JUSTIFIED MERELY BECAUSE THE ASSESSEE HAS CLAIMED CERTAIN EXPENDITURE THAT EXPENDITURE IS NOT ELIGIBLE IN VIEW OF THE PROVISIONS OF SECTION 40(A) (IA) OF THE ACT AND FOR THAT REASON, EXPENDITURE IS DISALLOWED. PENALTY CANNOT BE LEVIED FOR MERE MAKING OF A CLAIM OF EXPENDITURE WHICH IS NOT SUSTAINABLE AND DELETION OF PENALTY BY THE LEARNED CIT(A) IS JUSTIFIED. WE PLACE RELIANCE ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS (P) LTD. (322 ITR 158 (SC). ACCORDINGLY THE GROUND RAISED BY THE REVENUE HOLDS NO MERIT. 6.3 THE LEARNED DR IN HIS REJOINDER HAS NOT PRODUCE D ANY MATERIAL TO CONTROVERT THE AFORESAID SUBMISSIONS OF THE ASSESSEE. 7. IN VIEW OF ABOVE DISCUSSIONS AND THE DECISIONS C ITED BY THE ASSESSEE, WE FIND FORCE IN THE SUBMISSIONS OF T HE ASSESSEE. WE ARE OF THE VIEW THAT THE LEARNED CIT(A ) ON PROPER APPRECIATION OF THE FACTS OF THE CASE, CONSI DERING THE SUBMISSIONS OF THE ASSESSEE AND THE CITATIONS REFER RED TO BY THE ASSESSEE BEFORE HIM, HAS RIGHTLY DELETED THE PE NALTY AND WE FIND NO JUSTIFICATION TO INTERFERE IN THE ORDER OF THE LEARNED CIT(A) DELETING THE PENALTY IN THE MATTER IN THE AB SENCE OF ANY MATERIAL PRODUCED BY THE LEARNED DR TO CONTROVE RT THE ITANO.2412/AHD/2010 (AY 2005-06) THE ACIT (OSD) CIR-9, AHMEDABAD VS SHRI NARENDRABH AI P. PATEL 9 SAME. WE CONFIRM HIS FINDINGS. THERE IS NO MERIT IN THE GROUND OF APPEAL OF THE REVENUE. THE SAME IS ACCORD INGLY DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 4.3 CONSIDERING THE FACTS OF THE CASE AND IN VIEW OF THE ABOVE DISCUSSIONS, WE DO NOT FIND ANY JUSTIFICATION TO IN TERFERE WITH THE FINDINGS OF THE LEARNED CIT(A). WE CONFIRM HIS FIND INGS. THERE IS NO MERIT IN THIS DEPARTMENTAL APPEAL. ACCORDINGLY, WE DISMISS THE APPEAL OF THE REVENUE. 4.1 THUS, PLACING RELIANCE ON THE CASE LAWS RELIED UPON BY THE LEARNED CIT(A) AND THE DECISION RENDERED BY ITAT AHMEDABAD BENCHES, WE HEREBY DELETE THE PENALTY LEVIED BY THE LEARNED AO FOR DISALLOWANCE OF EXPENDITURE U/S 40(A) (IA) OF THE ACT OF RS.59,40-, 914/-. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10/05/2013 SD/- SD/- (G. C. GUPTA) VICE PRESIDENT (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/- -- - COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD ITANO.2412/AHD/2010 (AY 2005-06) THE ACIT (OSD) CIR-9, AHMEDABAD VS SHRI NARENDRABH AI P. PATEL 10 1. DATE OF DICTATION: DIRECT ON COMPUTER 06-03-13 /01-05-13 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 01-05-13 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: