The Asstt. Commissioner of Income Tax, Hoshiarpur V. M/s The Hoshiarpur Distt. Co-op Milk Producer, Unian, Ajjowal, Hoshiarpur

ITA 42/ASR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9637 (ITAT-AMRITSAR)
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 27-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 11-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINAY K MALHOTRACA
• Assessee Lawyers: BHAWANI SHANKAR
• Keywords: Capital receipt

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR (CAMP AT JALANDHAR) BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NOS.739 (A SR)/2013 ASSESSMENT YEA R: 2009-10 THE HOSHIARPUR DIST. COOP. MILK PRODUCER UNION LTD. HOSHIAPUR. PAN:AABFT3731E VS. ASST CIT, HOSHIARPUR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. VINAY K. MALHOTRA(CA) RESPONDENT BY: SH. BHAWANI SHANKAR (DR) I.T.A NOS.606 (ASR)/2015 ASSESSMENT YEA R: 2011-12 THE HOSHIARPUR DIST. COOP. MILK PRODUCER UNION LTD. AJOWAL, HOSHIAPUR. PAN:AABFT3731E VS. ASST CIT, HOSHIARPUR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. SACHIN K. MALHOTRA (CA) RESPONDENT BY: SH. BHAWA NI SHANKAR (DR) I.T.A NO.42 (ASR )/2016 ASSESSMENT YEAR: 2009-10 ASST. CIT, HOSHIARPUR CIRCLE, HOSHIAPUR. VS. THE HOSHIARPUR DIST. COOP. MILK PRODUCER UNION LTD. AJOWAL, HOSHIAPUR. PAN:AABFT3731E (APPELLANT) (RESPONDENT) APPELLANT BY: SH. BHAWANI SHANKAR (DR ) RESPONDENT BY: SH. SAC HIN K.MALHOTRA (CA) I TA NOS.73 9 & 42 (ASR)/2013 & 2016 ASST. YEAR: 2009-10 ITA NO.606(ASR) /2015, ASST.YEAR:2011-12 2 DATE OF HEARING: 27.06.2016 DATE OF PRONOUNCEMEN T:09.08.2016 ORDER PER T. S. KAPOOR (AM): THIS IS A BUNCH OF THREE APPEALS FILED BY AS SESSEE AS WELL AS BY REVENUE. THE ASSESSEE HAS FILED APPEALS FOR ASST. YEAR 2009- 10 AND 2011-12 VIDE APPEALS IN ITA NO.739(ASR)/2013 AND ITA NO.606(ASR)/2015 WH EREAS THE REVENUE HAS FILED APPEAL FOR ASST. YEAR 2009-10 VIDE APPEAL IN ITA NO.42(ASR)/2016. 2. IN THESE APPEALS THE ASSESSEE IS AGGRIEVED WITH THE ACTION OF LEARNED CIT(A), BY WHICH HE HAD CONFIRMED THE ADDITION MAD E BY ASSESSING OFFICER BY HOLDING THE CAPITAL RECEIPTS RECEIVED BY ASSESSEE A S REVENUE RECEIPTS. 3. IN ITA NO.42(ASR)/2016, THE REVENUE IS AGGRI EVED WITH THE ACTION OF LEARNED CIT(A), BY WHICH HE HAD DELETED THE PENALTY WHICH T HE ASSESSING OFFICER HAD IMPOSED U/S 271(1)(C) FOR CLAIMING THE REVENUE RECE IPTS AS CAPITAL RECEIPTS. 4. THE ABOVE APPEALS WERE HEARD TOGETHER AND THEREF ORE, FOR THE SAKE OF CONVENIENCE A COMMON AND CONSOLIDATED ORDER IS BEIN G PASSED. 5. AT THE OUTSET, THE LEARNED AR INVITED OUR ATTENT ION TO THE WRITTEN SUBMISSIONS FILED BY ASSESSEE AND FROM THESE WRITTE N SUBMISSIONS THE LEARNED AR EXPLAINED THE FACTS OF THE CASE. THE LEARNED AR SUBMITTED THAT THE ASSESSEE IS A CO-OPERATIVE SOCIETY DERIVING INCOME FROM RUNNING MILK PLANT. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE RECEIVED SUBSIDY F ROM THE PUNJAB GOVT. AND CENTRAL GOVT. AGENCIES UNDER REHABILITATION SCHEME, GRANT FOR MILKING MACHINE I TA NOS.73 9 & 42 (ASR)/2013 & 2016 ASST. YEAR: 2009-10 ITA NO.606(ASR) /2015, ASST.YEAR:2011-12 3 AND GRANT FOR SILAGE PIT CONSTRUCTION WHICH WERE CL EARLY CAPITAL RECEIPTS AND WHICH THE AUTHORITIES BELOW HAD WRONGLY CONSIDERED TO BE REVENUE RECEIPTS. INVITING OUR ATTENTION TO OBJECTS OF THE SCHEME THE LEARNED AR TOOK US TO PB PAGE 1 TO 6 AND SUBMITTED THAT THE OBJECTIVE AND AIM OF THE SCHEME WAS TO REVITALIZE SICK DIARY COOPERATIVE UNIONS AND THE CENTRAL GOVT. AND PUNJAB GOVT. HAD PROVIDED MATCHING GRANTS FOR THE PURPOSES OF UTILIZ ATION THE SAME FOR ACHIEVING THE OBJECTS OF THE SCHEME OF REHABILITATION. THE LE ARNED AR SUBMITTED THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HA D RECEIVED RS.72 LACS OF GRANT IN THE FORM OF RS.36 LACS EACH FROM GOVT. OF INDIA, MINISTRY OF AGRICULTURAL AND FROM GOVT. OF PUNJAB THROUGH MILK FED. IN THIS RESPECT HE INVITED OUR ATTENTION TO (PB PAGE 7 TO 9) WHERE THE EVIDENCE OF HAVING RECEIVED THESE AMOUNTS WAS PLACED. THE LEARNED AR TOOK US TO (PB P AGE 13) WHERE A COPY OF UTILIZATION CERTIFICATE FOR THIS AMOUNT OF GRANT WA S PLACED. THE LEARNED AR SUBMITTED THAT AS PER THIS UTILIZATION CERTIFICATE FURNISHED TO THE GOVT. THE ASSESSEE HAD SPENT AN AMOUNT OF RS.41.46 LACS FOR P URCHASE OF FIXED ASSETS AND AN AMOUNT OF RS.22.72 LACS WAS UTILIZED FOR REPAYME NT OF LOAN OF NDDB AND MILKFED. THE LEARNED AR SUBMITTED THAT BY NO STRETC H OF IMAGINATION THESE INVESTMENTS AND REPAYMENTS CAN BE CONSIDERED TO BE ON REVENUE ACCOUNT. HE SUBMITTED THAT THESE SUBMISSIONS WERE MADE BEFORE A SSESSING OFFICER ALSO AND VARIOUS CASE LAWS INCLUDING THE HONBLE SUPREME COU RT IN THE CASE CIT VS. PONNI SUGARS & CHEM LTD. & ORS.306 ITR 392(SC) WAS RELIED WHERE THE HONBLE COURT HAS HELD THAT FOR THE PURPOSE OF DETERMINING THE NA TURE OF SUBSIDY THE PURPOSE TEST HAS TO BE APPLIED MEANING THEREBY THAT THE PUR POSE OF SUBSIDY HAS TO BE I TA NOS.73 9 & 42 (ASR)/2013 & 2016 ASST. YEAR: 2009-10 ITA NO.606(ASR) /2015, ASST.YEAR:2011-12 4 EXAMINED & IN THIS CASE PURPOSE OF SUBSIDY WAS TO M AKE INVESTMENT IN FIXED ASSETS AND TO REPAY TERM LOANS. IT WAS SUBMITTED TH AT THE ASSESSING OFFICER, HOWEVER, RELIED UPON THE JUDGMENT IN THE CASE OF SA HNEY STEEL AND PRESS WORKS LTD. AND ORS. VS. CIT (1997) 228 ITR 253(SC) AND HE LD THAT THE PAYMENTS WERE RECEIVED BY ASSESSEE FOR CARRYING TRADE OR BUSINESS AND HELD THESE TO BE AS REVENUE RECEIPTS. 6. THE LEARNED AR SUBMITTED THAT SIMILARLY THE AMOU NT RECEIVED BY ASSESSEE FOR GRANT IN AID FOR MAKING AND DRIVING SILAGE PITS FOR CATTLE WAS ALSO CONSIDERED TO BE AS REVENUE RECEIPT WHEREAS THE ASSESSEE ONLY ACTED AS AN INTERMEDIARY AS AMOUNT RECEIVED FROM GOVT. AS SUBSIDY WAS GIVEN TO VARIOUS CO-OPERATIVE SOCIETIES FOR CONSTRUCTION OF THE SILAGE PITS AND T HE ASSESSEE DID NOT RETAIN ANY AMOUNT OUT OF THIS. THE LEARNED AR IN THIS RESPECT, TOOK US TO PB PAGE 30 AND 31 TO HIGHLIGHT THAT THE SAID AMOUNT OF RS.61.50 LACS WAS PAID TO VARIOUS SOCIETIES FOR CONSTRUCTION OF SILAGE PITS IN THEIR AREAS. THE LEARNED AR FURTHER SUBMITTED THAT ASSESSEE HAD NOT CLAIMED THIS PAYMENT TO VARIO US SOCIETIES AS ITS EXPENDITURE, THEREFORE ALTERNATIVELY IF THE AMOUNT OF RS.61.50 LACS IS TO BE CONSIDERED AS REVENUE RECEIPT THEN THE CORRESPONDIN G EXPENDITURE OF THE ASSESSEE SHOULD ALSO BE ALLOWED. 7. HIGHLIGHTING THE FACTS IN ITA NO.606(ASR)/ 2016 FOR ASST. YEAR 2011-12, THE LEARNED AR SUBMITTED THAT IN THIS YEAR ALSO THE FA CTS ARE SIMILAR EXCEPT THE FACT THAT IN THIS YEAR THE GRANT WAS RECEIVED TO THE TUN E OF RS.56.05 LACS OUT OF WHICH THE ASSESSEE HAD ALREADY CREDITED RS.36,92,788/- TO ITS P&L ACCOUNT AND I TA NOS.73 9 & 42 (ASR)/2013 & 2016 ASST. YEAR: 2009-10 ITA NO.606(ASR) /2015, ASST.YEAR:2011-12 5 BALANCE AMOUNT OF RS.19,12,212/- WAS TREATED AS CAP ITAL RECEIPT WHICH THE AUTHORITIES BELOW HAS WRONGLY HELD TO BE AS REVENUE RECEIPT. 8. ARGUING THE APPEAL IN ITA NO.42(ASR)/2016, THE L EARNED AR SUBMITTED THAT ASSESSING OFFICER IN ASST. YEAR 2009-10 HAD IMPOSED PENALTY U/S 271(1)(C) FOR CONCEALMENT OF INCOME IN VIEW OF THE FACT THAT ASSE SSEE HAD DECLARED PART SUBSIDY AS CAPITAL RECEIPTS AND PART SUBSIDY AS REV ENUE RECEIPT. THE ASSESSING OFFICER HAD IMPOSED PENALTY AS THE ASSESSING OFFICE R AND LEARNED CIT(A) HAD TREATED ENTIRE AMOUNT AS REVENUE RECEIPT. HOWEVER, THE LEARNED CIT(A) HAD DELETED THE PENALTY BY PASSING A REASONED AND SPEAK ING ORDER AND HE HEAVILY PLACED HIS RELIANCE ON THE ORDER OF LEARNED CIT(A). 9. THE LEARNED DR, ON THE OTHER HAND, HEAVILY PLACE D HIS RELIANCE ON THE ORDERS OF AUTHORITIES BELOW AS REGARDS THE APPEALS OF THE ASSESSEE AND AS REGARDS THE APPEAL FILED BY REVENUE, HE HEAVILY PLACED HIS RELIANCE ON THE ORDERS OF ASSESSING OFFICER. 10. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. FIRST, WE TAKE UP THE APPEAL IN ITA NO. 739(ASR)/2013. WE FIND THAT IT IS AN UNDISPUTED FACT THAT ASSESSEE RECEIVED RS.72 LACS AS SUBSIDY UNDER REHABILITATION GRANT AS MATCHING GRANTS FROM GOVT. OF PUNJAB & CENTRAL GOVT. OUT OF THIS ASSESSEE ITSELF CREDITED AN AMOUNT OF R S.29,09,681/- TO ITS P&L ACCOUNT TREATING THE SAME AS REVENUE RECEIPT AND RE ST OF THE SUBSIDY AMOUNTS WAS TREATED AS CAPITAL RECEIPT. HOWEVER, THE ASSESS ING OFFICER MADE ADDITION OF I TA NOS.73 9 & 42 (ASR)/2013 & 2016 ASST. YEAR: 2009-10 ITA NO.606(ASR) /2015, ASST.YEAR:2011-12 6 THE ENTIRE AMOUNT OF RS.72 LACS. ON APPEAL BEFORE L EARNED CIT(A) THE LEARNED CIT(A) DELETED THE ADDITION OF RS.29,09,681/- HOLDI NG THAT ASSESSEE HAD ALREADY DECLARED THIS AMOUNT AS REVENUE RECEIPT. 11. BEFORE LEARNED CIT(A), THE ASSESSEE HAD ALSO TA KEN ADDITIONAL GROUND OF APPEAL BY WHICH IT HAD ARGUED THAT ASSESSEE HAD UTI LIZED THE AMOUNT OF RS.29,09,681/- FOR REPAYMENT OF LOANS OF NATIONAL D IARY DEVELOPMENT BOARD AND LOAN FROM MARKED AND HAD RELIED ON THE CASE LAW OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. M/S PONNI SUGAR & CHEMICALS LTD . (SUPRA) FOR THE PROPOSITION THAT THE AMOUNT RECEIVED AS SUBSIDY FOR MAKING REPA YMENTS OF TERM LOANS HAS TO BE TREATED AS CAPITAL RECEIPT. HOWEVER, LEARNED CIT (A) DID NOT ACCEPT THE ARGUMENTS OF ASSESSEE. 12. WE FIND THAT IT IS A FACT THAT ASSESSEE HAD UTI LIZED AN AMOUNT OF RS.27.56 FOR THE PURCHASE OF PLANT AND MACHINERY WHICH FACT IS VERIFIABLE FROM THE COPY OF UTILIZATION CERTIFICATE AS PLACED AT (PB PAGE 13). AS PER UTILIZATION CERTIFICATE THE ASSESSEE HAD ALSO MADE REPAYMENTS OF LOAN OF NDDB & MILKFED. THE BREAKUP OF UTILIZATION AS PER UTILIZATION CERTIFICATE IS REPRO DUCED BELOW. (I) INVESTMENT IN DIARY PLANT RS.27.56 LACS. (II) DCS ORGANIZATION RS.12.90 LACS (III) INVESTMENT IN JEEP RS. 5.64 LACS. (IV) MARKETING ACTIVITIES RS. 3.18 LACS (V) REPAYMENT TO NDDB RS.13.01 LACS (VI) REPAYMENT TO MILKFED RS.9.71 LACS TOTAL RS. 72.00 LACS I TA NOS.73 9 & 42 (ASR)/2013 & 2016 ASST. YEAR: 2009-10 ITA NO.606(ASR) /2015, ASST.YEAR:2011-12 7 FURTHER BREAKUP OF INVESTMENT IN MACHINERY IS ALSO PLACED AT PB PAGE 14. IN THE CHART PLACED AT PAGE 14, THE ITEMS OF PLANT AND MAC HINERY ALONG WITH NAME OF SUPPLIER, THE AMOUNT PAID ALONG WITH CHEQUE NO. AGA INST WHICH PAYMENT HAS BEEN MADE HAS ALSO BEEN NOTED THEREIN. THEREFORE, F ROM THE ABOVE FACTS AND CIRCUMSTANCES WE HELD THAT THE GRANT IN THE FORM OF REHABILITATION GRANT WAS INDEED A CAPITAL RECEIPT AS IT WAS UTILIZED BY ASSE SSEE FOR THE PURCHASE OF FIXED ASSETS AND FOR MAKING REPAYMENT OF TERM LOANS. THE PURPOSE OF GRANT AS NOTED IN THE OBJECTIVE OF SCHEME WAS TO REVITALIZE THE STATE DIARY COOPERATIVE UNITS WHICH CLEARLY MEANS THAT THE OBJECT OF THE REHABILITATION SCHEME WAS TO REVIVE THE SICK COOPERATIVE UNIT AND WAS NOT MEANT FOR CARRYING ON THE BUSINESS OF ASSESSEE AS HELD BY THE AUTHORITIES BELOW. THE HONBLE SUPREME COURT IN THE CASE OF SAHNEY STEELS (SUPRA) HAS CLEARLY HELD THAT IF THE OBJECT OF THE ASSISTANCE UNDER THE SUBSIDY SCHEME WAS TO ENABLE THE ASSESSEE TO SETUP A NEW UNIT OR TO EXPAND THE EXISTING UNIT THEN THE RECEIPT OF SUBSIDY IS TO BE TREATED AS CAPITAL RECEIPT. THOUGH, IN THE PRESENT CASE THE ASSISTANCE WAS NOT FOR SETTING UP NEW UNIT BUT THE OBJECT OF THE SCHEME NECESSARILY WAS TO REVIVE THE SICK UNITS WHICH COULD ONLY BE DONE BY MODERNIZATION AND PUTTING FURTHER I NFRASTRUCTURE IN THE FORM OF INVESTMENT IN PLANT AND MACHINERY. THE HONBLE SUPR EME COURT IN THE CASE OF CIT VS. PONNI SUGAR MILLS AND CHEMICALS LTD. (SUPRA ) AFTER CONSIDERING THE CASE LAW OF SAHNEY STEELS (SUPRA) HAS HELD THAT WHILE DE TERMINING THE NATURE OF SUBSIDY THE PURPOSE TEST HAS TO BE APPLIED. THE HON BLE SUPREME COURT HAS ALSO HELD IN THIS CASE THAT THE AMOUNT RECEIVED AS SUBSI DY FOR MAKING REPAYMENT OF TERM LOANS HAS ALSO TO BE TREATED AS A CAPITAL RECE IPT. THE HONBLE COURT HAS I TA NOS.73 9 & 42 (ASR)/2013 & 2016 ASST. YEAR: 2009-10 ITA NO.606(ASR) /2015, ASST.YEAR:2011-12 8 FURTHER HELD THAT IT IS THE OBJECT FOR WHICH SUBSID Y ASSISTANCE IS GIVEN WHICH DETERMINES THE NATURE OF THE SUBSIDY. IN THE PRESEN T CASE RECEIPT OF SUBSIDY WAS CAPITAL IN NATURE AS THE ASSESSEE WAS OBLIGED TO UT ILIZE THE SUBSIDY AMOUNT ONLY FOR MAKING INVESTMENT IN FIXED ASSETS AND FOR MAKIN G REPAYMENT OF TERM LOANS. IN A RECENT DECISION THE HONBLE SUPREME COURT HAS ALSO DISMISSED AN APPEAL OF REVENUE IN THE CASE OF SH. BALAJI ALLOYS & ORS. VS. CIT (J&K HIGH COURT), WHEREIN THE HONBLE COURT RELIED ON ITS EARLIER JUD GMENT IN THE CASE OF CIT VS. PONNI SUGARS & CHEMICALS (SUPRA). THEREFORE, KEEPIN G IN VIEW THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND RELYING ON TH E JUDGMENTS OF HONLE SUPREME COURT WE HOLD THAT THE SUBSIDY AMOUNT RECEI VED BY ASSESSEE WAS INDEED A CAPITAL RECEIPT. 13. AS REGARDS THE OTHER GROUND OF RS.61.50 LACS, W HICH THE ASSESSEE HAS DISTRIBUTED TO VARIOUS SOCIETIES FOR CONSTRUCTION O F SILAGE PITS WE FIND THAT THE SILAGE PITS WERE TO BE CONSTRUCTED ON THE LAND PROV IDED BY RESPECTIVE SOCIETIES AND THE ASSESSEE WAS ONLY A FACILITATOR FOR THE CON STRUCTION OF SILAGE PITS. THE SCHEME FOR CONSTRUCTION OF SILAGE PITS IN VARIOUS P ARTS IS PLACED AT (PB PAGE 21 TO 27). THE SCHEME WAS FORMED TO ENSURE AVAILABILITY O F GREEN FODDER IN KANDI AREA OF DIST. HOSHIARPUR. WE FURTHER FIND THAT IT HAS NO T BEEN DISPUTED BY AUTHORITIES BELOW THAT SILAGE PITS HAD NOT BEEN CONSTRUCTED BY THE SELECTED SOCIETIES. WE FURTHER FIND THAT ASSESSEE WAS NOT HAVING ANY BENEF ICIARY INTEREST IN THE AMOUNT RECEIVED AS IT WAS ACTING AS A FACILITATOR ONLY. TH E ASSESSEE HAS IMPLEMENTED THE SCHEME OF GOVT. FOR THE WELFARE OF THE SMALL FARMER S LOCATED IN THE KANDI AREA OF DIST. HOSHIARPUR AND GURDASPUR. AT (PB PAGE 30-31) IS PLACED A COPY OF LEDGER I TA NOS.73 9 & 42 (ASR)/2013 & 2016 ASST. YEAR: 2009-10 ITA NO.606(ASR) /2015, ASST.YEAR:2011-12 9 ACCOUNT OF ASSESSEE WHEREIN IT HAS DECLARED AN AMOU NT OF RS.61.50 LACS AS HAVING RECEIVED FROM THE GOVT. FOR MAKING PAYMENTS TO VARIOUS SOCIETIES, WHO HAD CONSTRUCTED THE SILAGE PITS. AS PER THIS LEDGER ACCOUNT THE ASSESSEE HAD RECEIVED RS.61.50 LACS AND HAD SPENT THE SAME AMOUN T BY MAKING CHEQUE PAYMENTS TO VARIOUS SOCIETIES FOR CONSTITUTION OF S ILAGE PITS. THEREFORE, THE ASSESSEE HAD NOT DERIVED ANY BENEFIT FROM THIS GRAN T AND THEREFORE, THE FINDING OF THE AUTHORITIES BELOW IS NOT CORRECT AND IS NOT JUS TIFIED. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES WE DELETE THE ADDITION CONFIRMED BY LEARNED CIT(A) ON THIS ACCOUNT. 14. IN VIEW OF THE ABOVE, THE APPEAL IN ITA NO. 739 (ASR)/2013 IS ALLOWED. 15. NOW WE TAKE APPEAL IN ITA NO.606(ASR)/2105 FOR ASST. YEAR:2011-12. SINCE, THE FACTS AND CIRCUMSTANCES IN THE PRESENT A PPEAL ARE SIMILAR AS THOSE OF DECIDED BY US HEREIN ABOVE IN ITA NO.739(ASR)/2013 FOR ASST. YEAR:2009-10, THE FINDINGS GIVEN THEIRIN SHALL EQUALLY APPLY MUTATIS MUTANDI AND ACCORDINGLY APPEAL IS ALLOWED. 16. IN NUTSHELL, THE APPEALS FILED BY ASSESSEE ARE ALLOWED. 17. NOW COMING TO THE APPEAL FILED BY REVENUE, WE F IND THAT ASSESSING OFFICER HAD IMPOSED THE PENALTY U/S 271(1)(C) FOR DECLARING THE ALLEGED REVENUE RECEIPT AS CAPITAL RECEIPT. THE LEARNED CIT(A) HAS DELETED THE SAME BY HOLDING AS UNDER: 6. I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORD ER, PENALTY ORDER AND THE SUBMISSIONS OF ASSESSEE. THE AMOUNTS IN QUESTION WE RE TREATED BY ASSESSEE AS A CAPITAL RECEIPT WHEREAS THE A.O. AS WELL AS THE LD. CIT(A), WHILE DECIDING THE APPEAL OF ASSESSEE AGAINST QUANTUM ADDITIONS MADE HAVE HELD THAT THE A MOUNTS IN QUESTION WERE REVENUE I TA NOS.73 9 & 42 (ASR)/2013 & 2016 ASST. YEAR: 2009-10 ITA NO.606(ASR) /2015, ASST.YEAR:2011-12 10 RECEIPT IN THE HANDS OF THE ASSESSEE. THE MATTER HA S YET NOT ATTAINED FINALITY AS THE MATTER IS PENDING BEFORE THE HONBLE ITAT AMRITSAR FOR ADJUD ICATION. THE CRUX OF THE ARGUMENTS OF ASSESSEE AS FAR AS LEV Y OF PENALTY IS CONCERNED, IS THAT ALL THE FACTS WERE CLEAR FROM THE RETURN OF INCOME REGARDING THE CLAIM MADE AND THERE WAS NO CONCEALMENT OR A CASE OF FURNISHING INACCURATE P ARTICULARS. THE CLAIM WAS MADE IN VIEW OF THE DECISION OF THE SUPREME COURT IN THE CASE OF M/S PONNI SUGARS & CHEMICALS LTD. 306 ITR 392 (SUPREME COURT). THE ISSUE WAS PURELY LEGAL IN NATURE AND DEBATABLE AND THE CASE OF M/S GURUDASPUR CO-OP. SUGAR MILLS 354 ITR 27 WAS CLEARLY APPLICABLE AS WELL AS OTHER CASE LAWS WHICH WERE CITED IN SUPPORT OF ASSESSEE. I FIND THAT THERE CANT BE TWO OPINIONS THAT THE ISSUE AT HAND IN PURELY LEGAL AND DEBATABL E. THE FACTUAL UNDISPUTED POSITION WAS CLEAR FROM THE BALANCE SHEET AND THERE WAS NO FURNI SHING OF INACCURATE PARTICULARS. A CLAIM, THOUGH DECIDED AGAINST THE ASSESSEE CANT BE SAID T O BE A CASE OF EITHER CONCEALMENT OR OF FURNISHING INACCURATE PARTICULARS. IN THE CASE OF M /S GURUDASPUR COOPERATIVE SUGAR, THE HON'BLE JURISDICTIONAL HIGH COURT OF PUNJAB & HARYA NA IS SQUARELY APPLICABLE TO ACT OF THIS CASE. IT WAS HELD BY HONBLE HIGH COURT OF P & H IN THAT CASE, AS :R (HEAD NOTES). 'PENALTY U/S 271(L)(C)- FURNISHING OF INACCURATE PA RTICULARS - ASSESSEE RECEIVED SUBSIDY FROM GOVERNMENT AND CLAIMED AS CAPITAL RECE IPT- SAME WAS TREATED AS REVENUE RECEIPT AND IMPOSED PENALTY - PENALTY WAS S ET ASIDE BY TRIBUNAL - HELD, ISSUE WHETHER AMOUNT OF GRANT IN AID IS CAPITAL REC EIPT OR A REVENUE RECEIPT, IS A DEBATABLE ISSUE - THEREFORE, THERE IS NO ERROR IN F INDINGS RECORDED BY TRIBUNAL WHILE SETTING ASIDE PENALTY - REVENUES APPEAL DISMISSED. 7. IN THIS DECISION IT WAS FURTHER HELD THAT:- IN THE PRESENT CASE, THERE IS NO DISPUTE ABOUT THE QUANTUM OF RECEIPT OF GRANT IN AID FROM THE STATE GOVERNMENT. THE ASSESSEE REFLECTED T HE SAME AS CAPITAL RECEIPT, WHEREAS IT HAS BEEN TREATED AS TO BE REVENUE RECEIP T. THE ISSUE; WHETHER THE AMOUNT OF GRANT IN AID IS CAPITAL RECEIPT OR A REVE NUE RECEIPT, IS A DEBATABLE ISSUE. THE FINDINGS RETURNED IN THE JUDGMENT RELIED UPON I S ON FACT OF NON-FURNISHING OF DETAILS OF EXPENSES. THE ISSUE WAS NOT DEBATABLE AS IN THE PRESENT CASE. THEREFORE, THE RELIANCE ON THE DIVISION BENCH JUDGMENT IS MISC ONCEIVED. ' 8. THE RATIO OF THE CASE OF M/S RELIANCE PETRO PRODUCTS ( P) LTD. 322 ITR 15 IS ALSO APPLICABLE TO THIS CASE WHEREIN IT WAS HELD AS UNDE R:- 'CIT V/S RELIANCE PETRO PRODUCTES ( P) LTD. (SC) 322 ITR 1561. 'A MERE MAKING A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF WILL NOT AMOUNT OF FURNISHING INACCURATE PARTICULARS REGARDING THE INC OME OF ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. ' 9. IN VIEW OF THE ABOVE, RESPECTFULLY FOLLOWING THE ABOVE AND IN VIEW OF ISONS AS ADVANCED IN THIS ORDER, I HEREBY DELETE THE PENALTY LEVIED U/S 271(1 )(C) INCOME TAX ACT AT RS. 32,29,150/-. WE FIND THAT LEARNED CIT(A) HAS PASSED A REASONED A ND SPEAKING ORDER WHEREIN HE HAS HELD THAT ASSESSEE HAD NOT FURNISHED INACCUR ATE PARTICULARS AS IT HAD DECLARED THE AMOUNT RECEIVED AS SUBSIDY IN ITS BALA NCE SHEET AND IT WAS ONLY THE NATURE OF SUBSIDY WHICH WAS DISPUTED BY THE ASSESSI NG OFFICER AND THEREFORE, HE I TA NOS.73 9 & 42 (ASR)/2013 & 2016 ASST. YEAR: 2009-10 ITA NO.606(ASR) /2015, ASST.YEAR:2011-12 11 HAD RIGHTLY HELD THE PENALTY WAS NOT IMPOSABLE. WHI LE ARRIVING AT THE CONCLUSION OF DELETING THE PENALTY, THE LEARNED CIT(A) HAS REL IED UPON THE CASE LAW DECIDED BY HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF GURDASPUR COOPERATIVE SUGAR MILLS 354 ITR 27 (P&H) WHERE UNDER SIMILAR FA CTS AND CIRCUMSTANCES, THE HONBLE PUNJAB & HARYANA HIGH COURT HAD DELETED THE PENALTY. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE DID NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A), THEREFORE, THE APPEAL FILED BY REVE NUE IS DISMISSED. 18. IN NUTSHELL, THE APPEALS FILED BY ASSESSEE ARE ALLOWED WHEREAS THE APPEAL FILED BY REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09 .08.2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:09.08.2016. /PK/PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER