PPG ASIAN PAINTS P.LTD, MUMBAI V. DCIT RG LTU, MUMBAI

ITA 3666/MUM/2016

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7859 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 26-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJEET PATANKAR
• Keywords: Question of law; Initiation of penalty proceedings; Capital receipt; Set aside
• Section: 271(1)(c); 115JB; 201; 274; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G , MUMBAI BEFORE S HRI RAJESH KUMAR (AM ) AND SHRI RAM LAL NEGI (JM) ITA NO. 3666 /MUM/2016 ASSESSMENT Y EAR: 2008 - 09 PPG ASIAN PAINTS PRIVATE LIMITED, (FORMERLY KNOWN AS ASIAN PPG INDUSTRIES LIMITED), U NIT NO. 1, 4 TH FLOOR, PHOENIX MARKETCITY, LBS MARG, KURLA (WEST), MUMBAI - 400070 PAN: AAACA8832H VS. THE DE PUTY COMMISSIONER OF INCOME TAX - 2 RANGE LTU, CENTRE 1 WORLD TRADE CENTRE, CUFFE PARADE, MUMBAI - 400005 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MADHUR AGARWAL ( AR ) REVENUE BY : SHRI ABHIJEET PATANKAR ( CIT D R ) DATE OF HEARING: 22 /04 /201 9 DATE OF PRONOUNCEMENT: 19 / 0 7 /201 9 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 80.03.2016 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 1 (FOR SHORT THE CIT(A) , MUMBAI, FOR THE ASSESSMENT YEAR 2008 - 09 , WHEREBY THE LD. CIT(A) HAS DISMISSED T HE APPEAL FILED BY THE ASSESSEE AGAIN ST THE PENALTY ORDER PASSED U/S 271 (1) (C) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2. THE B RIEF FACTS OF THE CASE ARE THAT THE ASSESSEE ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF PAINTS, FILED ITS RETURN OF INCOME FOR THE ASSESSM ENT YEAR UNDER CONSIDERATION DECLARING THE TOTAL INCOME AT RS. 53,48,33,015/ - . THE AO PASSED ASSESSMENT ORDER U/S 143 (3) DETERMINING THE TOTAL INCOME AT RS. 69,10,58,180/ - UNDER THE NORMAL PROVISIONS OF THE ACT AND RS. 88,02,64,656/ - UNDER SECTION 115JB O F THE ACT INTER ALIA MAKING ADDITION OF SOLATIUM AMOUNTING TO RS. 20.82 CRORE RECEIVED FROM IMPERIAL CHEMICAL 2 ITA N O. 3666 / MUM/2016 ASSESSMENT YEAR: 2008 - 0 9 INDUSTRIES LTD. ICI LIMITED (ICI), TREATING THE SAME AS REVENUE RECEIPT AS AGAINST CAPITAL RECEIPT CLAIMED BY THE ASSESSEE . IN THE FIRST APPEAL, TH E LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE AO . THE ASSESSEE CHALLENGED THE ACTION OF THE LD. CIT(A) BEFORE THE ITAT. THE ITAT FURTHER CONFI RMED THE ACTION OF THE LD. CIT( A). ACCORDINGLY, THE AO INITIATED PENALTY PROCEEDINGS AND IMPOSED PENALTY OF RS. 5,30,98,411/ - U/S 271(1) (C) OF THE ACT. THE LD. CIT (A) DISMISSED THE APPEAL FILED BY THE ASSESSEE AGAINST THE PENALTY ORDER PASSED BY THE AO . AGAINST THE SAID ORDER, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3 . THE ASSESSEE HAS CHALLENGED THE IMPUGNE D ORDER PASSED BY THE LD. CIT (A) ON THE FOLLOWING EFFECTIVE GROUNDS : - GROUND I - LEVY OF PENALTY U/S 271 (1) (C) OF THE INCOME TAX ACT, 1961 (THE ACT) AMOUNTING TO RS. 5,30,98,411: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONBLE COMMISSIONER OF INCOME TAX (APPEALS) - 1, MUMBAI [THE CIT (A)] ERRED IN CONFIRMING THE ACTIONS OF THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE - RANGE LTU, MUMBAI (THE AO) IN LEVY OF PENALTY AMOUNTING TO RS. 5,30,98,411 U/S 271 (1) (C) OF THE ACT BY TREATI NG THE SOLATIUM RECEIVED AMOUNTING TO RS. 20.83 CRORES AS REVENUE RECEIPT INSTEAD OF CAPITAL RECEIPTS AS DONE BY THE APPELLANT ON THE ALLEGED GROUND THAT THE APPELLANT HAD FURNISHED INACCURATE PARTICULARS OF INCOME. 2. HE FAILED TO APPRECIATE AND OUGHT TO HA VE HELD THAT: (A) THE APPELLANT HAD MADE ADEQUATE DISCLOSURES IN THE FINANCIAL STATEMENTS INCLUDING NOTES TO ACCOUNTS AND TAX AUDIT REPORT AND FURNISHED ALL THE RELEVANT DETAILS DURING THE COURSE OF ASSESSMENT AS WELL AS APPELLATE PROCEEDINGS AND THUS THERE IS NO QUESTION OF LEVY OF PENALTY. (B) IN THE ASSESSMENT ORDER, NO CLEAR DIRECTIONS FOR INITIATION OF PENALTY PROCEEDINGS WERE MENTIONED BY THE AO AND IN THE NOTICE U/S 274 OF THE ACT, NO LIMB I.E. FURNISHING INACCURATE PARTICULARS OR CONCEALMENT OF INCOME WAS APPROPRIATELY MARKED BY THE AO. (C) MERE ADDITION IN QUANTUM PROCEEDINGS DOES NOT JUSTIFY LEVY OF PENALTY UNDER THE ACT. 3 ITA N O. 3666 / MUM/2016 ASSESSMENT YEAR: 2008 - 0 9 (D) THE ISSUE DEBATABLE AND ESSENTIALLY A QUESTION OF LAW THEREBY NOT BEING A FIT CASE FOR LEVY OF PENALTY. 3. THE APPELLANT PRAYS THAT THE LEVY O F PENALTY AMOUNTING TO RS. 5,30,98,411 U/S 271 (1) (C) OF THE ACT BE DELETED. 4. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT (A) HAS WRONGLY CONFIRMED THE PENALTY IMPOSED BY THE AO U/S 271 (1) (C) OF THE ACT ON THE BASIS OF A DDITION OF 20.83 CRORES MADE BY TREATING THE SOLATIUM RECEIVED AS REVENUE RECEIPT AS AGAINST THE CAPITAL RECEIPT CLAIMED BY THE ASSESSEE. THE LD. COUNSEL SUBMITTED BEFORE US THAT THE ASSESSEE A DIVISION OF ASIAN PAINTS ACQUIRED ADVANCED REFINISH 2K BUSINE SS FROM ICI LTD. AS A GOING CONCERN ON SLUM SALE BASIS FOR A TOTAL CONSIDERATION OF RS. 48.80 CRORE VIDE AGREEMENT DATED 06.03.2007. THIS CONSIDERATION WAS ALLOCATED BY THE ASSESSEE TOWARDS ITS ASSETS. CLAUSE 13.7 OF THE AGREEMENT SPECIFIED THAT IN CASE A THIRD PARTY ACQUIRES CONTROL OF THE HOLDING COMPANY OF ICI AND SUCH THIRD PARTY IS ENGAGED IN THE COMPETING BUSINESS AS THAT OF THE ASSESSEE, THEN THE ICI OR SUCH PARTY OR ANY OF ITS AFFILIATES SHALL BE LIABLE TO PAY THE ASSESSEE AN AMOUNT OF RS . 1,10,00,0 00/ - PER MONTH COMMENCING FROM THE DATE OF ACQUISITION OF SUCH CONTROL UP TO JULY, 2009. IMPERIAL CHEMICAL INDUSTRIES PLC THE HOLDING COMPANY OF ICI INDIA WAS ACQUIRED BY AKZO NOBEL NV IN JANUARY, 2008. CONSEQUENTLY, IN TERMS OF THE AFORESAID AGREEMENT, TH E ASSESSEE COMPANY BECAME ENTITLED TO RECOVER FROM ICI INDIA AN AMOUNT OF RS. 1,10,00,000/ - PER MONTH FROM 2 ND JANUARY, 2008 TILL 30 TH JULY, 2009 AGGREGATING TO RS. 20,82,90,323/ - AS SOLATIUM. ACCORDINGLY, THE ENTIRE AMOUNT WAS ACCOUNTED FOR AS RECEIVABLE FROM ICI INDIA WITH CORRESPONDING CREDIT TO WRITTEN DOWN VALUE (WDV) OF INTANGIBLE ASSETS AS ON 1 ST JANUARY, 2008, WHEREBY THE VALUE OF GOODWILL AND NON COMPETE FEES WAS REDUCED TO NIL AND BALANCE AMOUNT WAS ALLOCATED TO OTHER INTANGIBLE ASSETS IN THE PROP ORTION OF THEIR WDV. THE ASSESSEE CLAIMED THE RECEIPT AS CAPITAL, HOWEVER THE AO TREATED THE SAME AS REVENUE RECEIPT. THE LD. CIT (A) CONFIRMED THE ADDITION MADE BY THE AO. IN FURTHER APPEAL, THE ITAT ALSO CONFIRMED THE FINDINGS OF THE LD. CIT (A). THE ASS ESSEE CHALLENGED THE DECISION OF THE ITAT BEFORE THE HONBLE JURISDICTIONAL 4 ITA N O. 3666 / MUM/2016 ASSESSMENT YEAR: 2008 - 0 9 HIGH COURT AND THE HONBLE COURT ADMITTED THE QUESTIONS RAISED IN THE APPEAL . THE LD. COUNSEL FURTHER SUBMITTED THAT SINCE THE HONBLE HIGH COURT HAS ADMITTED THE APPEAL OF THE ASS ESSEE, THE ISSUE IS DEBATABLE, THEREFORE, THE LD. CIT (A) HAS WRONGLY CONFIRMED THE ORDER PASSED BY THE AO. 5. THE LD. COUNSEL FURTHER CONTENDED THAT PENALTY U/S 271 (1) (C) CAN BE IMPOSED ONLY IF THE AUTHORITY CONCERNED IS SATISFIED THAT THE ASSESSEE HA S CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IN THE PRESENT CASE, THE AO HAS IMPOSED PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE ON THE GROUND THAT THE ADDITION OF RS. 20.83 C RORE S MADE BY HIM TREATING THE SAME AS REVENUE RECEIPT HAS BEEN CONFIRMED BY THE CIT (A) AND ITAT. THE LD. COUNSEL FURTHER SUBMITTED THAT CONFIRMATION OF ADDITION BY THE ITAT DOES NOT IPSO FACTO MAKE THE ASSESSEE LIABLE FOR PENALTY U/S 271 (1) (C). THE LD. COU NSEL PLACING RELIANCE OF THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETORPRODUCTS PVT. LTD . , SUBMITTED THAT REJECTION OF CLAIM BY THE REVENUE ITSELF WOULD NOT ATTRACT PENALTY U/S 271(1)(C) OF THE ACT. THE LD. COUNSEL FURTHER POINTED OUT THAT IN NOTICE ISSUED TO THE ASSESSEE U/S 274 OF THE ACT THE AO HAD NOT MENTIONED THE LIMB UNDER WHICH HE INTENDED TO PASS ORDER IMPOSING PENALTY U/S 271(1)(C) OF THE ACT. 6. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) RELYING ON THE CONCURRENT FINDINGS OF THE AUTHORITIES BELOW SUBMITTED THAT SINCE THE ITAT HAS CONFIRMED THE ADDITION MADE BY THE AO THERE IS NO MERIT IN THE APPEAL OF THE ASSESSEE. SINCE, THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME BY CLAIMING THE RECEIPT IN QUESTION AS CAPITAL RECEIPT, THE LD. CIT (A) HAS RIGHTLY CONFIRMED THE PENALTY IMPOSED BY THE AO. HENCE, THE APPEAL FILED BY THE ASSESSEE IS LIABLE TO BE DISMISSED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND ALSO GONE THROUGH THE ENTIRE MATERIAL ON RECORD IN THE LIGHT OF THE RIVAL CONTENTIONS OF THE PARTIES. THE ONLY GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT (A) HAS WRONGLY UPHELD THE PENALTY IMPOSED U/S 271 (1) (C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE. NO DOUBT IN THE PRESENT CASE, THE 5 ITA N O. 3666 / MUM/2016 ASSESSMENT YEAR: 2008 - 0 9 ADDITION MADE BY THE AO HAS BEEN CONFIRMED BY THE FIRST APPELLATE AUTHORITY AS WELL AS BY THE ITAT AND THE FURTHER APPEAL AGAINST THE ITAT ORDER IS PENDING DISPOSAL BEFORE THE HONBLE HIGH COURT. THE CONT ENTION OF THE ASSESSEE IS THAT THE AMOUNT IN QUESTION WAS RECEIVED BY THE ASSESSEE AS COMPENSATION IN LIEU OF IMPAIRMENT OF BUSINESS IN TERMS OF CLAUSE 13.7 OF THE BUSINESS AGREEMENT DATED 06.03.2007. THE ASSESSEE FURTHER CONTENDED THAT AS PER THE DEFINITI ON GIVEN IN PARA 14.06 BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA (ICAI), THE RECEIPT IN QUESTION CANNOT BE CONSIDERED AS REVENUE RECEIPT , SINCE , IT DOES NOT ARISE FROM THE SALE OF GOODS, RENDERING OF SERVICES ETC. P ARA 14.06 OF THE ACCOUNTING STAN DARD ISSUED BY THE ICAI DEFINES THE TERM REVENUE AS UNDER: - 14.06 - THE GROSS INFLOW OF CASH, RECEIVABLE OR OTHER CONSIDERATION ARISING IN THE COURSE OF THE ORDINARY ACTIVITIES OF AN ENTERPRISE FROM THE SALE OF GOODS, FROM RENDERING OF SERVICES, AND FRO M THE USE BY OTHERS OF ENTERPRISE RESOURCES YIELDING INTEREST, ROYALTIES AND DIVIDENDS. REVENUE IS MEASURED BY THE CHARGES MADE TO CUSTOMERS OR CLIENTS FOR GOODS SUPPLIED AND SERVICES RENDERED TO THEM AND BY THE CHARGES AND REWARDS ARISING FROM THE USE OF RESOURCES BY THEM. IT EXCLUDES AMOUNTS COLLECTED ON BEHALF OF THIRD PARTIES SUCH AS CERTAIN TAXES. IN AN AGENCY RELATIONSHIP, THE REVENUE IS THE AMOUNT OF COMMISSION AND NOT THE GROSS INFLOW CASH, RE CEIVABLE OR OTHER CONSIDERATION. 8. AS PER THE PROVISIO NS OF THE ACT, P ENALTY U/S 271 (1) (C) READ WITH EXPLANATION (1) CAN BE IMPOSED IF THE AUTHORITY CONCERNED IS SATISFIED THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME , IF THE SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE AUTHORITY CONCERNED TO BE FALSE OR SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT ALL THE FACTS RE LATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, THEN THE AMOUNT ADDED TO THE INCOME SHALL BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED FOR THE PURPOSE OF 6 ITA N O. 3666 / MUM/2016 ASSESSMENT YEAR: 2008 - 0 9 CLAUSE (C) OF SUB - SECTION (1) OF SECTION 271 OF THE ACT. IN THE PRESENT CASE, THE ASSESSEE HAS GIVEN EXPLANATION WHICH IS IN OUR OPINION BONA FIDE AS THE ASSESSEE HAS TAKEN THE RECEIPT IN QUESTION AS CAPITAL IN VIEW OF THE DEFINITION OF REVENUE GIVEN BY THE ICAI IN PARA 14.06 OF THE ACCOUNTING STANDARD . THE ASSESSEE HAS REFLECTED THE TRANSACTION IN ITS BOOKS OF ACCOUNT AND THE REVENUE HAS NOT DISPUTED THE TRANSACTION. UNDER THESE CIRCUMSTANCES, T HE ONLY ISSUE REMAINS TO BE DETERMINED, WHICH IS ESSENTIAL TO ADJUDIC AT E THE SOLE ISSUE IN THIS CASE IS , WHETHER THE CLAIM OF THE ASSESSEE IS BONA FIDE IN THE LIGHT OF THE FACTS OF THE CASE AND THE EVIDENCE ON RECORD AND WHETHER THE ASSESSEE HAS OFFERED EXPLANATION AND SUBSTANTIATE D THAT EXPLANATION OFFERED IS BONA FIDE AND T HAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM. 9. IN THE PRESENT CASE, ADMITTEDLY, THE ASSESSEE HAS REFLECTED THE TRANSACTION IN ITS BOOKS OF ACCOUNT. THE ASSESSEE HAS ALSO EXPLAINED THE ENTIRE TRANSACTION BEFORE THE AO VIDE WRITTEN SUBMISSIONS DATED 03.09.2011 MADE IN RESPONSE TO THE NOTICE ISSUE U/S 143(2) OF THE ACT. THE ASSESSEE HAS BASED ITS CLAIM ON THE DEFINITION OF REVENUE GIVEN BY THE ICAI IN PARA 14.06 REFERRED ABOVE. SINCE T HE HONBLE HIGH COURT HAS ADMITTED THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE ITAT, THERE IS MERIT IN THE CONTENTION OF THE ASSESSEE THAT THE ISSUE WAS DEBATABLE AT THE TIME OF FILING OF RETURN AND THE SAME IS STILL DEBATABLE AS THE HONBLE HIGH COURT HAS ADMITTED THE QUESTION OF LAW RAISED BY THE ASSESSEE. IN THE LIGHT OF THE AFORESAID FACTS, IT CANNOT BE CONCLUDED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME. AS PER THE SETTLED LAW, P ENALTY PROVISIONS CANNOT BE INVO KED WHERE TWO VIEWS ARE POSSIBLE. IN THE PRESENT CASE SINCE THE HONBLE HIGH COURT HAS ADMITTED THE APPEAL OF THE ASSESSEE ON THE LEGAL ISSUE , WE CANNOT DISCARD THE CONTENTION OF THE ASSESSEE THAT SINCE THE ISSUE IS DEBATABLE, THE PENALTY IMPOSED U/S 271 ( 1) (C) OF THE ACT IS BAD IN LAW. 10. IN THE CASE OF CIT VS. RELIANCE PETORPRODUCTS PVT. LTD. (SUPRA), THE HONBLE SUPREME COURT HAS HELD THAT THE PENALTY PROVISION CANNOT BE INVOKED UNLESS THE CASES STRICTLY COVERED BY THE PROVISIONS. MAKING AN INCORRECT CLAIM IN LAW 7 ITA N O. 3666 / MUM/2016 ASSESSMENT YEAR: 2008 - 0 9 CANNOT TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS. THE OBSERVATIONS OF THE HONBLE SUPREME COURT READ AS UNDER: - 9. WE ARE NOT CONCERNED IN THE PRESENT CASE WITH THE MENS REA. HOWEVER, WE HAVE TO ONLY SEE AS TO WHETHER IN THIS CASE, A S A MATTER OF FACT, THE ASSESSEE HAS GIVEN INACCURATE PARTICULARS. IN WEBSTERS DICTIONARY, THE WORD INACCURATE HAS BEEN DEFINED AS: - NOT ACCURATE , NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH, ERRONEOUS, AS AN INACCURATE STATEMENTS, COPY OR TRANSCRIPT . WE HAVE ALREADY SEEN THE MEANING OF THE WORD PARTICULARS IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORDS IN CONJUNCTION, THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. SUCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PE NALTY UNDER SECTION 271 (1) (C) OF THE ACT. A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO TH E INACCURATE PARTICULARS. 11. IN OUR CONSIDERED OPINION, THE CLAIM OF THE ASSESSEE IN THE PRESENT CASES IS BASED ON THE BONA FIDE BELIEF THAT THE RECEIPT IN QUESTION IS A CAPITAL RECEIPT AND THE ASSESSEE HAS ESTABLISHED THAT THE EXPLANATION OFFERED BY IT IS ALSO BONA FIDE AND THAT ALL THE FACTS RELATING TO AND MATERIAL TO COMPUTATION OF ITS INCOME HAVE BEEN DISCLOSED WITHIN THE MEANING OF EXPLANATION (1) TO SECTION 271(1)(C) OF THE ACT. I N THE LIGHT OF THE JUDGMENT OF THE HONBLE SUPREME COURT AFORESAID, REJECTION OF THE CLAIM OF THE ASSESSEE BY THE REVENUE AND BY THE TRIBUNAL DO NOT IPSO FACTO MAKE THE ASSESSEE LIABLE FOR PENALTY U/S 271 (1) (C) OF THE ACT. HENCE, IN VIEW OF THE DISCUSSION MADE IN THE FORGOING PARAS IN THE LIGHT OF THE FACTS AND CIRCUMSTA NCES OF THE CASE AND THE EVIDENCE ON RECORD AND IN THE LIGHT OF THE PRINCIPLES OF LAW LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETORPRODUCTS PVT. LTD. (SUPRA), WE ARE OF THE CONSIDERED VIEW THAT 8 ITA N O. 3666 / MUM/2016 ASSESSMENT YEAR: 2008 - 0 9 THE IMPUGNED ORDER PASSED BY TH E LD. CIT (A) IS NOT IN ACCORDANCE WITH THE ESTABLISHED PRINCIPLES OF LAW. WE THEREFORE, ALLOW THE APPEAL OF THE ASSESSEE AND SET ASIDE THE IMPUGNED ORDER PASSED BY THE LD. CIT (A). ACCORDINGLY, WE DIRECT THE AO TO DELETE THE PENALTY LEVIED U/S 271 (1) (C) OF THE ACT. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2008 - 2009 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH JULY , 2019 . SD/ - SD/ - ( RAJESH KUMAR ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 19 / 07 / 201 9 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI