ACIT 15(3), MUMBAI V. NEELKANTH PALM REALTY, MUMBAI

ITA 3922/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4106 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 30-05-2014
• Court: TRIBUNAL
• Department Lawyers: S R KIRTANE
• Assessee Lawyers: GYNESHWAR KAT A RAM
• Keywords: Unexplained cash credit; Question of law; Wrong claim; Difference of opinion; Revised return
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B , BENCH MUMBAI BEFORE SHRI R.C.SHARMA , A M & SHRI AMARJIT SINGH , J M ./ ITA NO . 3 922 /MUM /20 1 4 ( / ASSESSMENT YEAR : 20 0 8 - 20 09 ) ACIT - 15(3), MUMBAI - 400007 VS. NEELKANTH PALM REALTY, FINE HOUSE, FIFTH FLOOR, ANANDJI LANE, M.G.ROAD, GHATKOPER(E), MUMBAI - 400077 ./ ./ PAN/GIR NO. : A A EEN 5224 B ( / APPELLANT ) .. ( / RESPONDENT ) /REVE NUE BY : SHRI S.R.KIRTANE /ASSESSEE BY : SHRI GYNESHWAR KATARAM / DATE OF HEARING : 30 / 1 1 / 2015 / DATE OF PRONOUNCEMENT 03/02 /201 6 / O R D E R PER R.C.SHARMA (A.M) : TH IS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) , MUMBAI, FOR THE ASSESSMENT YEAR 20 08 - 20 09 , IN THE MATTER OF IMPOSITION OF PENALTY U/S. 271(1)(C) OF THE I.T. ACT . 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT AS PER THE R ETURN FILED, THE ASSESSEE DECLARED AN INCOME OF RS.4,07,18,247 / - AND ALSO CLAIMED A DEDUCTION OF RS.1,91,12,692/ - U/S.80IB(10) IN RESPECT OF ROYALE HOUSING PROJECT. THE ASSESSEE STATED BEFORE THE AO THAT IN ROYALE HOUSING PROJECT, THE BUILT UP AREA OF CERT AIN RESIDENTIAL UNITS IS BELOW 1000 SQ.FT. WHEREAS BUILT UP AREA IN RESPECT OF OTHER RESIDENTIAL UNITS EXCEEDS 1000 SQ.FT. ACCORDINGLY, THE ASSESSEE HAS CLAIMED DEDUCTION U/S.80IB(10) ON PROPORTIONATE BASIS IN RESPECT OF ONLY ITA NO. 3922 /14 2 THOSE RESIDENTIAL UNITS, BUILT UP AREA OF WHICH IS LESS THAN 1000 SQ.FT.. A NOTE TO THIS EFFECT WAS ALSO APPENDED TO THE STATEMENT OF TOTAL INCOME AS MENTIONED BY THE AO IN PARA 4 OF ASSESSMENT ORDER. FINALLY, THE AO HAS DISALLOWED THE DEDUCTION U/S.80IB(10) RS. 1,91,12,692/ - CLAIMED BY THE ASSESSEE IN RESPECT OF THOSE RESIDENTIAL UNITS HAVING BUILT UP AREA LESS THAN 1000 SQ.FT. ON PROPORTIONATE BASIS. IT HAS BEEN NOTED BY THE AO IN PARA 11.1 OF THE ASSESSMENT ORDER THAT THE TOTAL PROFITS FROM ROYALE HOUSING PROJECT IS 5.98 CRORES AND AS SESSEE HAS CLAIMED DEDUCTION @32% OF SUCH PROFITS BEING IN PROPORTION TO THE RATIO OF ELIGIBLE UNITS AND THUS, THE RESIDENTIAL UNITS HAVING AREA EXCEEDING 1000 SQ.FT. IS 68% OF THE PROJECT. SUBSEQUENTLY, VIDE THE IMPUGNED ORDER DATED 19.02.2013, THE AO HA S LEVIED PENALTY ALSO FOR SUCH DISALLOWANCE. 3. BY THE IMPUGNED ORDER, THE CIT(A) DELETED THE PENALTY AFTER OBSERVING AS UNDER : - THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE ASSESSEE HAVE BEEN CONSIDERED CAREFULLY. IT IS NOT IN DISPUTE THAT ASSESSEE HAS DISCLOSED THE FACT OF PROPORTIONATE CLAIM OF DEDUCTION U/S.80IB( 10) IN RESPECT OF ROYALE HOUSING PROJECT BEFORE THE A.O AND ALSO THE BASIS OF SUCH CLAIM. THE A.O HAS EXAMINED THE CLAIM AND DISALLOWED THE SAME. HOWEVER, ANY FACTUAL SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE A.O, WHETHER DURING ASSESSMENT PROCEEDINGS OR DURING PENALTY PROCEEDINGS HAS NOT BEEN FOUND TO BE FALSE OR INCORRECT OR MISLEADING AS PER THE ASSESSMENT ORDER AND PENALTY ORDER PASSED. FURTHER, COPY OF ASSESSMENT ORDER FOR A.Y. 200 7 - 08 IN THE CASE OF THE ASSESSEE HAS BEEN FILED IN WHICH DEDUCTION OF RS.6.52 CRORES U/S.80IB(10) IN RESPECT OF ROYALE HOUSING PROJECT HAS BEEN DISALLOWED FOR THE SIMILAR REASONS AND ON SIMILAR FACTS, SINCE THE HOUSING PROJECT IS THE SAME. BUT AS EVIDENCE D FROM THE ASSESSMENT ORDER FOR A.Y. 2007 - 08, NO PENALTY PROCEEDINGS U/S.271(1)(C) WERE EVEN INITIATED. HOWEVER, IN THIS YEAR, PENALTY HAS BEEN LEVIED FOR THE REASONS ALREADY MENTIONED. 3.7 DURING APPEAL, THE ASSESSEE HAS FILED A WRITTEN SUBMISSION DATED 05 - 02 - 2013 , COPY OF WHICH IS AVAILABLE ON RECORD, WHEREIN IT HAS ENCLOSED A COPY OF ITS T AX AUDIT REPORT IN PART TOGETHER WITH ITA NO. 3922 /14 3 COPY OF ANNEXURE 17 WHICH EXPLAINS THE DEDUCTION CLAIMED BY THE ASSESSEE UJS.80IB(10). IN THE SAID NOTE, THE ASSESSEE AS STATED AS UNDER : - 'L. THE PROJECT HAS BEEN APPROVED BEFORE 31.03.2007 BY A LOC A L AUTHORITY (VIZ. T.M.C) II. THE PROJECT IS A HOUSING PROJECT COMPRISED ONLY OF RESIDENTIAL UNITS. III. THE SIZE OF THE PLOT MARRIED TO THE PROJECT IS MORE THAN ONE ACRE. IV. THE DEVELOPMENT AND CONSTRUCTION WORK HAS COMMENCED DURING THE YEAR ENDED 31.03.2004 (I.E. AFTER 01.10.98). V. THE DEVELOPMENT AND CONSTRUCTION OF THE PROJECT WAS SUBSTANTIALLY COMPLETED IN 2007. THE APPLICATION FOR OCCUPATION CERTIFICATE HAS BEEN MADE ON 27.9.2007 TO LOCAL AUTHORITY. THE ASSESSEE HAS REPRESENTED THAT BUILT UP AREA OF EACH RESIDENTIAL UNIT IN THE PROJECT DOES NOT EXCEED 1000 SQ. FT. HOWEVER, IN CERTAIN CASES, ON ACCOUNT OF AMALGAMATION OF TWO ADJACENT UNITS BY THE BUYERS, BUILT UP AREA CONSIDERED ON THE BASIS OF AGGREGATION OF TWO UNITS EXCEEDS 1000 SQ.FT. THE ASSESSEE IS OF THE VIEW THAT ANY SUCH COMBINATION OF ADJACENT TWO INDEPENDENT UNITS BY THE PURCHASER CANNOT INJURE THE CLAIM OF THE ASSESSEE. HOWEVER, TO MITIGATE CHANCES OF LITIGA TION, PRESENTLY, THE ASSESSEE RESTRICTS ITS CLAIM TO AN AMOUNT PROPORTIONATE TO RESIDENTIAL UNITS SOLD HAVING BUILT UP AREA UPTO 1000 SQ.F.T. BY RELYING ON DECISION OF KOLKATTA TRIBUNAL IN THE CASE OF BANGAL AMBUJA HOUSING DEVELOPMENT LTD. [ITA NO.1595/KOL /2003 ] (DEPARTMENT'S APPEAL AGAINST TRIBUNAL'S DECISION WAS REJECTED BY CALCUTTA HIGH COURT VIDE ORDER DATED 28.03.07) AS ALSO CHENNAI TRIBUNAL DECISION IN THE CASE OF T - T/S. ARUN EXCELLO FOUNDATION PVT. LTD. V/SO ACIT [108 TT] 71 (CHENNAI)] AND MUMBAI TRI BUNAL IN THE ASSESSEE OF SAROJ SALES ORGANISATION V/S. ITO (ITA 'NO. 4008/10/07) DT. 24.01.08 RENDERED IN THE CONTEXT OF SECTION 80IB(10). BASED ON ABOVE PROPOSITION, DEDUCTION ADMISSIBLE UNDER SECTION 80IB(10) IS OF RS.19,112,692/ - . A CERTIFICATE IN FOR M 10CCB OF EVEN DATE IS ENCLOSED SEPARATELY. 3.8 WE HAVE BEEN INFORMED BY THE ASSESSEE THAT, TO THE BEST OF HIS PRESENT UNDERSTANDING OF LAW, THE ASSESSEE IS ENTITLED TO DEDUCTION UNDER SECTION 80IB( 10) AND NO OTHER PROVISIONS OF CHAPTER VIA OF THE ACT ARE APPLICABLE TO ENTERPRISE UNDER AUDIT. THE ASSESSEE, HOWEVER, RESERVES HIS RIGHT TO CLAIM SUCH DEDUCTION UNDER CHAPTER VI - A AS MAY APPEAR TO BE ADMISSIBLE TO THE ENTERPRISE. IT HAS FURTHER RELIED UPON THE VARIOUS DECISIONS AND HAS ARGUED THAT IN HIS C ASE MERELY A CLAIM OF DEDUCTION HAS BEEN REJECTED AND THEREFORE, PENALTY IN A C ASE WHETHER DEDUCTION OF A CLAIM IS REJECTED ITA NO. 3922 /14 4 CANNOT BE LEVIED. IT IS SUBMITTED HAT PRO - RATA DEDUCTION U/S.80IB(10) WAS CLAIMED RELYING ON I TAT CALCUTTA IN THE CAS E OF M/S. BENGA L AMBUJA HOUSING DEVELOPMENTS LTD. WHICH HAS BEEN UPHELD BY CALCUTTA HIGH COURT AND THE SAME HAS NOT BEEN ACCEPTED BY THE A.O FOR THE REASONS MENTIONED BUT THIS CANNOT FORM THE BASIS OF LEVY OF PENALTY SINCE THE ELIGIBILITY OF DEDUCTION U/S.80IB(10) ON THE FACTS OF THE CASE IS DEBATABLE. 3.9 THE ASSESSEE HAS FILED FURTHER WRITTEN SUBMISSION AND REITERATED ITS SUBMISSION MADE EARLIER. IT HAS ALSO DRAWN ATTENTION TO THE NOTE NO.3 FORMING PART OF ITS COMPUTATION OF TOTAL INCOME STATED TO BE FILED BEFORE A.O THAT READS AS UNDER : - 'NOTE 3: IN RESPECT 'OF ROYALE HOUSING PROJECT, BUILT UP AREA OF EACH RESIDENTIAL UNIT IN THE PROJECT DOES NOT EXCEED 1000 SQ. FT. HOWEVER, IN CERTAIN CASES, ON ACCOUNT OF AMALGAMATION OF TWO ADJACENT UNITS BY THE BUYERS, BUILT UP AREA CONSIDERED ON THE BASIS OF AGGREGATION OF TWO UNITS EXCEEDS 1000 SQ.FT. THE ASSESSEE IS OF THE VIEW THAT ANY SUCH COMBINATION OF ADJACENT TWO INDEPENDENT UNITS BY THE PURCHASER CANNOT INJURE THE CLAIM OF THE ASSESSEE. HOWEVER, TO MITIGATE CHANCES OF L ITIGATION, PRESENTLY, THE ASSESSEE RESTRICTS ITS CLAIM TO AN AMOUNT PROPORTIONATE TO RESIDENTIAL UNITS HAVING BUILT UP AREA UPTO 1000 SQ. FT. BY RELYING ON DECISION OF KOLKATTA TRIBUNAL IN THE CASE OF BANGAL AMBUJA HOUSING DEVELOPMENTS LTD. [ITA NO. 1595/K OL/2003J (DEPARTMENT'S APPEAL AGAINST TRIBUNAL'S DECISION WAS REJECTED BY CALCUTTA HIGH COURT VIDE ORDER DATED 28.03.07) AS ALSO CHENNAI TRIBUNAL DECISION IN THE CASE OF T - T/S. ARUN EXCELLO FOUNDATION PVT. LTD. VIS. ACIT [108 TT (CHENNAI)J RENDERED IN THE CONTEXT OF SECTION 801B(10). BASED ON ABOVE PROPOSITION, DEDUCTION ADMISSIBLE UNDER SECTION 801B(10) IS WORKED OUT AT RS.19,L12,692/ - ON PRORATION BASIS AS REFERRED ABOVE.' 3.10 ON THIS BASIS, IT HAS BEEN CLAIMED THAT FULL DISCLOSURE OF FACTS WAS MADE REGARDING COMBINED UNITS AND ONLY PROPORTIONATE DEDUCTION OF CLAIM U/S.80IB(10) WAS CLAIMED IN RESPECT OF ONLY THOSE UNITS HAVING BUILT UP AREA UPTO 1000 SQ.FT. AND THEREFORE, FULL DISCLOSURE WAS MADE DURING ASSESSMENT AND ALSO IN THE RETURN AND THEREFORE, PENALTY IN SUCH A CASE SHOULD NOT BE LEVIED. 3.11 THE LD. AR HAS ALSO REFERRED TO THE JUDGEMENT OF HON'BLE SUPREME COURT IN THE' CASE OF RELIANCE PETROPRODUCTS (P) LTD. [322 ITR 158] AND HAS ARGUED THAT IT HAS MADE THE CLAIM ON CERTAIN VALID BASIS. THE CLAIM MADE IS NOT AN ILLEGAL CLAIM. NO FACT OR PARTICULARS OF ITS INCOME AS SUBMITTED BY IT HAVE BEEN FOUND TO BE FALSE AND APPROPRIATE DISCLOSURE IN THE RETURN HAS BEEN MADE AND THEREFORE, IT CANNOT BE HELD THAT IT IS A CASE OF FURNISHING OF INACCURATE PA RTICULARS AND PENALTY CANNOT BE LEVIED IN ITS CASE. PARA 9 AND 10 OF HON'BLE SUPREME COURT'S ORDER, READS AS UNDER: - ITA NO. 3922 /14 5 '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, AS A MATTER OF F ACT, THE ASSESSEE HAS GIVEN INACCURATE PARTICULARS. IN WEBSTER'S DICTIONARY, THE WORD 'INACCURATE' HAS BEEN DEFINED AS ; - 'NOT ACCURATE, NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS; AS AN INACCURATE STATEMENT, COPY OR TRANSCRIPT. ' WE HAVE ALREADY SEEN THE MEANING OF THE WORD 'PARTICULARS' IN THE EARLIER PART OF THIS .JUDGMENT. READING THE WORDS IN C O NJUNCTION, THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EX A CT 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 PENALTY 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 THE INACCURATE P ARTICULARS. 10. IT WAS TRIED TO BE SUGGESTED THAT SECTION 14A OF THE ACT SPECIFICALLY EXCLUDED THE DEDUCTIONS IN RESPECT OF THE EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT. IT WAS FURTHER POINTED OUT THAT THE DIVIDENDS FROM THE SHARES DID NOT FORM THE PART OF THE TOTAL INCOME. IT WAS, THEREFORE, REITERATED BEFORE US THAT THE ASSESSING OFFICER HAD CORRECTLY REACHED THE CONCLUSION THAT SINCE THE ASSESSEE HAD CLAIMED EXCESSIVE DEDUCTIO NS KNOWING THAT THEY ARE INCORRECT; IT AMOUNTED TO CONCEALMENT OF INCOME. IT WAS TRIED TO BE ARGUED THAT THE FALSEHOOD IN ACCOUNTS CAN TAKE EITHER OF THE TWO FORMS; (I) AN ITEM OF RECEIPT MAY BE SUPPRESSED FRAUDULENTLY; (II) AN ITEM OF EXPENDITURE MAY BE F ALSELY (OR IN AN EXAGGERATED AMOUNT) CLAIMED, AND BOTH TYPES ATTEMPT TO REDUCE THE TAXABLE INCOME AND, THEREFORE, BOTH TYPES AMOUNT TO CONCEALMENT OF PARTICULARS OF ONE'S INCOME AS WELL AS FURNISHING OF INACCURATE PARTICULARS OF INCOME. WE DO NOT AGREE, AS THE ASSESSEE HAD FURNISHED ALL THE DETAILS OF ITS EXPENDITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, IN THEMSELVES, WERE NOT FOUND TO BE INACCURATE NOR COULD BE VIEWED AS THE CONCEALMENT OF INCOME ON ITS PART. IT WAS UP TO THE AUTHORITIES TO ACCE PT ITS CLAIM IN THE RETURN OR NOT. 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, IN OUR OPINION, ATTRACT THE PENALTY UNDER SECTION 271(1)(C). IF WE ACCE PT THE CONTENTION OF THE REVENUE THEN IN CASE OF EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCEPTED BY ASSESSING OFFICER FOR ANY REASON, THE ASSESSEE WILL INVITE PENALTY UNDER SECTION 271{L){C). THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE. ' 3.1 2 IT IS FURTHER ARGUED THAT SINCE ALL MATERIAL FACTS HAVE BEEN ADEQUATELY ITA NO. 3922 /14 6 DISCLOSED TO THE REVENUE, PENALTY CANNOT BE LEVIED. REFERENCE IS MADE TO THE DECISION OF JURISDICTIONAL MUMBAI TRIBUNAL IN CASES OF ITO V. ROBORANT IN V ESTMENT P LTD 7 SOT 181, DCIT V. USHDEVE' INTERNATION LTD 137 TTJ 337, WAUER SALDHANA V. DCIT 44 SOT 26 AND UNIT DESIGN JEWELLERYP LTD V. DCIT 6 ITR 10 AN D ALSO DELHI HIGH COURT IN CASE OF DEVSONS PVT LTD 196 TAXMAN 21 (DEL) AND OTHERS. IN CASE OF DEVSONS PVT LTD, HON'BLE DELHI HC HAS HELD AS UNDER: '29. WE FIND NO SUBSTANCE IN THE AFORESAID CONTENTION AS IT IS WELL SETTLED THAT THOUGH ASSESSMENT AND PENALTY PROCEEDINGS ARE DISTINCT, AND THE FINDINGS RECORDED IN THE ASSESSMENT PROCEEDINGS MAY CONSTITUTE EVIDENCE IN THE COURSE OF PENAL TY PROCEEDINGS, BUT THEY CANNOT BE REGARDED AS CONCLUSIVE. THIS IS THE LAW ENUNCIATED BY THE SUPREME COURT IN THE FOLLOWING CASES: 1.CIT V. ANWAR AII [1970J 76 ITR 696; 2.CIT V. KHODAY ESWARSA & SONS [1972J 83 ITR 369; AND 3.ANANTHARAM VEERASINGHAIAH & CO. V. CIT [1980J 123 ITR 4571 30. IN THE PRESENT CASE, THE TRIBUNAL IN ASSESSMENT PROCEEDINGS HAS RESTORED BOTH THE ADDITIONS MADE BY THE ASSESSING OFFICER, BUT THE QUESTION ARISES AS TO WHETHER THE SAID FINDINGS OF THE TRIBUNAL IN ASSESSMENT PROCEEDIN GS MUST BE REGARDED AS CONCLUSIVE AND BINDING ON A COORDINATE BENCH OF THE TRIBUNAL IN PENALTY PROCEEDINGS. THE ANSWER TO THE AFORESAID MUST, IN OUR CONSIDERED OPINION, BE IN THE NEGATIVE. THE SUPREME COURT IN THE DECISIONS REFERRED TO IN THE PRECEDING PAR AGRAPHS HAS CATEGORICALLY HELD THAT IT IS INCUMBENT UPON THE TRIBUNAL IN PENALTY PROCEEDINGS TO INDEPENDENTLY EXAMINE THE EVIDENCE AND THE MATERIAL ON RECORD FOR THE PURPOSE OF JUDGING WHETHER THE PENALTY PROCEEDINGS ARE JUSTIFIED ON ACCOUNT OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS THEREOF. THIS, WE FIND IS PRECISELY WHAT HAS BEEN DONE BY THE TRIBUNAL IN THE INSTANT CASE AND WE CANNOT THEREFORE FAULT THE TRIBUNAL FOR DOING SO. EVEN OTHERWISE, WE ARE IN AGREEMENT WITH THE TRIBUNAL THA T THE ASSESSEE IS NOT GUILTY OF CONCEALMENT OF INCOME. WE SAY SO FOR THE FOLLOWING REASONS: (I)THE FIRST PAGE OF THE ASSESSMENT ORDER ITSELF RECORDS THAT DETAILS OF THE TOTAL BILLS RAISED AGAINST THE JMC WERE FURNISHED BY THE ASSESSEE, ACCORDING TO WHICH , THE TOTAL RECEIPTS OF THE A SSESSEE COMPANY FOR THE ASSESSMENT YEAR IN QUESTION, I.E., E FINANCIAL YEAR 1 994 - 95 WAS RS. 1,17,39,415. AFTER DISCLOSING THE TOTAL RECEIPTS A PARTICULAR LEGAL STAND WAS TAKEN BY THE ASSESSEE. THE CONTENTION OF THE ASSESSEE WAS TH A T; WHATEVER HAD BEEN DEDUCTED BY THE JMC AS NOT PAYABLE TO THE ASSESSEE WAS NOT AND COULD NOT BE TAKEN AS INCOME ACCRUING TO THE ASSESSEE. THIS STAND WAS NOT ACCEPTED BY THE ASSESSING OFFICER AND, IN OUR OPINION, INCORRECTLY SO. ASSUMING' HOWEVER . THA T THE. ASSESSING OFFICER. WAS JUSTIFIED IN NOT ACCEPTING THE AFORESAID LEGAL STAND TAKEN UP BY THE ASSESSEE, WHEN ALL THE FACTS WERE PLACED BEFORE THE ASSESSING OFFICER BY THE ASSESSEE ITA NO. 3922 /14 7 ITSELF, BY NO STRETCH OF IMAGINATION IT CAN BE SAID THAT THE ASSESSEE H AD CONCEALED THE SAME. (II)AS REGARDS THE ADDITION IN RESPECT OF THE BALANCE OUTSTANDING TO THE UNDRY CREDITORS FOR HIRE CHARGES, THE ADDITION, AS HELD BY THE TRIBUNAL, APPEARS TO HAVE BEEN MADE ONLY BECAUSE THE ASSESSEE WAS UNABLE TO PROVE THE BALANCES IN THE MANNER CALLED UPON BY THE DEPARTMENT, POSSIBLY DUE TO PAUCITY OF TIME, BUT THERE WAS AMPLE MATERIAL EMBEDDED IN THE RECORD ITSELF WHICH WAS ACCEPTED BY THE DEPARTMENT IN SUBSEQUENT ASSESSMENT PROCEEDINGS, TO THE EFFECT THAT THE OUTSTANDINGS WERE GEN UINE. (III)DIVERGENT VIEWS AMONGST DEPARTMENTAL AUTHORITIES IN RESPECT OF BOTH THE ADDITIONS POSITIVELY INDICATE THAT IT WOULD BE UNSAFE TO INFER THAT THE ASSESSEE WAS GUILTY OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS THEREOF. IT IS TRITE LAW THAT WHERE DIVERGENT VIEWS EXIST EITHER WITHIN THE DEPARTMENT ITSELF OR SUCH DIVERGENT VIEWS ARE EXPRESSED BY DIFFERENT HIGH COURTS AND THERE IS NO UNIFORMITY OR CONSENSUS OF OPINION OF ANY ASPECT OF LAW, THE ASSESSEE CANNOT BE FAULTED FOR TAKIN G A PARTICULAR STAND. THE CAVEAT, OF COURSE, IS THAT THE ASSESSEE MUST HAVE PLACED ALL HIS CARDS ON THE TABLE BY DISCLOSING EACH AND EVERY FACT TO THE DEPARTMENTAL AUTHORITIES OR THE COURT CONCERNED. IF THE ASSESSEE DOES SO THEN MERELY BECAUSE THE DEPARTME NTAL AUTHORITIES CONCERNED OR THE HIGH COURT CONCERNED DOES NOT CONCUR WITH THE LEGAL STAND ADOPTED BY THE ASSESSEE WILL NOT BE REASON ENOUGH TO HOLD THAT THE ASSESSEE IS GUILTY OF CONCEALMENT OF INCOME OR OF FURNISHING INACCURATE DETAILS. THUS, THE QUESTI ON WHETHER THE ASSESSEE HAS INVITED UPON HIMSELF THE PENALTY SOUGHT TO BE IMPOSED ON HIM BY THE AUTHORITY CONCERNED IS REALLY A QUESTION OF FACT AND HAS TO BE DECIDED KEEPING IN MIND THE ENTIRE GAMUT OF EVENTS AND CIRCUMSTANCES. 31. IN THE INSTANT CASE, IT CANNOT BE SAID THAT THE ASSESSEE WITHHELD ANY RELEVANT INFORMATION REGARDING HIS INCOME AND RECEIPTS FROM THE ASSESSING OFFICER. IT BEARS REPETITION THAT THE FIGURE ARRIVED AT BY THE ASSESSING OFFICER PERTAINING TO THE INCOME OF THE ASSESSEE WAS A FIGUR E DISCLOSED BY THE ASSESSEE HIMSELF . SIMILARLY, WITH REGARD TO THE ADDITION MADE IN RESPECT OF THE S U NDRY CREDITORS, THE VERY SAME CREDITORS WERE SUBSEQUENTLY FOUND BY THE DEPARTMENT ITSELF TO BE GENUINE CREDITORS OF THE ASSESSEE. IT IS ALSO ON RECORD THAT THE SAID CREDITORS WERE PAID THEIR ENTIRE OUTSTANDING AMOUNTS BY THE ASSESSEE AND THIS FACT HAS BEEN VERIFIED BY THE DEPARTMENT F ROM THE CREDITORS THEMSELVES. IT ALSO STANDS ESTABLISHED ON RECORD THAT THE ASSESSEE'S CLAIM AGAINST THE JMC FOR DEDUCTIONS M ADE, BY THE JMC FROM THE BILLS OF THE ASS E SSEE WAS DISMISSED BY THE HIGH COURT OF RAJASTHAN AND HENCE THE STAND ADOPTED B Y THE ASSESSEE THAT NO REEL INCOME HAD ACCRUED TO HIM WAS ALSO PROVED TO BE TRUE. 32. WITH REGARD TO THE PROVISIONS OF SECTION 271(1) (C) OF THE ACT PERTAINING TO PENALTY, THE SUPREME COURT HAS AUTHORITATIVELY LAID DOWN THAT MAKING OF A CLAIM BY THE A SSESSEE WHICH IS NOT ITA NO. 3922 /14 8 SUSTAINABLE WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. THUS, IN CIT V. RELIANCE PETROPRODUCTS (P.) LTD. [20 10J 322 ITR 158 1 (SC) THE COURT HELD AS FOLLOWS: 'A GLANCE AT THIS PROVISION WOULD SUGGEST THAT IN ORDER TO BE COVERED, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE P ARTICULARS OF HIS INCOME. THE PRESENT IS NOT A CASE OF CONCEALMENT OF THE INCOME. THAT IS NOT THE CASE OF THE REVENUE EITHER. HOWEVER, THE LEARNED COUNSEL FOR THE REVENUE SUGGESTED THAT BY MAKING INCORRECT CLAIM FOR THE EXPENDITURE ON INTEREST, THE ASSESSE E HAS FURNISHED INACCURATE PARTICULARS OF THE INCOME. AS PER' LAW LEXICON, THE MEANING OF THE WORD 'PARTICULAR' IS A DETAIL OR DETAILS (IN PLURAL SENSE); THE DETAILS OF A CLAIM, OR THE SEPARATE ITEMS OF AN ACCOUNT. THEREFORE, THE WORD 'PARTICULARS' USED IN THE SECTION 271(1)(C) WOULD EMBRACE THE MEANING OF THE DETAILS OF THE CLAIM MADE. IT IS AN ADMITTED POSITION IN THE PRESENT CASE THAT NO INFOR MATION GIVEN IN THE RETURN WAS F OUND TO BE INCORRECT OR INACCURATE. IT IS NOT AS IF ANY STATEMENT MADE OR ANY DET AIL SUPPLIED WAS FOUND TO BE FACTUALLY INCORRECT. HENCE, AT LEAST, PRIMA FACIE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. THE LEARNED COUNSEL ARGUED THAT 'SUBMITTING AN INCORRECT CLAIM IN LAW FOR THE EXPENDITURE ON INTEREST W OULD AMOUNT TO GIVING INACCURATE PARTICULARS OF SUCH INCOME.' WE DO NOT THINK THAT SUCH CAN BE THE INTERPRETATION OF THE CONCERNED WORDS. THE WORDS ARE PLAIN AND SIMPLE. IN ORDER TO EXPOSE THE ASSESSEE TO THE PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY ANY STRETCH OF IMAGINATION, MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. IN CIT V. ATUL MOHAN BINDAL [2009J 9 SCC 589, WHERE THIS COURT WAS CONSIDERING T HE SAME PROVISION, THE COURT OBSERVED THAT THE ASSESSING OFFICER HAS TO BE SATISFIED THAT A PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THIS COURT REFERRED TO ANOTHER DECISION OF THIS COURT IN UNIO N OF INDIA V. DHARAMENDRA TEXTILE PROCESSORS [2008] 13 SCC 369 AS ALSO, THE DECISION IN UNION OF INDIA V. RAJASTHAN SPG .. & WVG. MILLS [2009] 13 SCC 448 AND REITERATED IN PARAGRAPH 13 THAT (PAGE 13 OF 317 ITR) : '13. IT GOES WITHOUT SAYING THAT FOR APPL ICABILITY OF SECTION 271(1)(C), CONDITIONS STATED THEREIN MUST EXIST.' 33. IN THE CASE OF CIT V. BACARDI MARTINI INDIA LTD. [2007J 288 ITR 585 1, A DIVISION BENCH OF THIS COURT HELD THAT MERELY BECAUSE THERE WAS A DIFFERENCE OF OPINION BETWEEN THE ASSESS EE AND THE ASSESSING OFFICER, IT CANNOT BE SAID THAT THE ASSESSEE HAD INTENTION TO CONCEAL HIS INCOME. THE RELEVANT PORTION OF THE JUDGMENT IS AS UNDER: '13. WE HAVE HEARD THE COUNSEL FOR THE PARTIES AND PERUSED THE RECORD. IT HAS BEEN OBSERVED BY THE SU PREME COURT IN K. C. BUILDERS V. ASSTT. COMMISSIONER OF INCOME - TAX [2004J 265 ITR 562 , ITA NO. 3922 /14 9 THAT CONCEALMENT INHERENTLY CARRIES WITH IT THE ELEMENT OF MENS REA. IT IS IMPLIED IN THE WORD 'CONCEALMENT' THAT THERE HAS BEEN A DELIBERATE ACT ON THE PART OF THE ASS ESSEE. THE MEANING OF WORD 'CONCEALMENT' AS FOUND IN SHORTER OXFORD DICTIONARY III EDITION, VOL - I IS IN LAW THE INTENTIONAL SUPPRESSION OF TRUTH OR FACT KNOWN, TO THE INJURY OR PREJUDICE OF ANOTHER'. SUPREME COURT FURTHER OBSERVED THAT MERE OMISSION FROM THE RETURN OF AN ITEM OF RECEIPT DOES NEITHER AMOUNT TO CONCEALMENT NOR DELIBERATE FURNISHING OF INACCURATE PARTICULARS OF INCOME, UNLESS AND UNTIL THERE IS SOME EVIDENCE TO SHOW OR SOME CIRCUMSTANCES FOUND FROM WHICH IT CAN BE GATHERED THAT THE OMISSION WAS ATTRIBUTABLE TO AN INTENTION OR DESIRE ON THE PART OF THE ASSESS TO HIDE OR CONCEAL THE INCOME SO AS TO AVOID IMPOSITION OF TAX THEREON. IN ORDER THAT A PENALTY UNDER SECTION 271(1)(III) MAY BE IMPOSED, IT HAS TO BE PROVED THAT ASSESSEE HAS CONSCIOUSLY MADE THE CONCEALMENT OR FURNISHED INACCURATE PARTICULARS OF HIS INCOME. 14. IT IS CLEAR FROM THE LAW LAID DOWN BY THE SUPREME COURT THAT CONCEALMENT MUST BE ACCOMPANIED WITH THE INTENTION OF THE ASSESSEE TO EVADE HIS TAX LIABILITY. THE ASSESSEE IN THIS CASE HAD UNIFORMLY CLAIMED EXPENDITURE AGAINST FOUR HEADS IN THREE ASSESSMENT YEARS. WHEN THE APPEAL AGAINST THE ORDER OF ASSESSING OFFICER BEFORE CIT(A) IN RESPECT OF ASSESSMENT ORDER 1998 - 99 FAILED THE ASSESSEE INSTEAD OF PREFERRING APPEAL CONSIDERED IT PROPER NOT TO LITIGATE FURTHER AS IT WAS RUNNING INTO HEAVY LOSSES AND EVEN IF THE APPEAL HAD BEEN ALLOWED, THE ASSESSEE WOULD NOT HAVE PAID ANY TAX. THE ASSESSEE IN ANY CASE WOULD HA VE REMAINED IN HEAVY LOSSES. TH E ASSESSEE THEREFORE THOUGHT IT PROPER PRO PER NOT TO PREFER AN APPEAL AND AFTER RECEIPT OF ORDER, ASSESSEE MADE AN APPLICATION ON 4 - 2 - 2003 TO 'CORRECT THE INCOME RETURNS OF SUBSEQUENT YEARS IN ACCORDANCE WITH ORDER OF C!T FOR THE YEAR 1998 - 99. THE ASSESSEE, THEREFORE, FILED REVISED RETURNS DELETIN G THE EXPENSES WHICH WERE DISALLOWED BY THE CIT(A}. IN THE' RELEVANT YEAR ASSESSEE HAD ALSO CLAIMED EXPENSES OF RS. 2 CRORES PAID BY THE ASSESSEE IN TERMS OF THE AGREEMENT ENTERED INTO BY THE ASSESSEE WITH THE LEASING LESSER. THE ASSESSEE CLAIMED THE ENTIR E AMOUNT OF RS. 2 CRORES AS DEDUCTION SINCE THE ASSESSEE HAD PAID THIS AMOUNT OF RS. 2 CRORES TO THE LESSER. THERE IS NO DISPUTE THAT THE ASSESSEE HAD DISCLOSED ALL PARTICULARS. IT WAS ONLY DIFFERENCE OF OPINION BETWEEN THE ASSESSEE AND THE ASSESSING OFFIC ER AND THE ASSESSEE ACCEPTED THE OPINION OF THE ASSESSING OFFICER INSTEAD OF PREFERRING AN APPEAL. 15. IT IS NOT A CASE WHERE ASSESSEE HAD NOT BEEN ABLE TO EXPLAIN ANY EXPENDITURE OR HAD FAILED TO GIVE ANY DETAILS AND THE ASSESSING OFFICER HAD ADDED THE SAME INTO THE INCOME. IN DURGA TIMBER V. CIT 197 ITR 63, RELIED UPON BY THE APPELLANT, DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE INCOME - TAX OFFICER HAD NOTICED CASH CREDITS AND INVESTMENTS SHOWN IN THE BOOKS OF ACCOUNT AND ASKED THE ASSESSEE TO G IVE EXPLANATION. THE ASSESSEE COULD NOT GIVE EXPLANATION OF EN TIRES NOR COULD EXPLAIN THE SOURCE OF INCOME AND ADMITTED THAT THE TWO AMOUNTS BE TREATED AS HIS CONCEALMENT. ITA NO. 3922 /14 10 UNDER THESE CIRCUMSTANCES COURT OBSERVED THAT THERE WAS CONCEALMENT OF INCOME AND P ENALTY WAS JUSTIFIED. IN THE PRESENT CASE ASSESSEE HAD EXPLAINED ALL THE EXPENDITURE AND HAD ACTUALLY INCURRED THE EXPENDITURE BUT THE EXPENDITURES WERE DISALLOWED BECAUSE OF DIFFERENCE OF OPINION BETWEEN THE ASSESSEE AND THE ASSESSING OFFICER. THIS IS NOT A CASE WHERE REVISED RETURN WAS FILED AS A RESULT OF DISCOVERY OF SOME FACTS BY THE ASSESSING OFFICER OR INABILITY OF THE ASSESSEE TO EXPLAIN THE EXPENDITURE. THE REVISED RETURN WAS FILED BECAUSE SOME OF THE EXPENDITURE WERE DISALLOWED BY THE CIT(A) APPEA L FOR YEAR 1998 - 99 ALTHOUGH THE EXPENDITURE WERE NOT DOUBTED. THERE ARE CASES WHERE AN EXPENDITURE IS DISALLOWED BY THE ASSESSING OFFICER AND IT IS ALLOWED BY THE CIT(A). IT IS AGAIN DISALLOWED BY THE !TAT AND IN APPEAL ALLOWED BY THE HIGH COURT AND MAY BE DISALLOWED BY THE SUPREME COURT. MERELY BECAUSE THERE IS DIFFERENCE OF OPINION FOR ALLOWING OR DISALLOWING THE EXPENDITURE BETWEEN THE ASSESSEE AND ASSESSING OFFICER, IT CANNOT BE SAID THAT ASSESSEE HAD INTENTION TO CONCEAL THE INCOME. THE FILING OF THE R EVISED RETURN EXCLUDING SOME OF THE DISALLOWED EXPENDITURE CLA IMING EXPENDITURE OF RS. 2 CRORES WHICH WAS ACTUALLY SPENT BY THE ASSESSEE IN THE RELEVANT ASSESSMENT YEAR AS DEDUCTION, DOES NOT AMOUNT TO CONCEALMENT OR FURNISHING INACCURATE PARTICULARS. THE ASSESSEE HAD GIVEN ALL PARTICULARS OF EXPENDITURE AND INCOME AND HAD DISCLOSED ALL FACTS TO THE ASSESSING OFFICER. IT IS NOT THE CASE OF THE ASSESSING OFFICER OR THE APPELLANT TH A T IN REPLY TO THE QUESTIONNAIRE OF THE ASSESSING OFFICER, SOME NEW FACTS WERE 'DISCOVERED OR ASSESSING OFFICER HAD DUG OUT SOME INFORMATION WHICH WAS NOT FURNISHED BY THE ASSESSEE. ' 34. FURTHER IN THE CASE OF CIT V. NATH BROS. EXIM INTERNATIONAL LTD. [2007] 288 ITR 670 (DELHI) IT WAS REITERATED THAT: '5. WHAT IS REQUIRED TO BE CONSIDERED IS WHETHER THERE WAS ANY ENQUIRY THAT WAS REQUIRED TO BE MADE BY THE ASSESSING OFFICER BEFORE CONCLUDING THAT THE ASSESSEE HAD FURNISHED INACCURATE OR FALSE PARTICULARS. IN THIS CASE, WE ARE OF THE VIEW THAT NO SUCH ENQUIRY WAS REQUIRED TO BE M ADE BUT THERE WAS ONLY THE NEED FOR APPLICATION OF THE LAW. ON THE LEGAL POSITION, THE ASSESSING OFFICER WAS NOT SATISFIED AND DID NOT AGREE WITH THE ASSESSEE BUT THAT BY ITSELF IS NOT A GROUND TO INVOKE THE PENALTY PROVISION OF THE STATUTE. 6. LEARNED C OUNSEL FOR THE REVENUE RELIED UPON CRR V. VIDYAGAURI NATVERLAL [1999] 238 ITR 91 (GUJ.). IN THAT CASE THE QUESTION THAT AROSE WAS OF UNEXPLAINED CASH CREDIT. THE GUJARAT HIGH COURT MADE A DISTINCTION BETWEEN A WRONG CLAIM AS OPPOSED TO A FALSE CLAIM. IN TH AT CASE, THE ASSESSING OFFICER NEEDED TO MAKE AN ENQUIRY AS TO WHETHER THE CLAIM OF THE ASSESSEE WAS RIGHT OR NOT. INSOFAR AS THE PRESENT CASE IS CONCERNED, THE DECISION CITED BY LEARNED COUNSEL FOR THE REVENUE IS CLEARLY DISTINGUISHABLE. 7. WE FIND THAT THERE WAS FULL DISCLOSURE OF ALL RELEVANT MATERIAL. IT CANNOT BE SAID THAT THE CONDUCT OF THE (ASSESSED) ATTRACTED THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT.' ITA NO. 3922 /14 11 35. IN VIEW OF THE AFORESAID WE HAVE NO HESITATION IN CONCLUDING THAT THE INCOME - TAX APPE LLATE TRIBUNAL WAS NOT RIGHT IN LAW IN HOLDING THAT THERE WAS CHANGE IN THE METHOD OF ACCOUNTING INTRODUCED BY THE ASSESSEE WITHOUT ANY JUSTIFIABLE REASON. THE FURTHER FINDINGS RECORDED BY THE ITAT THAT THERE WAS NO EVIDENCE REGARDING THE PAYMENT OF RS. 36 ,17,980 BY THE ASSESSEE TO THE SUB - CONTRACTORS IN CONNECTION WITH THE EXECUTION OF THE GARBAGE WORK IS ALSO PERVERSE. QUESTION NOS. 1 AND 2 IN ITA NO. 367/2004 ARE ACCORDINGLY DECIDED IN FAVOUR OF THE ASSESSEE. 36. IN SO FAR AS THE PENALTY PROCEEDINGS ARE ALSO CONCERNED, WE FIND THAT THE ITAT WAS CORRECT IN LAW IN UPHOLDING THE DELETION OF THE PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT AND WE ACCORDINGLY ANSWER THE QUESTION OF LAW FRAMED IN ITA NO. 296/2006 IN THE AFFIRM ATIVE, I.E., IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. ' 3.13 IT SETTLED LAW THAT MERE CONFIRMATION OF AN ADDITION ON DIFFERENCE OF OPINION REGARDING TAXABILITY OF ASSESSABLE INCOME DO NOT JUSTIFY LEVY OF PENALTY. RELIANCE IN THIS REGARD IS PLAC ED ON RELIANCE PETROPRODUCTS PVT LTD 32 2 ITR 158 (SC) AND RAJASTHAN SPINNING AND WEAVING MILLS 23 OTR 158 (SC), LOBI V. OCIT 42 SOT 325, EQUEST INDIA P LTD 136 TTJ 574, STRIDES ARCOLAB LTD 40 SOT 398, ZYCUS INFOTECH P LTD 17 SOT 310. 3.14 IT IS ALSO A SE TTLED LAW THAT WHEN NO PENALTY HAS BEEN LEVIED ON SIMILAR FACTS AND SIMILAR ADDITIONS MADE IN EARLIER YEARS, NO PENALTY CAN BE LEVIED IN SUBSEQUENT YEARS. RELIANCE IN THIS REGARD IS PLACED ON SOOD HARVESTER 304 ITR 279 (P&H) AND NAVJEEVAN OIL MILLS 252 ITR 417 (GUJ). IN CASE OF SOOD HARVESTER, THE PUNJAB & HARYANA HE HAS RELIED UPON THE JUDGMENT OF SC IN CASE OF BERGER PAINTS LTD 266 ITR 99 (SC) AND RADHASAOMI SATSANG 193 ITR 321 AND HAS HELD AS UNDER: '2. IT IS UNDISPUTED THAT FOR THE PREVIOUS YEAR RELEV ANT TO THE ASSESSMENT YEAR 1982 - 83, ON SIMILAR SET OF FACTS IN THE CASE OF THE ASSESSEE ITSELF, THE ASSESSING OFFICER DID NOT CONSIDER IT APPROPRIATE TO INITIATE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. ON FACTS, IT HAS ALSO BEEN ADMITTED PO SITION THAT THE SALE OF TWO COMBINES BY THE ASSESSEE - FIRM TO THE PARTNERS HAS NOT BEEN ACCEPTED AND THE ASSESSMENT WAS FRAMED FOR THE ASSESSMENT YEAR 1981 - 82 BY TREATING THE COMBINES IN THE HANDS OF THE ASSESSEE - FIRM. IT HAS COME ON RECORD THAT THE ASSESSI NG OFFICER WAS AWARE OF THE OWNERSHIP OF COMBINES BY THE FIRM AND STILL NO PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF. THE ACT WERE INITIATED. IT IS UNDER THESE CIRCUMSTANCES THAT THE TRIBUNAL HAS CONSIDERED THE QUESTION AS TO WHETHER THE ASSESSEE HAD CONCEALED ANY INCOME BY DISCLOSING THE INCOME IN THE HANDS OF THE INDIVIDUAL PARTNER INSTEAD OF IN THE HANDS OF THE ASSESSEE - FIRM. IT HAS BEEN FOUND AS A FACT THAT COMPLETE FACTS WERE MADE AVAILABLE TO THE ASSESSING OFFICER ITA NO. 3922 /14 12 ALONG WITH THE RETURN AS WELL AS DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND, THEREFORE, IT HAS BEEN HELD THAT IT IS A CASE OF DIFFERENCE OF OPINION AND NOT CONCEALMENT OF INCOME, IN ADDITION, IT HAS ALSO BEEN HELD THAT FOR THE ASSESSMENT YEAR 1982 - 83 NO PENALTY PROCEEDINGS UNDER SEC TION 271(1)(C) OF THE ACT WERE INITIATED AND ONCE THE DEPARTMENT HAS ACCEPTED THE ORDER IN THE PREVIOUS YEAR THEN IT HAS TO ACT IN THE SAME FASHION EVEN FOR THE SUBSEQUENT YEARS. IN THAT REGARD, RELIANCE HAS BEEN PLACED ON THE JUDGMENT OF HON'BLE SUPREME C OURT IN THE CASES OF BERGER PAINTS INDIA LTD. V. CIT [2004 J 266 ITR 99 1 AND RADHASOAMI SATSANG V. CIT [1992J 193 ITR 3212 . THE TRIBUNAL HAS ALSO RELIED UPON OTHER JUDGMENTS OF VARIOUS HIGH COURTS AND CONCLUDED AS UNDER: - 'ON THE BASIS OF ABOVE REFERRE D DECISIONS, IT BECOMES ABUNDANTLY CLEAR THAT THERE MUST BE A VALID AND JUST CAUSE FOR THE REVENUE FOR TAKING DIFFERENT VIEW IN THE SUBSEQUENT YEAR. IN THE PRESENT CASE, ON SIMILAR FACTS, PENALTY PROCEEDINGS FOR CONCEALMENT OF INCOME HAD NOT BEEN INITIATED FOR ASSESSMENT YEAR 1982 - 83. THERE IS NO REASON FOR THE REVENUE TO TAKE A DIFFERENT VIEW FOR ASSESSMENT YEAR 1983 - 84 ON SAME SET OF FACTS AND WITHOUT ASSIGNING ANY REASONS. WE ARE, THEREFORE, OF THE CONSIDERED VIEW THAT PENALTY UNDER SECTION 271(1)(C) IN THIS CASE IS NOT JUSTIFIED. THE SAME IS ACCORDINGLY CANCELLED. ' 3. MR. YOGESH PUTNEY, LEARNED COUNSEL FOR THE REVENUE HAS SUBMITTED THAT THE PRINCIPLES OF RES JUDICATA WOULD NOT BE ATTRACTED TO THE PENALTY PROCEEDINGS INITIATED UNDER SECTION 271 (1)(C). IN THAT REGARD, HE HAS PLACED RELIANCE ON THE OBSERVATION MADE BY THE HON'BLE SUPREME COURT IN RADHASOAMI SATSANG'S CASE (SUPRA) AND SUBMITTED THAT EACH ASSESSMENT YEAR HAS TO BE REGARDED AS A UNIT AND THE DECISION TAKEN IN ONE YEAR MAY NOT BE APPLICABLE TO THE FACTS AND CIRCUMSTANCES OBTAINING IN THE FOLLOWING YEAR. HOWEVER, TO THE QUERY RAISED BY US, LEARNED COUNSEL HAS NOT BEEN ABLE TO POINT OUT THAT THERE WAS ANY MATERIAL DIFFERENCE BETWEEN THE FACTS OBTAINING IN THE ASSESSMENT YEAR 1982 - 83 AND THE ASS ESSMENT YEAR UNDER CONSIDERATION, I.E., 1983 - 84. HE HAS ALSO NOT BEEN ABLE TO POINT OUT ANY SIGNIFICANT FLAW IN THE FINDINGS RECORDED BY THE TRIBUNAL HOLDING THAT NO INCOME WAS CONCEALED NOR ANY INCORRECT PARTICULARS OF THE INCOME WERE FURNISHED. 4. AFTE R HEARING LEARNED COUNSEL, WE ARE OF THE CONSIDERED VIEW THAT THE TRIBUNAL HAS RECORDED CATEGORICAL FINDINGS OF FACT THAT THE ASSESSEE HAS DISCLOSED COMPLETE FACTS BEFORE THE ASSESSING OFFICER ALONG WITH THE RETURN AS WELL AS DURING THE COURSE OF ASSESSMEN T PROCEEDING. WE ARE FURTHER OF THE VIEW THAT THE TRIBUNAL HAS FOLLOWED THE CORRECT APPROACH BY CONCLUDING THAT IT IS A CASE OF DIFFERENCE OF OPINION AND NOT CONCEALMENT OF INCOME. WE ALSO APPROVE THE REASONING ADOPTED BY THE TRIBUNAL THAT IN THE PREVIOUS ASSESSMENT YEAR OF 1982 - 83, THE FACTS WERE ALMOST THE SAME AND STILL NO PENALTY PROCEEDING UNDER SECTION 271(1)(C) WERE INITIATED. IN SUCH A SITUATION, WE FIND THAT VIEW OF THE HON'BLE SUPREME COURT IN BERGER PAINTS INDIA LTD.'S CASE (SUPRA) AND RADHASOAMI SATSANG'S ITA NO. 3922 /14 13 CASE (SUPRA) WOULD APPLY. THE REVENUE HAS TO MAINTAIN CONSISTENCY AND FOR THE PURPOSE OF FINALITY IN ALL LITIGATION, EARLIER DECISION ON THE SAME QUESTION WOULD NOT BE REOPENED UNLESS SOME NE W FACTS ARE FOUND WITH MATERIAL DIFFERENCE IN THE SUBS EQUENT YEARS. ' 3.1 5 IT IS ALSO SUBMITTED THAT MERE REJECTION OF A LEGAL CLAIM REGARDING TAXABILITY OF A RECEIPT AS INCOME IS RIOT SUFFICIENT TO LEVY PENALTY U / S 271(1)(C). IN THIS R EGARD, RELIANCE IS. PLACED ON VARIOUS. JUDGMENTS INCLUDING ROBORANT INVE STMENT 7. SOT 181 (MUM), CAPLLN POINT LABORATOR I ES LTD 212 CTR 58, REGENCY EXPRESS BUILDERS P LTD 166 TAXMAN 269 AND BHARTESH JAIN 137 TTJ 200 (DEL). 3.16 IT IS A JUDICIALLY WELL - ESTABLISHED PRINCIPLE THAT NO PENALTY UNDER SECTION 271(1)(C) IS LEVIABLE W HERE AN ADDITION IS MADE ON ACCOUNT OF AN ISSUE ON WHICH TWO VIEWS ARE POSSIBLE BONAFIDE AND WHEN ALL THE FACTS ARE FULLY DISCLOSED TO THE REVENUE OR THAT NO CLAIM OR EXPLANATION IS FOUND TO BE FALSE ON VERIFICATION. FURTHER, NO PENALTY HAS BEEN EVEN INITI ATED ON THIS ISSUE IN THE EARLIER YEAR EVEN THOUGH THE ADDITION HAS BEEN UPHELD BY THE CIT(A). 3.17 CONSIDERING THE FACTS OF THE CASE, THE ORDER OF THE AO, THE APPELLATE ORDERS IN QUANTUM MATTER, THE SUBMISSIONS OF THE LEARNED AR, INCLUDING THE JUDGMENT OF THE HON'BLE SUPREME COURT IN CASE OF RELIANCE PETROPRODUCTS (SUPRA), THE DELHI HIGH COURT IN CASE OF DEVSONS, PUNJAB & HARYANA HIGH COURT IN CASE OF SO OD HARVESTERS AND VARIOUS OTHER JUDGMENTS REFERRED, IT IS HEREBY HELD THAT ON FACTS PENALTY UNDER SECT ION 271(1)(C) IS NOT LEVIABLE IN THIS CASE. HENCE, THE PENALTY ORDER PASSE D BY THE AO IS HEREBY CANCELLED. 4. AGAINST THE ABOVE ORDER OF CIT(A) , THE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE CONSIDERED RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND ALSO DELIBERATED ON THE JUDICIAL PRONOUNCEMENTS REFERRED BY LOWER AUTHORITIES IN THEIR RESPECTIVE ORDERS AS WELL AS CITED BY LD. AR AND DR DURING THE COURSE OF HEARING BEFORE US IN THE CONTEXT OF FACTUAL MATRIX OF THE CASE. FR OM THE RECORD WE FOUND THAT THE DEDUCTION U/S. 80IB(10) WAS CLAIMED BY THE ASSESSEE ON PROPORTIONATE BASIS. A NOTE HAS ALSO BEEN APPENDED TO THE STATEMENT OF TOTAL INCOME TO THIS EFFECT WHICH HAS DULY BEEN NOTED BY THE AO AT PARA 4 OF HIS ASSESSMENT ORDER. THUS, THE ASSESSEE HAS MADE FULL DISCLOSURE OF THE FACTS AND CLAIMED DEDUCTION U/S.80IB(10) IN RESPECT OF ROYAL HOUSING ITA NO. 3922 /14 14 PROJECT. WHILE DECLINING THE CLAIM OF THE ASSESSEE, THE AO ALSO LEVIED PENALTY U/S.271(1)(C) OF THE ACT. BY THE IMPUGNED ORDER THE CIT(A ) AFTER APPRECIATING ENTIRE FACTS OF THE CASE AND AFTER APPLYING JUDICIAL PRONOUNCEMENTS LAID DOWN BY THE HON BLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS LTD. 322 ITR 158, HELD THAT DECLINE OF LEGAL CLAIM CANNOT BE MADE A GROUND FOR LEVY OF PEN ALTY U/S.271(1)(C) OF THE ACT. A DETAILED FINDING HAS BEEN RECORDED BY THE CIT(A) TO THE EFFECT ASSESSEE HAS NOT WITHHELD ANY RELEVANT INFORMATION REGARDING HIS INCOME AND CLAIM OF DEDUCTION. EVEN THE FIGURE ARRIVED BY THE AO PERTAINING TO THE INCOME OF T HE ASSESSEE WAS A FIGURE DISCLOSED BY THE ASSESSEE HIMSELF. THE CIT(A) HAS APPLIED THE PRINCIPLE OF LAW LAID DOWN BY THE VARIOUS JUDICIAL PRONOUNCEMENTS TO THE FACTS OF THE INSTANT CASE AND FINALLY REACHED TO THE CONCLUSION THAT PENALTY WAS NOT IMPOSABLE I N RESPECT OF THE LEGAL CLAIM FILED BY THE ASSESSEE WHICH WAS DECLINED BY THE AO. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) WHICH IS WELL REASONED ORDER. EVEN WE FOUND THAT SIMILAR DISALLOWANCE SO MADE BY THE AO IN RESPECT OF DEDUCTION U/S.80IB(10 ) IN A.Y.2007 - 08 WAS ALLOWED BY THE TRIBUNAL , AND FOR WHICH THE AO HAS ALSO GIVEN EFFECT VIDE ITS ORDER DATED 2 - 6 - 2015 AS PLACED ON RECORD. 6 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 03/02 / 20 1 6 . SD/ - SD/ - ( AMARJIT SINGH ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 03/02 /201 6 . . /PKM , . / PS ITA NO. 3922 /14 15 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//