M/s Moti Lal Harivallabh Mishra, Tikamgarh V. I.T.O., Chhatarpur

ITA 42/AGR/2014

• Counselvise Citation: 4220314 RSA 2014
• Duration Of Justice: 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-04-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 07-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANURADHA
• Assessee Lawyers: RAJENDRA SHARMA
• Keywords: Business income; Depreciation; Earning of tax free income; Question of law; Wrong claim
• Section: 54; 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER ITA NO. 42/AGRA/2014 ASSTT. YEAR : 2004-05 M/S. MOTI LAL HARIVALLABH MISHRA, VS. INCOME-TAX O FFICER, MAMON DARWAJA, TIKAMGARH(MP). CHHATARPUR. (PAN: AALFM 3071 E) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJENDRA SHARMA, ADVOCATE RESPONDENT BY : SMT. ANURADHA, JR. D.R. DATE OF HEARING : 28.04.2014 DATE OF PRONOUNCEMENT OF ORDER : 29.04.2014 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A), GWALIOR DATED 19.12.2013 FOR THE ASSESSMENT YEAR 20 04-05, CHALLENGING THE LEVY OF PENALTY U/S. 271(1)(C) OF THE IT ACT. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE AO L EVIED PENALTY OF RS.17,000/- IN RESPECT OF EXCESS DEPRECIATION OF RS.47,720/- CLAIM ED BY THE ASSESSEE ON THE BUS OF WDV OF RS.2,30,000/- ALREADY SOLD BY THE ASSESSEE. THE ASSESSEE SUBMITTED BEFORE THE LD. CIT(A) THAT THE BOOKS HAVE BEEN PREPARED BY THE ACCOUNTANT, WHO DID NOT UNDERSTAND THAT DEPRECIATION SHOULD NOT BE CLAIMED ON THE ASSET WHICH WAS SOLD ITA NO. 42/AGRA/2014 2 DURING THE ACCOUNTING YEAR. DUE TO THE ABOVE MISTAK E, EXCESS DEPRECIATION WAS CLAIMED AND THERE WAS NO MALA FIDE INTENTION TO CLA IM EXCESS DEPRECIATION OR TO CONCEAL THE INCOME OR PARTICULARS OF INCOME. THE LD . CIT(A), HOWEVER, CONFIRMED THE PENALTY AND DISMISSED THE APPEAL OF THE ASSESSE E. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD. THE AO NOTED IN THE ASSESSMENT ORDER THAT THE ASSESSEE SOLD ONE OF THE BUSES IN THE MONTH OF FEBRUARY, ON WHICH EXCESS DEPRECIATION HAS BEEN CLAIMED. THE AO NOTED WDV OF BUSES AS ON 01.04.2003 AND ADDITIONS MADE TO THE BUSES AND AFTER REDUCING THE VALUE OF THE BUS SOLD IN THE MONTH OF FEBRUARY, THE DEPRECIATION WAS CALCULATED AND EXCESS DEPRECIATION OF RS.47,720/- W AS FOUND ON WHICH THE PENALTY WAS LEVIED. IT WOULD INDICATE THAT THE ASSESSEE OWN ED MORE THAN ONE BUS IN THE FINANCIAL YEAR AND ALSO MADE ADDITION TO THE SAME. THUS, THERE MAY BE A BONA FIDE ERROR ON THE PART OF THE ASSESSEE IN CLAIMING EXCES S DEPRECIATION BECAUSE ONE OF THE BUSES WAS SOLD AT THE END OF THE FINANCIAL YEAR. TH E ASSESSEE DISCLOSED COMPLETE PARTICULARS BEFORE THE AO ON WHICH CALCULATION HAS BEEN MADE OF THE DEPRECIATION BY THE AO. THERE MAY BE SOME MISTAKE ON THE PART OF THE ASSESSEE IN CLAIMING EXCESS DEPRECIATION, BUT THE FACTS CLEARLY DISCLOSE D THAT THE MISTAKE OF THE ASSESSEE WAS RECTIFIABLE, WHICH WAS, IN FACT, RECTIFIED BY T HE AO. ON CONSIDERATION OF THE ENTIRE FACTS AND CIRCUMSTANCES, THEREFORE, RECTIFIC ATION OF THE MISTAKE ON THE PART OF THE ASSESSEE MAY NOT AMOUNT TO CONCEALMENT OF INCOM E OR FURNISHING OF INACCURATE ITA NO. 42/AGRA/2014 3 PARTICULARS OF INCOME. THE LD. COUNSEL FOR THE ASSE SSEE RELIED UPON THE ORDER OF ITAT, AGRA BENCH IN THE CASE OF SHRI SARV PRAKASH K APOOR VS. DCIT IN ITA NO. 95/AGR./2012 DATED 07.09.2012, IN WHICH IT WAS HELD 9. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. THE PROCEEDINGS UNDER SECTION 271 (1)(C) CAN BE INITIATED ONLY IF THE A.O. IS SATISFIED IN THE COUR SE OF ANY PROCEEDINGS UNDER THE ACT THAT THE ASSESSEE HAS CONCEALED THE P ARTICULARS OF HIS INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF S UCH INCOME. THE EXPRESSION USED IN CLAUSE (C) OF SECTION 271(1) IS HAS CONCEALED THE PARTICULAR OF INCOME OR FURNISHED INACCURATE PART ICULARS OF SUCH INCOME. THE EXPRESSION HAS CONCEALED THE PARTICU LARS OF INCOME AND HAS FURNISHED INACCURATE PARTICULAR OF SUCH IN COME HAVE NOT BEEN DEFINED EITHER IN SECTION 271(1)(C) OF THE ACT OR ELSEWHERE IN THE ACT. UNDER THE CIRCUMSTANCES, SUCH CASES ARE REQUI RED TO BE DECIDED CONSIDERING THE FACTS OF THE RESPECTIVE CASES. 10. IN THE CASE UNDER CONSIDERATION, THE CIT(A) HEA VILY RELIED UPON THE JUDGEMENT OF APEX COURT IN THE CASE OF DHARMEND RA TEXTILE PROCESSORS & OTHERS. HOWEVER, SUBSEQUENT TO THIS J UDGMENT, THE HONBLE APEX COURT IN THE CASE OF RELIANCE PETRO PR ODUCTS PVT. LTD., 322 ITR 158 (SC) HAS CONSIDERED THE JUDGMENT IN THE CASE OF DHARMENDRA TEXTILES. THE FALLOUT OF THE DECISION I N UOI VS. DHARAMENDRA TEXTILE PROCESSORS (2008) 306 ITR 277 ( SC) QUESTIONING THE CORRECTNESS OF THE DECISION IN DILI P N. SHROFF V. JOINT CIT (2007) 291 ITR 519 (SC) HAS CAUSED GREAT UNCERT AINTY AS TO THE PENALTY LAW FOR DIRECT TAXES. THE DECISION IN DHAR AMENDRA TEXTILE PROCESSORS CASE (SUPRA) HAS BEEN EXPLAINED BY THE SUPREME COURT ITSELF IN UNION OF INDIA VS. RAJASTHAN SPINNING AND WEAVING MILLS (2010) GSTR 66 (SC), WHEREIN THE SUPREME COURT UNDE RSTOOD DHARAMENDRA TEXTILE PROCESSORS CASE TO BE NOT APPL ICABLE, WHERE SECTION 11AC OF THE CENTRAL EXCISE ACT IS NOT APPLI CABLE, ESPECIALLY SINCE THAT WAS NOT EVEN THE STAND OF THE REVENUE IN THIS CASE. THE SUPREME COURT HAD FURTHER EXPLAINED THE DECISION IN CIT VS. ATUL MOHAN BINDAL (2009) 317 ITR 1 (SC) POINTING OUT THA T DHARAMENDRA TEXTILE PROCESSORS CASE HAS BEEN EXPLAINED IN RAJA STHAN SPINNING AND WEAVING MILLS CASE (SUPRA) AND CONCLUDED IN LI NE WITH THIS DECISION THAT PENALTY UNDER SECTION 11AC OF THE CEN TRAL EXCISE ACT COULD NOT BE LEVIED IN EVERY CASE OF NON-PAYMENT OR SHORT PAYMENT OF ITA NO. 42/AGRA/2014 4 DUTY AND THAT PENALTY IN RESPECT OF SECTION 271(1)( C) OF THE INCOME-TAX ACT WOULD BE LEVIABLE, SUBJECT ONLY TO THE CONDITIO NS THEREUNDER. IT REQUIRED THE MATTER TO BE CONSIDERED NOT SOLELY WIT H REFERENCE TO DHARAMENDRA TEXTILE PROCESSORS CASE BUT ALONG WITH THE DECISION OF RAJASTHAN SPINNING AND WEAVING MILLS CASE (SUPRA). IN THE CASE OF CIT V. RELIANCE PETROPRODUCTS PVT. LTD., 322 ITR 15 8 THE SUPREME COURT FURTHER EXPLAINED THE MATTER AND FINALLY SETT LED THE CONTROVERSY CREATED IN DHARAMENDRA TEXTILE PROCESSORS CASE (SU PRA). THE SUPREME COURT IN THIS CASE HAS ANALYSED THE FACTS I N DILIP N. SHROFFS CASE (SUPRA) AND FOUND FROM THE FACTS, THAT THE EXP LANATION GIVEN BY THE ASSESSEE WAS BONA FIDE NOR DID NOT ASSESSEE FUR NISH ANY INACCURATE PARTICULARS. IT NO DOUBT WENT ON TO OBS ERVE THAT THE ELEMENT OF MENS REA WAS ESSENTIAL. THE SUPREME COU RT IN DHARAMENDRA TEXTILE PROCESSORS CASE (SUPRA) HAD PO INTED OUT ONLY TO THIS ASPECT OF THE DECISION IN THAT, THERE WAS N O NECESSITY TO PROVE MENS REA ON A PLAIN READING OF THE PROVISIONS OF SE CTION 271(1)(C) IN THE CONTEXT OF A PENALTY BEING A COMPENSATION FOR L OSS OF REVENUE LIKELY TO HAVE BEEN OCCASIONED BY THE ACCEPTANCE OF THE RETURN. IT WAS FURTHER POINTED OUT BY THE SUPREME COURT, THAT THE REASONING IN THE CONCLUSION ON THE MERITS IN DILIP N. SHROFFS CASE (SUPRA) HAD NOT BEEN QUESTIONED. IT WAS ONLY THE INFERENCE THAT ME NS REA WAS AN ESSENTIAL INGREDIENT FOR PENALTY, THAT WAS OVERRULE D. APPLYING THIS UNDERSTANDING OF LAW, THE SUPREME COURT FOUND THAT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS (P) LTD. (SUPRA), THE AS SESSING OFFICER HAD FOUND THAT THE ASSESSEES CLAIM FOR DEDUCTION OF TH E ENTIRE INTEREST ON A BORROWING, WHICH HAD BEEN PARTLY UTILISED FOR EAR NING EXEMPT INCOME REQUIRED DISALLOWANCE OF THE PROPORTIONATE P ART UNDER SECTION 14A. THE CLAIM OF THE ASSESSEE WAS THAT, BEING AN INVESTMENT COMPANY, THE CLAIM OF INTEREST NEED NOT BE PROPORTI ONATELY APPORTIONED TO EXEMPT INCOME FROM DIVIDEND, CANNOT JUSTIFY PENALTY EVEN IF THE DISALLOWANCE ITSELF WAS JUSTIFIED. THI S CONCURRENT VIEW OF THE COMMISSIONER (APPEALS), TRIBUNAL AND THE HIGH C OURT WAS UPHELD BY THE SUPREME COURT. 11. IN VIEW OF THE DEVELOPMENT OF LAW AT THE STAGE OF THE SUPREME COURT IN RELIANCE PETROPRODUCTS CASE (SUPRA), ONE NEED NOT TAKE THE TROUBLE OF DISTINGUISHING DILIP N. SHROFFS CASE, S INCE IT HAS NOT BEEN OVERRULED EXCEPT FOR ITS MENTION OF MENS REA THEREI N. NOTWITHSTANDING THE RIPPLE CREATED BY DHARAMENDRA TEXTILE PROCESSOR S CASE (SUPRA), THE HIGH COURTS HAVE FOLLOWED THE LONG-ESTABLISHED LAW, THAT A BONA FIDE OMISSION CANNOT JUSTIFY PENALTY IN A NUMBER OF DECISIONS. WHERE ITA NO. 42/AGRA/2014 5 AN ADDITION TO AN INCOME WAS ADJUSTED AGAINST THE V ALUE OF CLOSING STOCK AND EXPLANATION THEREFORE WAS ALSO FOUND TO B E BONA FIDE, PENALTY WAS FOUND TO HAVE BEEN RIGHTLY DELETED IN C IT VS. HINDUSTAN COMPUTERS LTD. (2010) 322 ITR 88 (ALL). 12. CANCELLATION OF PENALTY FOR A WRONG CLAIM OF DE DUCTION IN COMPUTATION OF NON-AGRICULTURAL INCOME BONA FIDE MA DE AND FOR A WRONG CLAIM OF RELIEF UNDER SECTION 80P WERE FOUND TO BE DECISIONS ON THE FACTS ON WHICH NO QUESTION OF LAW WOULD ARISE A S HELD IN CIT VS. SHAHBAD CO-OP. SUGAR MILLS LTD. (2010) 322 ITR 73 ( P&H). IN THE CASE OF CIT VS. SIDHARTHA ENTERPRISES (2010) 322 IT R 80 (P&H) IT WAS HELD THAT A WRONG CLAIM AS BUSINESS INCOME OF WHAT SHOULD BE TREATED AS SHORT TERM CAPITAL GAINS ON THE ADVICE O F THE ASSESSEES COUNSEL, COULD NOT BE TREATED AS AN INSTANCE OF DEL IBERATE DEFAULT. IN THE CASE OF CHANDRAPAL BAGGA VS. ITAT & ANOTHER, 26 1 ITR 67 (RAJ) THE HONBLE RAJASTHAN HIGH COURT HAS HELD THAT WHEN THE ASSESSEE HAS DISCLOSED THE TRANSACTION WHICH IS THE BASIS FO R CAPITAL GAINS TAX AND THOUGH WRONGLY CLAIMED EXEMPTION FROM THE CAPIT AL GAINS TAX, BUT THAT CANNOT BE A CASE OF PENALTY UNDER SECTION 271( 1)(C) OF THE ACT. IT IF HAS CLAIMED ANY EXEMPTION AFTER DISCLOSING THE R ELEVANT BASIC FACTS AND UNDER IGNORANCE OF THE PROVISIONS OF THE ACT, A ND NOT OFFERED THAT AMOUNT FOR TAX, IN SUCH CASES, PENALTY SHOULD NOT B E IMPOSED. IN SUCH CASES RATHER IT IS THE DUTY OF THE A.O. TO ASK FOR FURTHER DETAILS AND TAX THE INCOME IF IT IS LIABLE TO TAX. IN THE CASE UND ER CONSIDERATION, WE NOTICED THAT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS OFFERED THE TAX AS AND WHEN THE MISTAKE HAS COME TO THE NOTICE OF THE ASSESSEE. SIMILARLY, IN THE CASE OF CIT VS. SUMERP UR TRUCK OPERATION UNION, 203 CTR 205 (RAJ) WHEREIN IT HAS BEEN HELD T HAT MERELY BECAUSE ASSESSEES CLAIM OF EXEMPTION UNDER SECTION 10(24) WAS NOT FOUND TO BE TENABLE, PENALTY UNDER SECTION 271(1)(C ) OF THE ACT COULD NOT BE LEVIED. SIMILAR VIEW HAS BEEN TAKEN BY TH E HONBLE HIGH COURT OF CALCUTTA IN THE CASE OF UDAYAN MUKHERJEE, 291 ITR 318 (CAL). THE APEX COURT WHILE DISMISSING THE DEPARTM ENTAL S.L.P. AGAINST THE JUDGEMENT OF MADRAS HIGH COURT HAS HELD AS UNDER :- (313 ITR (STATUTE) PAGE NO.30) MERE ADDITION NOT SUFFICIENT UNLESS CONCEALMENT ES TABLISHED 20-4-2009 : THEIR LORDSHIPS S.H. KAPADIA AND AFTAB ALAM JJ. DISMISSED THE DEPARTMENTS SPECIAL LEAVE PETITION A GAINST THE JUDGEMENT DATED SEPTEMBER 12, 2008 OF THE MADRAS HI GH COURT IN ITA NO. 42/AGRA/2014 6 T.C. NO 1409 OF 2008, WHEREBY THE HIGH COURT, FOLLO WING 291 ITR 519, DISMISSED THE DEPARTMENTS APPEAL AGAINST THE ORDER OF THE TRIBUNAL WHICH HAD CONFIRMED THE ORDER OF THE COMMI SSIONER (APPEALS) WHO HAD DIRECTED THAT THE PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT BE CANCELLED AND HE LD THAT AN ADDITION WOULD NOT AUTOMATICALLY LEAD TO LEVY OF PENALTY UNL ESS CONCEALMENT WAS ESTABLISHED. : CIT V. SPENCER & CO. : S.L.P. ( C) NO.10283 OF 2009. 13. THE A.O. HAS ALSO INVOKED EXPLANATION 1 TO SECT ION 271(1)(C) OF THE ACT. EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT HAVE TWO PARTS, PART-A OF THE EXPLANATION TO SECTION 271(1)(C) PROV IDES THAT IF THE ASSESSEE FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE A.O. TO BE FALSE, PENALTY UNDER SECTIO N 271(1)(C) WILL APPLY. THIS EXPLANATION CAN, THEREFORE, BE APPLIED ONLY WHERE THE ASSESSEE HAS EITHER NOT OFFERED ANY EXPLANATION OR WHERE HE HAS OFFERED ANY EXPLANATION, THE SAME FOUND TO BE FALSE BY A.O. IN OTHER WORDS, WHERE THE ASSESSEE OFFERS SOME EXPLANATION, IT IS ONLY THE PROVING BY THE A.O. THAT THE EXPLANATION WAS FALSE EXPLANATION, THAT PART- A OF THE EXPLANATION MAY BE ATTRACTED. MERE NON-EXISTENCE OF EXPLANATION OFFERED BY THE ASSESSEE CANNOT FORM A B ASIS FOR THE SATISFACTION OF THE A.O. TO THE EFFECT THAT THE ASS ESSEE HAS CONCEALED PARTICULARS OF HIS INCOME. THE A.O. MUST HAVE SOME DEFINITE EVIDENCE FOR REFUSING THE ASSESSEES CLAIM OR EVIDENCE OR EX PLANATION. 14. THE ESSENCE OF PART-B OF THE EXPLANATION IS THA T THE PERSON MUST PROVIDE AN EXPLANATION WHICH IS BONAFIDE AND HE SHO ULD SUBSTANTIATE THAT EXPLANATION BY SOME EVIDENCE WITH HIM. IF HE FAILS TO DO SO, HIS EXPLANATION MAY BE TREATED AS UNTENABLE. BUT WHEN THE ASSESSEE IS ABLE TO OFFER A REASONABLE EXPLANATION BASED ON SOM E EVIDENCE, THE A.O. CANNOT INVOKE PART-B OF THE EXPLANATION UNLESS HE HAS GIVEN FINDING BASED ON SOME CONTRARY EVIDENCE TO DISAPPRO VE THAT EXPLANATION OFFERED BY THE ASSESSEE WHICH THE ASSES SEE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATI ON IS BONAFIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIA L TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM. 15. IN THE LIGHT OF ABOVE DISCUSSION, IF WE CONSIDE R THE FACTS OF THE CASE UNDER CONSIDERATION, WE FIND THAT THE ASSESSEE HAS FURNISHED COMPLETE FACTS REGARDING COMPUTATION OF CAPITAL GAI N, TOTAL SALE CONSIDERATION, CALCULATION OF LONG TERM CAPITAL GAI N, INVESTMENT IN ITA NO. 42/AGRA/2014 7 RESIDENTIAL HOUSE AND OTHERS. THE MISTAKE ON THE P ART OF THE ASSESSEE IS THAT THE ASSESSEE INVESTED A PART AMOUNT OF SALE CONSIDERATION/ CAPITAL GAIN IN RESIDENTIAL HOUSE INSTEAD OF GROSS SALE CONSIDERATION AND CLAIMED DEDUCTION UNDER SECTION 54F.IT IS RELEV ANT TO NOTE THAT FOR CLAIMING DEDUCTION UNDER SECTION 54 OF THE ACT INVE STMENT OF CAPITAL GAIN IS THE REQUIREMENT WHEREAS FOR CLAIMING DEDICA TION UNDER SECTION 54F INVESTMENT OF SALE CONSIDERATION IS THE CONDITI ON. FROM THE FACTS OF THE CASE IT IS A CLEAR CUT CASE OF BONA FIDE CAL CULATION MISTAKE. SUCH MISTAKES ARE RECTIFIABLE DURING THE COURSE OF ASSES SMENT PROCEEDINGS. RECTIFICATIONS OF SUCH MISTAKES ARE NOT CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME. THE ASSESSEE EXPLAINED THAT THERE IS A BONA FIDE MISTAK E IN CALCULATION OF DEDUCTION UNDER SECTION 54F OF THE ACT. THE A.O. TH OUGH HAS INVOKED EXPLANATION-1 TO SECTION 271(1)(C) BUT HE DID NOT F IND THAT THE EXPLANATION FURNISHED BY THE ASSESSEE WAS A FALSE E XPLANATION. CONTRARY TO THAT THE ASSESSEE HAS SUBSTANTIATED HIS EXPLANATION BY SUBMITTING COMPLETE FACTS REGARDING CALCULATION OF CAPITAL GAIN MISUNDERSTANDING OF DEDUCTION UNDER SECTION 54 AND 54 F OF THE AC. THUS, THE EXPLANATION OF THE ASSESSEE WAS BONAFIDE AND UNDER THAT FACTS AND CIRCUMSTANCES, SECTION OF 271(1)(C) IS NO T APPLICABLE. WE ARE, THEREFORE, OF THE CONSIDERED VIEW THAT UNDER T HE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN THE LIGHT OF THE ABOVE DISCUSSION, THE A.O. IS NOT JUSTIFIED IN LEVYING PENALTY OF RS.2,78 ,660/- UNDER SECTION 271(1)(C) OF THE ACT. THEREFORE, THE SAME IS CANCE LLED. AS ONE OF THE GROUNDS HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE, AS DISCUSSED ABOVE, THEREFORE, OTHER GROUND WHETHER THE RETURN F ILED BY THE ASSESSEE WAS A VOLUNTARY RETURN OR NOT, WE ARE NOT EXPRESSING ANY OPINION ON THAT GROUND/ ISSUE. 16. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. 4. THE LD. COUNSEL FOR THE ASSESSEE ALSO RELIED UPO N THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCT PVT. LTD., 322 ITR 158, IN WHICH IT WAS HELD AS UNDER :- MERELY BECAUSE THE ASSESSEE CLAIMED DEDUCTION OF I NTEREST EXPENDITURE WHICH HAS NOT BEEN ACCEPTED BY THE REVE NUE, PENALTY UNDER S. 271(1)(C) IS NOT ATTRACTED; MERE MAKING OF THE CLAIM, WHICH IS ITA NO. 42/AGRA/2014 8 NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. 5. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT O F ABOVE DECISION, WE ARE OF THE VIEW, PENALTY SINCE DISCRETIONARY IN NATURE, SHOULD NOT BE IMPOSED IN EACH AND EVERY CASE. THEREFORE, THE AUTHORITIES BELOW SHOULD NOT HAVE LEVIED THE PENALTY AGAINST THE ASSESSEE IN THIS CASE. WE ACCORDINGLY, SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND CANCEL THE PENALTY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (PRAMOD KUMAR) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY