M/s. Hero Honda Motors Ltd, New Delhi V. DCIT, New Delhi

ITA 2698/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3887 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 10-03-2011
• Assessment Year: 1998-1999
• Appeal Filed On: 03-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY PURI
• Keywords: Retrospective amendment; Question of law; Wrong claim; Bad and doubtful debts; Revised return; Documents seized
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI, BENCH C NEW DELHI, BENCH C NEW DELHI, BENCH C NEW DELHI, BENCH C BEFORE SHRI I. P. BANSAL, JUDICIAL MEMBER AND SHRI A K GARODIA, ACCOUNTANT MEMBER ITA NO. 2698 /DEL/2010 (ASSESSMENT YEAR 1998-99) M/S. HERO HONDA MOTORS LTD., VS. DCIT, CIRCLE 12(1 ), 34, BASANT LOK, VASANT VIHAR, NEW DELHI. NEW DELHI (APPELLANTS) (RESPONDENTS) PAN / GIR NO. AAACH0812J APPELLANT BY: SHRI AJAY VOHRA, ADV. SHRI AVDHESH BANSAL ACA SHRI GAURAV JAIN, FCA SHRI G C SRIVASTAVA, SPL. COUNSEL (D/F) RESPONDENT BY: SHRI SANJAY PURI CIT DR ORDER ORDER ORDER ORDER PER A. K. GARODIA, AM: PER A. K. GARODIA, AM: PER A. K. GARODIA, AM: PER A. K. GARODIA, AM: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) XV, NEW DELHI DATED 22.03.2010 FOR HT ASSESS MENT YEAR 1998-99. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS UNDER: 1) THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN NO T DELETING PENALTY OF ` 5,75,60,132/- LEVIED BY THE A.O. UNDER SECTION 271(1)(C) OF THE I. T. ACT, 1961 (THE ACT) VIDE ORDER DATED 31.01.2009 AS BEING BEYOND JURISDICTION, BAD IN LAW AND VOID AB I NITIO AS NO SATISFACTION AS TO CONCEALMENT OF INCOME OR FURNISH ING OF INACCURATE PARTICULARS THEREOF WAS RECORDED IN THE ASSESSMENT ORDER. 1.1) THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN HOLDIN G THAT PURSUANT TO INSERTION OF SUB-SECTION (1B) TO SECTIO N 271 OF THE ACT, DIRECTION TO INITIATE PENALTY CONSTITUTED SATISFACT ION OF THE A.O. FOR IMPOSITION OF PENALTY. 2) THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN UPH OLDING THE LEVY OF PENALTY IN RESPECT OF DISALLOWANCE OF DEDUCTION OF ` 16,42,77,522/- CLAIMED UNDER SECTION 43B OF THE ACT IN RESPECT OF MODVAT CREDIT ON COMPONENTS /CVD ON INPUTS. I.T.A.NO. 2698/DEL/2010 2 2.1) THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN SUSTAI NING PENALTY LEVIED IN RESPECT OF AFORESAID DISALLOWANCE WITH OU T APPRECIATING THAT (I) NO INACCURATE PARTICULARS OF INCOME OR INC ORRECT FACTS IN RESPECTS THEREOF WERE FURNISHED BY THE APPELLANT;(I I) THE SAID ISSUE WAS DEBATABLE ON WHICH TWO VIEWS ARE POSSIBLE; (III ) THE DISALLOWANCE WAS SUSTAINED SIMPLY ON BONAFIDE; AND (V) DEDUCTION THEREFORE WAS, IN ANY CASE, AVAILABLE IN THE SUCCE EDING Y EAR(S). 2.2) THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN NOT AP PRECIATING THAT SINCE SUBSTANTIAL QUESTION OF LAW IN RESPECT O F THE AFORESAID DISALLOWANCE HAD ALREADY BEEN ADMITTED BY THE HON'B LE HIGH COURT PENALTY UNDER SECTION 271 (1)(C) OF THE ACT, WAS EV EN OTHERWISE, NOT SUSTAINABLE. 2.3) THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN ALLEGI NG THAT THE APPELLANT HAD CONCEALED INCOME AND FURNISHED INACCU RATE PARTICULARS BY MAKING WRONG CLAIM OF DEDUCTION UNDE R SECTION 43B OF THE ACT. 3) THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN NOT DELETING PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT I N RESPECT OF DISALLOWANCE OF ` 1,80,000/- BEING THE AMOUNT OF DE DUCTION CLAIMED IN RESPECT OF PROVISION FOR DOUBTFUL DEBTS, DEBITED IN THE BOOKS OF ACCOUNT. 3.1) THAT THE CIT(A) ERRED ON FACTS NEW DELHI IN LAW IN UPHOLDING THE ACTION OF THE A.O. IN NOT APPRECIATING THAT (I) THE IMPUGNED CLAIM WAS MADE ON THE BASIS OF LEGAL POSITION/JUDICIAL PR ECEDENTS PREVALENT AT THE TIME OF FILING OF RETURN OF INCOME ; (II) NO INACCURATE PARTICULARS OF INCOME OR INCORRECT FACTS IN RESPECT THEREOF WERE FURNISHED BY THE APPELLANT; (III) THE IMPUGNED ISSU ED WAS DEBATABLE ON WHICH TWO VIEWS WERE POSSIBLE; (IV) THE EXPLANAT ION OFFERED BY THE APPELLANT WAS BONA FIDE; AND (V) ALL FACTS MATE RIAL TO THE CLAIM WERE FULLY DISCLOSED. 3.2) THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN ALLEGI NG THAT THE PENALTY UNDER SECTION 271(1)(C) WAS RIGHTLY IMPOSED ON DISALLOWANCE OF PROVISION FOR DOUBTFUL DEBTS SINCE HT SAME WAS A CCEPTED BY THE APPELLANT AND WAS NOT CHALLENGED IN FURTHER APPEAL BEFORE ITAT. 3.3) THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN NOT AP PRECIATING THAT THE DISALLOWANCE ON ACCOUNT OF PROVISION FOR D OUBTFUL DEBTS HAVING BEEN SUSTAINED ON ACCOUNT OF RETROSPECTIVE A MENDMENT IN LAW, AFTER THE FILING OF RETURN OF INCOME, THE SAME WOULD NOT CONSTITUTE GROUND FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. 2. THE FACTS OF THE CASE IN BRIEF ARE THAT THE RETU RN OF INCOME IN THIS CASE WAS FILED BY THE ASSESSEE ON 30.11.1998 DECLAR ING INCOME OF ` I.T.A.NO. 2698/DEL/2010 3 78,48,97,250/-. THE ASSESSMENT WAS COMPLETED U/S 1 43(3) ON 26.03.2001 AT ` 95,14,41,756/-, INTER ALIA MAKING CERTAIN DISA LLOWANCES ON VARIOUS GROUNDS. OUT OF SUCH DISALLOWANCES, TWO DISALLOWAN CES MADE BY THE A.O. WERE ON ACCOUNT OF PROVISION FOR DOUBTFUL DEBTS AND DISALLOWANCE U/S 43B AND BOTH HAD BEEN CONFIRMED AT THE TRIBUNAL LEVEL. DISALLOWANCE U/S 43B CONFIRMED BY THE TRIBUNAL IS ON ACCOUNT OF MODVAT CREDIT ON COMPONENTS AT ` 15,41,82,612/- AND MODVAT CREDIT FROM CVD AT ` 1,00,94,910/- TOTAL ` 16,42,77,522/-. THE A.O. HAD MADE ONE MORE DISALLO WANCE U/S 43B OF ` 23,14,628/- ON ACCOUNT OF EXCISE DUTY RECEIVABLE BU T THIS DISALLOWANCE WAS DELETED BY CIT(A) AND THE ORDER OF CIT(A) WAS C ONFIRMED BY THE TRIBUNAL. IN ADDITION TO THIS DISALLOWANCE OF ` 1 6,42,77,522/-, CONFIRMED BY THE CIT(A) AND BY THE TRIBUNAL FOR DISALLOWANCE U/S 43B, ONE MORE DISALLOWANCE WAS MADE BY THE A.O. OF ` 2.28 LACS ON ACCOUNT OF THE PROVISION FOR DOUBTFUL DEBTS. ON APPEAL, CIT(A) RE STRICTED THE DISALLOWANCE ON ACCOUNT OF PROVISION FOR DOUBTFUL DEBTS TO THE E XTENT OF ` 1.80 LACS. THE A.O. INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) FO R TOTAL DISALLOWANCE CONFIRMED UP TO THE TRIBUNAL LEVEL OF ` 16,44,57,52 2/-. THE A.O. WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND HE IMPOSED PENALTY OF ` 5,75,60,132/-. BEING AGGRIEVED, ASSESSEE CARRIED T HE PENALTY MATTER IN APPEAL BEFORE LD. CIT(A) BUT WITHOUT SUCCESS AND NO W, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 3. REGARDING THE PENALTY IMPOSED BY THE A.O. ON ACC OUNT OF DISALLOWANCE OF ` 1.80 LACS ON ACCOUNT OF PROVISION S FOR DOUBTFUL DEBTS, IT WAS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE T HAT DISALLOWANCE IS ON THE BASIS OF EXPLANATION INSERTED IN SECTION 36(1)( VII) OF THE I. T. ACT. IT IS SUBMITTED THAT THIS EXPLANATION WAS INSERTED BY THE FINANCE ACT 2001 WITH RETROSPECTIVE EFFECT FROM 01.04.1989. IT IS SUBMIT TED THAT SINCE THE RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 30.11.1998, AT THE TIME OF FILING OF RETURN OF INCOME, THE CLAIM OF THE ASSESSEE WAS JUS TIFIED AND HENCE, FOR FURTHER DISALLOWANCE AS PER THE AMENDED PROVISIONS OF THE ACT, PENALTY IS NOT JUSTIFIED. LD. D.R. SUPPORTED THE ORDERS OF AU THORITIES BELOW ON THIS ASPECT OF MATTER. I.T.A.NO. 2698/DEL/2010 4 4. REGARDING THE PENALTY IMPOSED BY THE A.O. ON ACC OUNT OF DISALLOWANCE U/S 43B, IT IS SUBMITTED BY LD. COUNSE L FOR THE ASSESSEE THAT ALLOWABILITY OF SUCH CLAIM WAS A DEBATABLE ISSUE AN D FULL FACTS WERE DISCLOSED BY THE ASSESSEE IN ITS RETURN OF INCOME F ILED BY THE ASSESSEE. OUR ATTENTION WAS DRAWN TO THE COMPUTATION OF INCOM E AS AVAILABLE ON PAGES 45-46A OF THE PAPER BOOK. IT IS POINTED OUT THAT ON PAGE 45, IT HAS BEEN STATED THAT DEDUCTION IS CLAIMED TO THE EXTENT OF ` 1666.52 LACS U/S 43B IN RESPECT OF PAYMENTS MADE DURING THE YEAR BUT NOT DEBITED TO THE P & L ACCOUNT AND THE DETAILS AND BASIS OF THE CLAIM IS ENCLOSED. IT IS POINTED OUT THAT SUCH DETAILS AND BASIS ARE GIVEN O N PAGE 46A OF THE PAPER BOOK. IT IS POINTED OUT THAT IT HAS BEEN EXPLAINED THAT DEDUCTION OF ` 15,41,82,612/- HAS BEEN CLAIMED IN RESPECT OF MODVA T CREDIT ON COMPONENTS AS PER BALANCE IN RG-23A PART II AND DED UCTION OF ` 1,00,94,910/- HAS BEEN CLAIMED IN RESPECT OF MODVAT CREDIT FROM CVD ON THE BASIS OF BALANCE AS PER LEDGER. IT IS A LSO POINTED OUT THAT A NOTE HAS BEEN GIVEN AS PER WHICH, THESE TWO DEDUCTI ONS U/S 43B HAD BEEN CLAIMED AS PER TRIBUNAL ORDER RENDERED IN THE CASE OF MODIPON LTD. VS IAC AS REPORTED IN 52 TTJ 471 (DEL.). IT WAS SUBMITTED THAT IT WAS A LEGAL CLAIM MADE BY THE ASSESSEE ON THE BASIS OF AN EXISTING OR DER OF TRIBUNAL AND THERE WAS NO ADVERSE ORDER OF ANY AUTHORITY AVAILAB LE AT THE TIME OF FILING OF RETURN OF INCOME BY THE ASSESSEE AND HENCE, IT H AS TO BE ACCEPTED THAT THE CLAIM OF THE ASSESSEE IS A BONA FIDE LEGAL CLAI M AND EVEN IF SUCH CLAIM IS NOT ALLOWED, PENALTY IS NOT JUSTIFIED. RELIANCE WAS PLACED ON THE TRIBUNAL DECISION RENDERED IN THE CASE OF MODIPON L TD. (SUPRA). IT IS SUBMITTED THAT IN THAT CASE, IT WAS HELD BY THE TRI BUNAL THAT EXCISE DUTY PAID AS ADVANCE BY WAY OF DEPOSIT IN PERSONAL LEDGE R ACCOUNT CANNOT BE DISALLOWED U/S 43B. IT IS SUBMITTED THAT ALTHOUGH THE FACTS IN THE PRESENT CASE ARE SLIGHTLY DIFFERENT BECAUSE IN THE PRESENT CASE, DEDUCTION HAS BEEN CLAIMED BY THE ASSESSEE ON ACCOUNT OF MODVAT C REDIT IN ADDITION TO BALANCE IN PLA ACCOUNT AND THE CLAIM OF THE ASSESSE E REGARDING BALANCE IN PLA ACCOUNT WAS ALLOWED WHEREAS THE CLAIM OF THE AS SESSEE REGARDING MODVAT CREDIT WAS DISALLOWED BUT SINCE THE MONEY HA S GONE OUT OF THE I.T.A.NO. 2698/DEL/2010 5 COFFERS OF THE ASSESSEE FOR MODVAT CREDIT ALSO, IT HAS TO BE ACCEPTED THAT THE CLAIM OF THE ASSESSEE ALTHOUGH NOT ALLOWED IS B ONA FIDE CLAIM OF THE ASSESSEE AND PENALTY IS NOT JUSTIFIED. 5. IT IS ALSO SUBMITTED THAT FIVE MEMBER SPECIAL BE NCH WAS CREATED BY THE TRIBUNAL IN THE CASE OF DCIT VS GLAXO SMITHKLIN E CONSUMER HEALTHCARE LTD. REPORTED IN 107 ITD 343 CHD. (SB) AND THIS SHO WS THAT THE ISSUE WAS DEBATABLE AND HENCE PENALTY IS NOT JUSTIFIED. 6. IT IS ALSO SUBMITTED THAT IN THE QUANTUM PROCEED INGS, THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE HON'BLE HIGH COU RT OF DELHI AND THE APPEAL OF THE ASSESSEE HAD BEEN ADMITTED BY HON'BLE HIGH COURT OF DELHI. RELIANCE WAS ALSO PLACED ON THE TRIBUNAL DECISION R ENDERED IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. 77 ITD 123 (DEL.) AN D IT IS SUBMITTED THAT IN THAT CASE, THE TRIBUNAL HAS FOLLOWED EARLIER TRI BUNAL DECISION RENDERED IN THE CASE OF MODIPON LTD. (SUPRA). IT IS ALSO SUBMI TTED THAT IN THE CASE OF HONDA SIEL POWER PRODUCTS (SUPRA), ISSUE WAS SIMILA R I.E. REGARDING ALLOWABILITY OF DEDUCTION CLAIMED BY THE ASSESSEE U /S 43B IN RESPECT OF AMOUNT APPEARING IN THE BALANCE SHEET UNDER THE HEA D LOANS & ADVANCES WITH THE CAPTION BALANCE WITH CUSTOMERS/EXCISE DEP ARTMENT WHICH CONSISTS OF BALANCE IN PLA ` 10,109/-, RG-23A PART II ` 63,05,495/- AND RG23C PART II ` 15,64,516/-. IT IS SUBMITTED THAT THE TRIBUNAL HAS FOLLOWED THE EARLIER TRIBUNAL DECISION RENDERED IN THE CASE OF MODIPON LTD. (SUPRA) AND DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE. OUR ATTENTION WAS DRAWN TO PARA 11 OF THIS TRIBUNAL DECISION WHERE IT IS OB SERVED BY THE TRIBUNAL THAT THE FACTS IN THE CASE OF HONDA SIEL POWER PROD UCTS ARE IDENTICAL AND THE RATIO OF THE DECISION IN THE CASE OF MODIPON LT D. IS SQUARELY APPLICABLE IN THE FACTS OF THIS CASE AND THE ASSESSEES ACTION OF CLAIMING DEDUCTION U/S 43B IN RESPECT OF MODVAT CREDIT IS A BONA FIDE CLAIM AND EVEN AFTER DISALLOWING OF THIS CLAIM, AS PER THE DECISION OF S PECIAL BENCH OF THIS TRIBUNAL CONSTITUTED AFTERWARDS, PENALTY IS NOT JUS TIFIED. I.T.A.NO. 2698/DEL/2010 6 7. ONE MORE CONTENTION WAS RAISED THAT SINCE IN QUA NTUM PROCEEDINGS, HON'BLE HIGH COURT HAS ADMITTED THE APPEAL OF THE A SSESSEE, THIS ITSELF PROVES THAT THE ISSUE INVOLVED IS A DEBATABLE ISSUE AND PENALTY IS NOT JUSTIFIED. IN SUPPORT OF THIS CONTENTION, RELIANCE IS PLACED ON THE JUDGMENT OF HON'BLE HIGH COURT OF DELHI RENDERED IN THE CASE OF CIT VS BASTI SUGAR MILLS CO. LTD. IN I.T.A. NO. 232/2005. IT IS SUBMI TTED THAT THIS JUDGEMENT OF HON'BLE HIGH COURT OF DELHI WAS DELIVERED ON 04.02. 2010 AND COPY OF THIS IS AVAILABLE ON PAGE 16-17 OF JUDGEMENT PAPER BOOK. IT IS SUBMITTED THAT IN THAT CASE, IT WAS HELD BY HON'BLE HIGH COURT OF DELHI THAT SINCE THE ISSUE IN DISPUTE HAS TRAVELLED UP TO HON'BLE HIGH COURT O F DELHI, IT IS THEREFORE, CLEAR THAT THE ISSUE WAS DEBATABLE AND THEREFORE, C OULD NOT BE DISALLOWED WHILE CONSIDERING THE MATTER U/S143(1)(A) OF THE I. T. ACT. IT IS SUBMITTED THAT THE SAME LOGIC WILL APPLY FOR IMPOSITION OF PE NALTY ON THOSE DISALLOWANCES REGARDING WHICH THE APPEAL AND SUBSTA NTIAL QUESTION OF LAW HAS BEEN ADMITTED BY THE HON'BLE HIGH COURT OF DELH I. 8. AS AGAINST THIS, LD. D.R. SUPPORTED THE ORDERS O F AUTHORITIES BELOW. RELIANCE WAS PLACED BY HIM ON THE FOLLOWING JUDGEME NTS: A) CIT VS ATUL MOHAN BINDAL 317 ITR 01 (SC) B) CIT VS ECS LTD., 2010-TIOL-287-H.C.-DEL-IT(DEL.) C) CIT VS ZOOM COMMUNICATIONS PVT. LTD. 327 ITR 510 (D EL.) D) CIT VS. ESCORTS FINANCE LTD., 183 TAXMAN 453 (DEL.) E) CIT VS GURBACHAN LTD. 250 ITR 157 (DEL.) F) CIT VS KISHORE KUMAR SHAMJI 244 ITR 702 (KER.) 9. HE ALSO SUBMITTED THAT PAGE NO.46A IN THE PAPER BOOK FILED BY THE ASSESSEE AND WHICH WAS POINTED OUT BY LD. A.R. OF T HE ASSESSEE TO CONTEND THAT THIS DEDUCTION U/S 43B WAS CLAIMED BY FOLLOWING THE EXISTING TRIBUNAL DECISION IS NOT A CORRECT COPY AND HE SUBM ITTED ANOTHER COPY OF PAGE 46A AND POINTED OUT THAT IN FACT, RELIANCE ON TRIBUNAL ORDER RENDERED IN THE CASE OF MODIPON LTD. (SUPRA) WAS PLACED IN T HE NOTE FOR DEDUCTION ON ACCOUNT OF PLA BALANCE AND FOR MODVAT CREDIT BAL ANCE, RELIANCE WAS I.T.A.NO. 2698/DEL/2010 7 PLACED ON THE ORDER OF LD. CIT(A) IN THE CASE OF MA RUTI UDYOG LTD. HE ALSO SUBMITTED A COPY OF THIS ORDER LD. CIT(A). 10. IT IS ALSO SUBMITTED BY HIM THAT THE TRIBUNAL D ECISION IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. (SUPRA) WAS DELIVERE D BY THE TRIBUNAL ON 24.03.2000 I.E. AFTER FILLING THE RETURN OF INCOME BY THE ASSESSEE AND HENCE, BENEFIT OF THIS TRIBUNAL DECISION WAS NOT AV AILABLE AT THAT POINT OF TIME I.E. FILING OF RETURN OF INCOME BY THE ASSESSE E. IT IS ALSO SUBMITTED THAT IT WAS HELD BY THE SPECIAL BENCH OF THE TRIBUN AL IN THE CASE OF DCIT VS GLAXO SMITHKLINE CONSUMERS HEALTHCARE LTD., (SUPRA) THAT MODVAT CREDIT AVAILABLE TO AN ASSESSEE IS IN THE NATURE OF A FUTU RE ENTITLEMENT, WHICH CANNOT BE CONSIDERED EQUIVALENT TO ACTUAL PAYMENT O F EXCISE DUTY AND HENCE DEDUCTION IS NOT ALLOWABLE U/S 43B IN RESPECT OF UNEXPIRED MODVAT CREDIT AVAILABLE TO AN ASSESSEE ON THE LAST DAY OF THE PREVIOUS YEAR. IT IS ALSO SUBMITTED THAT THIS FINDING OF THE TRIBUNAL SH OWS THAT THERE WAS NO BASIS FOR MAKING THIS CLAIM BY THE ASSESSEE AND HEN CE PENALTY IS JUSTIFIED. 11. IN THE REJOINDER, IT IS SUBMITTED BY LD. COUNSE L OF THE ASSESSEE THAT THE PAGE NO.46A OF THE PAPER BOOK FILED BY THE ASSE SSEE IS NOT PROPERLY XEROXED AND THE SECOND NOTE ABOUT RELIANCE ON THE O RDER OF LD. CIT(A) HAS NOT BEEN COPIED BY MISTAKE AND IN FACT, THIS PAGE N O.46A SUBMITTED BY LD. D.R. OF THE REVENUE IS THE CORRECT COPY. BUT IT IS SUBMITTED BY HIM THAT IT IS A LEGAL CLAIM ALTHOUGH NOT SUPPORTED BY ANY TRIB UNAL OR HIGH COURT JUDGMENT AT THE TIME OF FILING OF RETURN OF INCOME BY THE ASSESSEE BUT THIS DOES NOT CHANGE THE CHARACTER OF IT BEING LEGAL CLA IM. IT IS ALSO SUBMITTED THAT THE ORDER OF LD. CIT(A) IN THE CASE OF MARUTI UDYOG LTD. (SUPRA) ON WHICH RELIANCE WAS PLACED BY THE ASSESSEE FOR MAKIN G THIS CLAIM IN THE RETURN OF INCOME IS ALSO AN APPELLATE ORDER AVAILAB LE AT THE TIME OF FILING OF RETURN OF INCOME AND HENCE, IT IS NOT CORRECT THAT NO JUDICIAL DECISION WAS AVAILABLE IN FAVOUR OF THE ASSESSEE AT THE TIME OF FILING OF RETURN OF INCOME BY THE ASSESSEE. IT IS ALSO SUBMITTED THAT IT WAS HELD BY HONBLE APEX COURT IN THE CASE OF COLLECTOR OF CENTRAL EXCISE PU NE VS DIAECHI KARKARIA LTD. AS REPORTED IN 75 SCC 448 THAT CREDIT UNDER TH E MODVAT SCHEME WAS I.T.A.NO. 2698/DEL/2010 8 AS GOOD AS TAX PAID AND THE SAME DID NOT FORM PART OF THE COST OF EXCISABLE GOODS. IT IS SUBMITTED THAT ALTHOUGH THI S DECISION OF HONBLE APEX COURT IS IN EXCISE MATTER BUT THIS FINDING OF HONBLE APEX COURT IS RELEVANT THAT CREDIT UNDER THE MODVAT SCHEME WAS AS GOOD AS TAX PAID AND HENCE, IT HAS TO BE ACCEPTED THAT THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 43B IN RESPECT OF MODVAT CREDIT IS A BONA FIDE CLAIM AND THEREFORE, PENALTY IS NOT JUSTIFIED. IT IS ALSO SU BMITTED THAT THE CLAIM OF THE ASSESSEE IS TAX NEUTRAL BECAUSE TO THE EXTENT OF DE DUCTION CLAIMED BY THE ASSESSEE IN THE PRESENT YEAR, DEDUCTION WAS SURREND ERED BY THE ASSESSEE IN THE NEXT YEAR AND HENCE THE CLAIM IS TAX NEUTRAL , WHICH ALSO SHOWS THE BONA FIDE OF THE ASSESSEE. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS ED THE RECORDS AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW A ND THE JUDGEMENTS CITED BY BOTH THE SIDES. AS PER THE COPY OF COMPUT ATION SUBMITTED BY THE ASSESSEE, DEDUCTION U/S 43B WAS CLAIMED IN RESPECT OF 3 AMOUNTS; ONE AMOUNT OF ` 23,74,628/- IS AS PER PLA AND DEDUCTION FOR THE SAME WAS ALLOWED BY CIT(A) AND NO PENALTY HAS BEEN IMPOSED O N THAT ACCOUNT. IN THE NOTE GIVEN BY THE ASSESSEE, THE ASSESSEE HAS CI TED THE TRIBUNAL DECISION RENDERED IN THE CASE OF MODIPON LTD. (SUPR A) FOR CLAIMING THIS DEDUCTION IN RESPECT OF PLA BALANCE BUT FOR THE REM AINING TWO AMOUNTS FOR WHICH DEDUCTION HAS BEEN CLAIMED BY THE ASSESSEE IN RESPECT OF MODVAT CREDIT ON COMPONENTS AND MODVAT CREDIT FOR CVD, THI S TRIBUNAL DECISION WAS NOT REFERRED AND IT IS STATED BY THE ASSESSEE I N THE NOTE AS GIVEN IN THE COMPUTATION THAT DEDUCTION IS CLAIMED AS PER TH E ORDER OF CIT(A) XV, IN THE CASE OF MARUTI UDYOG LTD. FOR ASSESSMENT YEAR 1994-95. THIS SHOWS THAT ASSESSEE WAS ALSO VERY MUCH AWARE ABOUT THE FA CTUAL DIFFERENCE IN THESE TWO AMOUNTS AND THIS ARGUMENT OF THE ASSESSEE DOES NOT HOLD GOOD THAT ALL THESE THREE AMOUNTS ARE SAME AND HAVE BEEN CONSIDERED AS SAME BY THE ASSESSEE. THE ASSESSEE ITSELF HAS GIVEN SEP ARATE TREATMENT TO BALANCE IN PLA ACCOUNT FOR WHICH THE ASSESSEE HAS R ELIED UPON THE TRIBUNAL DECISION IN THE CASE OF MODIPON LTD. (SUPRA) AND FO R DEDUCTION IN RESPECT OF MODVAT CREDIT, THAT TRIBUNAL DECISION WAS NOT RE LIED UPON AND THOSE I.T.A.NO. 2698/DEL/2010 9 DEDUCTIONS WERE CLAIMED ON THE BASIS OF THE ORDER O F LD. CIT(A) IN THE CASE OF MARUTI UDYOG LTD. (SUPRA). IN THE PAPER BOOK, T HE ASSESSEE HAS SUBMITTED A CERTIFIED TRUE COPY OF THE COMPUTATION AT PAGE 46A BUT THIS PAGE IS NOT A TRUE COPY OF WHAT WAS ACTUALLY SUBMIT TED BY THE ASSESSEE WITH THE RETURN OF INCOME. CORRECT COPY HAS BEEN B ROUGHT ON RECORD BEFORE US BY LD. D.R. FOR THE REVENUE & LD. COUNSEL OF THE ASSESSEE IN HIS REJOINDER HAS ACCEPTED THAT THE COPY FILED BY LD. D .R. FOR THE REVENUE IS THE CORRECT COPY. 13. WE DO NOT APPRECIATE THIS ACTION OF THE ASSESSE E TO SUBMIT A WRONG COPY OF COMPUTATION IN THE PAPER BOOK AND CERTIFYIN G THE SAME AS TRUE COPY. IT AMOUNTS TO MAKING AN ATTEMPT TO MISLEAD T HE BENCH BY SUBMITTING A WRONG COPY OF NOTE SUBMITTED WITH THE RETURN OF INCOME AND CERTIFIED THE SAME AS TRUE COPY. THIS ACTION OF TH E ASSESSEE IS HIGHLY DEPLORED. BUT WE FEEL THAT IN SPITE OF THIS ACTION OF THE ASSESSEE OF MAKING AN ATTEMPT TO MISLEAD THE BENCH, THE ISSUE INVOLVED SHOULD BE DECIDED AFTER CONSIDERING THE TOTAL FACTS AND THE CORRECT C OPY OF THE COMPUTATION OF TOTAL INCOME BROUGHT ON RECORD BY THE LEARNED DR OF THE REVENUE. 14. WHEN WE CONSIDER THE FACTS IN ITS TOTALITY, WE FIND THAT APART FROM AN ORDER OF LEARNED CIT (A) IN THE CASE OF MARUTI UDYO G LIMITED, NO TRIBUNAL ORDER OR DECISION OF ANY HIGH COURT WAS AVAILABLE O N THIS ISSUE AT THE TIME OF FILING OF RETURN OF INCOME BY THE ASSESSEE. BUT SUBSEQUENTLY, A SPECIAL BENCH WAS CONSTITUTED FOR DECIDING THIS ISSUE. THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IS AGAINST THE ASSESSEE, BUT THE CONSTITUTION OF THE SPECIAL BENCH ITSELF SHOWS THAT IT WAS A DEBATABLE ISSUE TILL THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL. IN FACT, THE TRI BUNAL HAS APPROVED THIS VIEW OF THE ASSESSEE AS PER ITS SUBSEQUENT DECISION IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. (SUPRA).THIS IS ALSO A FAC T THAT THE SPECIAL BENCH WAS CONSTITUTED AFTERWARDS AND HENCE, AT THE TIME O F FILING OF RETURN OF INCOME BY THE ASSESSEE, THERE WAS NO DEBATE GOING O N. BUT STILL, IT HAS TO BE ACCEPTED THAT THE VIEW TAKEN BY THE ASSESSEE ON THE BASIS OF AN ORDER OF LEARNED CIT (A) RENDERED IN THE CASE OF MARUTI U DYOG LIMITED (SUPRA) I.T.A.NO. 2698/DEL/2010 10 WAS NOT AN IMPOSSIBLE VIEW ALTHOUGH THE SAME WAS NO T APPROVED BY THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF GLAXO SMITHKLINE (SUPRA) BUT BEFORE THAT, IT WAS APPROVED BY A DIVISION BENCH OF THE TRIBUNAL AS PER DECISION RENDERED IN THE CASE OF HONDA SIEL POWER P RODUCTS LTD. (SUPRA). UNDER THIS FACTUAL POSITION, WE FEEL THAT PENALTY I S NOT JUSTIFIED. MOREOVER, EVEN AFTER THE DECISION OF THE TRIBUNAL AGAINST THE ASSESSEE IN ASSESSEES OWN CASE IN QUANTUM PROCEEDINGS, THE ASSESSEE HAS F ILED APPEAL BEFORE HONBLE DELHI HIGH COURT AND THIS APPEAL OF THE ASS ESSEE HAD BEEN ADMITTED BY HONBLE DELHI HIGH COURT AS HAS BEEN CO NTENDED BY THE LEARNED COUNSEL OF THE ASSESSEE AND THIS FACT ALSO INDICATES THAT THE VIEW TAKEN BY THE ASSESSEE IS NOT AN IMPOSSIBLE VIEW ALT HOUGH NOT ACCEPTED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN QUANTUM PROC EEDINGS OR BY THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF GLAXO SMITHKLINE (SUPRA). 15. REGARDING VARIOUS JUDGMENTS CITED BY THE LEARNE D DR OF THE REVENUE, WE FEEL THAT IN THE LIGHT OF THIS FINDING OF US THAT THE VIEW TAKEN BY THE ASSESSEE WAS NOT AN IMPOSSIBLE VIEW, THESE J UDGMENTS ARE NOT RELEVANT. REGARDING THE JUDGMENT RENDERED IN THE CA SE OF CIT VS. ATUL MOHAN BINDAL (SUPRA) CITED BY THE LEARNED DR, WE FI ND THAT IN THIS JUDGMENT, HONBLE APEX COURT HAS REMITTED THE MATTE R BACK TO HONBLE DELHI HIGH COURT FOR A FRESH CONSIDERATION AND DECI SION AND HENCE, THIS JUDGMENT IS OF NO HELP TO THE REVENUE IN THE PRESEN T CASE. 16. NOW WE CONSIDER THE APPLICABILITY OF THE JUDGME NT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF ECS LTD. (SUPRA) . WE FIND THAT THIS JUDGMENT IS NOT APPLICABLE IN THE PRESENT CASE BECA USE THE FACTS ARE DIFFERENT. IN THAT CASE, THE DISPUTE WAS ABOUT ALLO WABILITY OF DEDUCTION U/S 80 O ON GROSS INCOME OR NET INCOME. THE ASSESSEE CLAIMED DEDUCTION ON GROSS INCOME AND THE A. O. ALLOWED THE SAME ON NET INCOME AND PENALTY WAS IMPOSED ON SUCH PARTIAL DISALLOWANCE OF DEDUCTI ON UNDER SECTION 80 O. IN PARA 9 OF THIS JUDGMENT, IT IS NOTED BY HON BLE DELHI HIGH COURT THAT THERE WAS AN EXISTING JUDGMENT OF HONBLE DELHI HIG H COURT I.E. JURISDICTIONAL HIGH COURT TO THE EFFECT THAT DEDUCT ION HAD TO BE COMPUTED I.T.A.NO. 2698/DEL/2010 11 NOT ON THE BASIS OF GROSS INCOME BUT ON THE BASIS O F NET INCOME. HENCE, IN THAT CASE, THE ISSUE WAS COVERED AGAINST THE ASSESS EE BY THE BINDING JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT BUT I N THE PRESENT CASE, NO ADVERSE DECISION OF ANY COURT OR TRIBUNAL WAS AVAIL ABLE AT THE TIME OF FILING OF RETURN OF INCOME. HENCE, THIS JUDGMENT IS OF NO HELP TO THE REVENUE IN THE PRESENT CASE. 17. IN OUR CONSIDERED OPINION, THE JUDGMENT OF HON BLE DELHI HIGH COURT RENDERED IN THE CASE OF ZOOM COMMUNICATION (SUPRA) IS ALSO NOT APPLICABLE IN THE PRESENT CASE BECAUSE THE FACTS AR E DIFFERENT. IN THAT CASE, THE DECISION AGAINST THE ASSESSEE IS ON THIS BASIS THAT THE CLAIMS OF THE ASSESSEE IN THAT CASE WERE WHOLLY UNTENABLE IN LAW AND HAD ABSOLUTELY NO FOUNDATION ON WHICH IT COULD BE MADE. IN THE PRE SENT CASE, IN OUR CONSIDERED OPINION, IT CANNOT BE SAID THAT THE VIEW TAKEN BY THE ASSESSEE IS AN IMPOSSIBLE VIEW ALTHOUGH NOT ACCEPTED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN QUANTUM PROCEEDINGS OR BY THE SPECIAL B ENCH OF THE TRIBUNAL IN THE CASE OF GLAXO SMITHKLINE (SUPRA). HENCE, THI S JUDGMENT OF HONBLE DELHI HIGH COURT IS ALSO OF NO HELP TO THE REVENUE IN THE PRESENT CASE. 18 SIIMILARLY THE JUDGMENT OF HONBLE DELHI HIGH CO URT RENDERED IN THE CASE OF ESCORTS FINANCE LTD. (SUPRA) IS ALSO OF NO HELP TO REVENUE IN THE PRESENT CASE BECAUSE THE FACTS ARE DIFFERENT. IN TH AT CASE, IN PARA NO. 15, IT IS OBSERVED BY HONBLE DELHI HIGH COURT THAT THE CLAIM MADE BY THE ASSESSEE FOR DEDUCTION U/S 35D WAS NOT A WRONG CLAI M BUT IT IS I CLEAR CASE OF A FALSE CLAIM. IN THE PRESENT CASE, IT IS NO BOD YS CASE THAT THE CLAIM OF THE ASSESSEE IS A FALSE CLAIM. HENCE, THIS JUDGMENT IS NOT APPLICABLE. 19. NOW WE CONSIDER THE APPLICABILITY OF THE JUDGME NT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT V. GURBACHAN LTD. (SUPRA). IN THAT CASE THE FACTS ARE THAT THE ASSESSEE FILED A RETURN OF INCOME SHOWING AN INCOME OF `.5,000/-. A SUM OF `.48,500/- WAS RECOVE RED IN CASH FROM HIS HOUSE DURING THE SEARCH BY THE CUSTOM AUTHORITIES. REGARDING THE NATURE AND SOURCE OF THIS SUM, THE ASSESSEE EXPLAINED THAT HE HAS OBTAINED A I.T.A.NO. 2698/DEL/2010 12 LOAN OF `.15,000/- FROM ONE SHRI BABU RAM AND `.10, 000/- FROM ONE M/S JAIN BULLION CO. LTD. AND AN AMOUNT OF `.23,374/- W AS RECEIVED BY THE ASSESSEE ON ACCOUNT OF SALE PROCEEDS OF SILVER COIN S. THE THIRD ITEM OF SALE PROCEEDS OF SILVER COIN WAS ACCEPTED IN QUANTU M PROCEEDINGS BUT THE ADDITION OF `.25,000/- REGARDING FIRST TWO ITEMS BE ING TWO LOANS WERE CONFIRMED. IN THE COURSE OF PENALTY PROCEEDINGS, T HE TRIBUNAL DELETED THE PENALTY ON THIS BASIS THAT THERE HAS TO BE SOME POS ITIVE MATERIAL OR POSITIVE CIRCUMSTANCE TO SUGGEST THAT THE ASSESSEE HAS CONCEALED HIS INCOME. ON THE APPEAL OF REVENUE AGAINST THIS TRIB UNAL ORDER, IT WAS HELD BY HON'BLE DELHI HIGH COURT THAT AS PER EXPLANATION 1 TO SECTION 271(1) (C), THE ASSESSEE HAS TO EITHER SUBSTANTIATE HIS EX PLANATION OR HE HAS TO ESTABLISH THAT THE EXPLANATION OFFERED WAS BONA FID E AND ALL FACTS RELATING TO THE SAME AND MATERIAL FOR THE COMPUTATION OF HIS INCOME HAS BEEN DISCLOSED BY THE ASSESSEE. IT WAS ALSO OBSERVED BY HON'BLE DELHI HIGH COURT THAT THE EXPLANATION OF THE ASSESSEE SHOULD B E ACCEPTABLE EXPLANATION AND IT SHOULD NOT BE FANTASTIC AND FANC IFUL ONE. IT IS ALSO OBSERVED BY THE HON'BLE DELHI HIGH COURT THAT THE B URDEN IS ON THE ASSESSEE AND IF HE FAILS TO DISCHARGE THAT BURDEN, THE PRESUMPTION THAT HE HAS CONCEALED THE INCOME OR FURNISHED INACCURATE PA RTICULARS THEREOF IS AVAILABLE TO BE DRAWN. IN THAT CASE, THE ASSESSEE C OULD NEITHER SUBSTANTIATE HIS EXPLANATION NOR COULD ESTABLISH TH AT THE EXPLANATION WAS BONA FIDE AND UNDER THESE FACTS THE PENALTY WAS CON FIRMED BY HON'BLE DELHI HIGH COURT. IN THE PRESENT CASE, WE HAVE NOTE D THAT THE ASSESSEE HAS FURNISHED FULL FACTS AND PARTICULARS BY WAY OF GIVING A NOTE IN THE COMPUTATION OF INCOME. THE EXPLANATION OF THE ASSE SSEE WAS NOT FOUND TO BE FALSE. THE STAND TAKEN BY THE ASSESSEE IS SUPPO RTED BY AN EXISTING ORDER OF LD CIT(A) RENDERED IN THE CASE OF MARUTI U DYOG LTD. (SUPRA) AND ALSO BY A SUBSEQUENT DECISION OF THE TRIBUNAL RENDE RED IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. (SUPRA) AND SUBSEQUE NT TO THAT, A SIMILAR MATTER WAS REFERRED TO A FIVE MEMBERS SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF DCIT V. GLAXO SMITHKLINE CONSUMERS HEAL THCARE LTD. (SUPRA) AND SPECIAL BENCH OF THE TRIBUNAL DECIDED THIS ISSU E AGAINST THE ASSESSEE. CONSIDERING THESE FACTS, WE ARE SATISFIED THAT THE EXPLANATION OF THE I.T.A.NO. 2698/DEL/2010 13 ASSESSEE IS BONA FIDE AND HENCE EXPLANATION 1 TO SE CTION 271(1) (C ) IS NOT ATTRACTED AND THEREFORE, THIS DECISION OF THE HON'B LE DELHI HIGH COURT IS ALSO OF NO HELP TO THE REVENUE IN THE PRESENT CASE. 20. NOW, WE CONSIDER THE APPLICABILITY OF ANOTHER J UDGMENT CITED BY LD DR OF THE REVENUE I.E. THE JUDGMENT OF HON'BLE KERA LA HIGH COURT RENDERED IN THE CASE OF CIT V. KISHORE KUMAR SHAMJI (SUPRA). THE FACTS OF THAT CASE ARE THAT THE ASSESSEE HAS FILED A RETURN OF INCOME SHOWING AN INCOME OF `.86,740/- AND THE RETURNED INCOME WAS ACCEPTED. SU BSEQUENTLY, A SEARCH WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE AND O NE OF THE DOCUMENTS SEIZED WAS A BILL REGARDING PURCHASE OF 500 QTLS. O F PAPERS. IT WAS FOUND THAT IN THE BILL, THE RATE ORIGINALLY RECORDED WAS `.1975/- PER QTL. BUT THE SAME WAS CORRECTED AT `.2975/- PER QTL. AND BY THIS CORRECTION, THERE WAS INCREASE IN PRICE OF `. 5 LAKHS. AFTER THE SEARCH, THE ASSESSEE FILED A LETTER BEFORE THE ITO ENCLOSING A REVISED RETURN AND DECLA RING AN EXTRA INCOME OF `.5 LAKHS ON ACCOUNT OF PROFIT EARNED BY INFLATED P URCHASE BILL AND IT WAS ALSO STATED THAT THIS AMOUNT OF PROFIT WAS OMITTED TO BE SHOWN IN THE ORIGINAL RETURN OF INCOME. THEREAFTER, THE ASSESSI NG OFFICER INITIATED RE- ASSESSMENT PROCEEDINGS AND MADE ADDITION OF `. 5 LA KHS AND IMPOSED A PENALTY ON THIS EXTRA INCOME. THE SAID PENALTY WAS HOWEVER DELETED BY THE TRIBUNAL BUT HON'BLE DELHI HIGH COURT RESTORED THE PENALTY ORDER OF THE ASSESSING OFFICER. IN THAT CASE, THERE IS A POSITIV E FINDING OF CONCEALMENT BEING INCRIMINATING DOCUMENT FOUND IN THE COURSE OF SEARCH AFTER COMPLETION OF ASSESSMENT PROCEEDINGS. HENCE, THE F ACTS OF THIS CASE ARE ENTIRELY DIFFERENT AND THIS JUDGMENT OF HON'BLE KER ALA HIGH COURT CANNOT BE MADE APPLICABLE IN THE PRESENT CASE BECAUSE IN T HE PRESENT CASE, THE CLAIM OF THE ASSESSEE IS A LEGAL CLAIM AND IN THE C OMPUTATION OF INCOME ITSELF, THE ASSESSEE HAS DISCLOSED FULL PARTICULARS AND THIS LEGAL CLAIM OF THE ASSESSEE WAS NOT ACCEPTED BY THE REVENUE AUTHORITIE S AND BY THIS TRIBUNAL IN THE QUANTUM PROCEEDINGS BUT THIS CANNOT BE EQUATED WITH A FALSE CLAIM BY WAY OF INFLATION OF PURCHASE PRICE. HENCE, IN OUR CONSIDERED OPINION, THIS JUDGMENT OF HON'BLE KERALA HIGH COURT IS OF NO HELP OF THE REVENUE IN THE PRESENT CASE. I.T.A.NO. 2698/DEL/2010 14 21. AS PER ABOVE DISCUSSION, WE HAVE NOTED THAT NON E OF THE DECISIONS CITED BY THE LD DR OF THE REVENUE IS OF ANY HELP TO THE REVENUE IN THE PRESENT CASE. WE HAVE ALSO NOTED THAT FULL PARTICUL ARS WERE DISCLOSED BY THE ASSESSEE IN THE COMPUTATION OF INCOME ENCLOSED WITH THE RETURN OF INCOME. WE ALSO NOTED THAT THE STAND TAKEN BY THE A SSESSEE WAS SUPPORTED BY AN EXISTING ORDER OF LD CIT(A) RENDERE D IN THE CASE OF MARUTI UDYOG LTD. (SUPRA) AND IS ALSO SUPPORTED BY A SUBSE QUENT DECISION OF THE TRIBUNAL RENDERED IN THE CASE OF HONDA SIEL POWER P RODUCTS LTD. (SUPRA). SUBSEQUENTLY, A FIVE MEMBERS SPECIAL BENCH WAS CONS TITUTED IN THE CASE OF DCIT V. GLAXO SMITHKLINE CONSUMERS HEALTHCARE LT D. (SUPRA) AND SPECIAL BENCH HAS DECIDED THIS ISSUE AGAINST THE AS SESSEE. UNDER THESE FACTS, IN OUR CONSIDERED OPINION, THE STAND TAKEN B Y THE ASSESSEE AT THE TIME OF FILING OF RETURN OF INCOME WAS A POSSIBLE A ND PLAUSIBLE VIEW AND THEREFORE, THE PENALTY IS NOT JUSTIFIED. THE JUDGM ENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF CIT V. RELIANCE PETROPRODUC TS LTD. REPORTED IN 327 ITR 158 ALSO SUPPORTS THE CASE OF THE ASSESSEE BECA USE IN THAT CASE, IT WAS HELD BY HON'BLE APEX COURT THAT MERE MAKING OF A CLAIM BY ITSELF WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE AND SUCH A CLAIM MADE IN THE RETURN OF INCOME CANNOT AMOUNT TO CONCEALMENT OF INCOME OR FURNISHING OF IN ACCURATE PARTICULARS OF INCOME UNLESS IT IS FOUND THAT ANY DETAILS SUPPL IED BY THE ASSESSEE IN THIS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. IN OUR CONSIDERED OPINION, THIS JUDGMENT OF HON'BLE APEX C OURT SUPPORTS THE CASE OF THE ASSESSEE IN THE PRESENT CASE AND RESPEC TFULLY FOLLOWING THIS JUDGMENT, WE DELETE THE PENALTY. 22. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. 23. ORDER PRONOUNCED IN OPEN COURT ON 27TH DAY OF MAY, 2011. SD/- SD/- ( I. P. BANSAL) (A K GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27TH MAY, 2011 I.T.A.NO. 2698/DEL/2010 15 HMS. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI