M/s. Nile Limited, Hyderabad V. The Dy. Commissioner of Income Tax, Circle 16(1), Hyderabad

ITA 453/HYD/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59190 (ITAT-HYDERABAD)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 18-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T DIWAKAR PRASAD
• Assessee Lawyers: T S AJAI
• Keywords: Wrong claim; Bad and doubtful debts; Revenue expenditure; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER. ITA NO.453/HYD/2011 : ASSESSMENT YEAR 2004-05 M/S. NILE LTD., HYDERABAD ( PAN- AAACN 7343 L ) V/S. DY. COMMISSIONER OF INCOME - TAX CIRCLE 16(1), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.S.AJAI RESPONDENT BY : SHRI T.DIWAKAR PRASAD DATE OF HEARING 18. 1.2012 DATE OF PRONOUNCEMENT 3.2.2012 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-V, HYDERABAD DA TED 20.1.2011, CONFIRMING PENALTY OF RS.42,23,205 LEVIED UNDER S.2 71(1)(C) OF THE ACT. 2. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSE E COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF GLASS LINED FABRICATED EQUIPMENT AND IS A PRODUCER OF WIND ENERGY. FOR TH E ASSESSMENT YEAR 2004-05, THE ASSESSEE COMPANY FILED ITS RETURN OF I NCOME ON 27.10.2004 DECLARING A LOSS OF RS.1,36,40,753. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT, VIDE ORDER OF ASSESSMENT DATED 29.12.2 006 PASSED UNDER S.143(3) OF THE ACT, DETERMINING THE LOSS OF THE AS SESSEE AT RS.12,69,768, AFTER MAKING THE FOLLOWING ADDITIONS/DISALLOWANCES- (A) DISALLOWANCE OF GRATUITY PAYMENT RS. 2,10,172 (B) DISALLOWANCE OF INVESTMENTS WRITTEN OFF RS.17. 40 LAKHS UNDER S.37 OF THE ACT (C) DISALLOWANCE OF BAD DEBTS WRITTEN OFF RS.100 .32 LAKHS ITA NO.453/HYD/2011 M/S. NILE LIMITED, HYDERABAD. 2 3. ON APPEAL, THE CIT(A) THOUGH SUSTAINED THE ADD ITIONS AT (B) AND (C) ABOVE, HE DELETED THE ADDITION MADE BY THE ASSE SSING OFFICER BY WAY OF DISALLOWANCE OF GRATUITY PAYMENT OF RS.2,10,172. T HE TRIBUNAL TOO, ON APPEAL, UPHELD THE ADDITIONS CONFIRMED BY THE CIT(A ). 4. WHILE THUS COMPLETING THE ASSESSMENT BY HIS OR DER DATED 29.12.2006, AS ABOVE, THE ASSESSING OFFICER ALSO IN ITIATED PROCEEDINGS FOR LEVY OF PENALTY FOR CONCEALMENT UNDER S.271(1)(C) O F THE ACT. AFTER EXAMINING THE EXPLANATION OF THE ASSESSEE IN RESPON SE TO THE PENALTY NOTICE, THE ASSESSING OFFICER ULTIMATELY LEVIED THE PENALTY FOR CONCEALMENT, VIDE ORDER DATED 24.2.2010, PASSED UNDER S.271(1)(C ) OF THE ACT, WITH THE FOLLOWING REASONING- 7. THE ASSESSEES RELIANCE ON ALL THE ABOVE CASES IN PLEADING FOR NON-LEVY OF PENALTY IS MISPLACED. THE DEPARTMENT HA S DISCHARGED THE ONUS IN ESTABLISHING THAT THE ASSESSEE HAD MADE A PATENTLY WRONG CLAIM PLACING RELIANCE ON SOME DECISIONS, WHICH ARE NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE. THIS ACT OF THE ASSESSEE CANNOT BE TERMED AS BONA FIDE. IT HAS BEEN PROVE D AS A COROLLARY FROM THE FACTS AND CIRCUMSTANCES ESTABLISHED ON REC ORD AS UPHELD BY THE ITAT THAT THE ASSESSEE HAS MADE A CONSCIOUS CLA IM FOR DEDUCTION FOR WHICH IT IS NOT ELIGIBLE. THERE IS EVERY REASON TO LEVY PENALTY IN TERMS OF THE PROVISIONS OF SEC.271(1)(C) R.W. ALL E XPLANATIONS TO SEC.271(1)(C) IN THE PRESENT CASE OF THE ASSESSEE. THE MINIMUM AMOUNT OF PENALTY WORKS OUT TO RS.42,23,205 AND THE MAXIMUM AMOUNT OF PENALTY WORKS OUT TO RS.1,26,69,6515.. C ONSIDERING THE FACTS OF THE CASE, I LEVY THE MINIMUM PENALTY U/S. 271(1)(C) OF RS.42,23,205 (RUPEES FORTY TWO LAKHS TWENTY THREE T HOUSAND TWO HUNDRED AND FIVE ONLY). THE SAME SHOULD, BE PAID A S PER DEMAND NOTICE ENCLOSED. 5. AGGRIEVED BY THE ABOVE ORDER OF PENALTY, ASSESS EE PREFERRED APPEAL BEFORE THE CIT(A). THE CIT(A), AFTER TAKING NOTE OF THE PROVISIONS OF S.271(1)(C), IN THE LIGHT OF THE RATIO OF THE DECIS IONS OF THE APEX COURT IN THE CASES OF DILIP N. SHROFF V/S. JOINT CIT(291 ITR 519 ); UNION OF INDIA V./S. DHARMENDRA TEXTILE PROCESSORS AND OTHERS IN CIVIL A PPEAL NOS.10289-10303 OF 2003, PROCEEDED TO EXAMINE THE FACTUAL ASPECTS R ELATING TO THE ADDITIONS WHICH LED TO THE IMPUGNED PENALTY PROCEEDINGS, VIZ. OF RS.17.4 LAKHS WRITTEN ITA NO.453/HYD/2011 M/S. NILE LIMITED, HYDERABAD. 3 OFF AND CLAIMED AS BUSINESS LOSS; AND OF RS.RS.100. 32 LAKHS REPRESENTING BAD DEBTS. HE NOTED THAT THE ASSESSEE COMPANY INV ESTED A SUM OF RS.1.26 CRORES TOWARDS EQUITY SHARES IN M/S. VALLABHA INVES TMENTS PVT. LTD. ON 16.1.1997, AND WHEN THIS INVESTMENT WAS RECALLED, A SSESSEE RECEIVED ONLY AN AMOUNT OF RS.1.08 CORES, WHICH RESULTED IN THE W RITE OFF OF THE BALANCE AMOUNT OF RS.17.4 LAKHS AS BUSINESS LOSS. THE CIT( A), OBSERVING THAT SHARE TRADING WAS NEVER THE BUSINESS OF THE ASSESSE E, AND THE ASSESSEE KNEW VERY WELL THAT NEITHER IT HAD ANY INFRASTRUCTU RE NOR ANY INTENT TO BE IN THE BUSINESS OF SHARE TRADING, AND ALSO DRAWING SUP PORT IN THAT BEHALF FROM THE ORDER OF THE TRIBUNAL DATED 26.6.2009 IN ITA NO S.274 TO 276/HYD/2009, WHEREIN IT WAS NOTED THAT THE INVESTMENT WAS MADE A S FAR BACK AS IN JANUARY, 1997, THE CIT(A) CONCLUDED THAT IT IS A CL EAR CUT CASE WHERE THE ASSESSEE WANTED TO SHOW DELIBERATELY CAPITAL LOSS A S REVENUE LOSS IN NATURE AND NOT TO PAY TAXES DUE AS A RESULT. 6. SIMILARLY, WITH REGARD TO THE CLAIM FOR DEDUCTI ON IN RESPECT OF BAD DEBTS AMOUNTING TO RS.100.32 LAKHS ALSO, THE CI T(A) NOTED THAT THE ASSESSEE HAD ADVANCED A SUM OF RS.1.8 CRORES TO PRE MIER HOUSING INDUSTRIAL ENTERPRISE LIMITED CHENNAI FOR THE PURPO SE OF CONSTRUCTION OF OFFICE COMPLEX AT CHENNAI. HE OBSERVED THAT THIS W AS CLEARLY A CAPITAL EXPENDITURE AND IT WAS FOR THAT VERY REASON THAT DE DUCTION WAS NOT ALLOWED IN THE QUANTUM PROCEEDINGS, EVEN BY THE APPELLATE A UTHORITIES, VIZ. BY THE CIT(A) OR BY THE TRIBUNAL. THAT BEING SO, HE HELD THAT THE ASSESSEE HAS DELIBERATELY CLAIMED CAPITAL LOSS AS A REVENUE LOSS , AND MISLED THE DEPARTMENT TO AVOID PAYMENT OF TAXES DUE, AND HAD T HE ASSESSING OFFICER NOT CONDUCTED A THOROUGH SCRUTINY, THE FALSE CLAIMS WOULD HAVE BEEN ALLOWED. HE ACCORDINGLY, SUSTAINED THE PENALTY OF R S. 42,23,205 LEVIED BY THE ASSESSING OFFICER. 7. AGGRIEVED BY THE ORDER OF THE CIT(A), ASSESSEE IS IN SECOND APPEAL BEFORE THIS TRIBUNAL. ITA NO.453/HYD/2011 M/S. NILE LIMITED, HYDERABAD. 4 8. LEARNED COUNSEL FOR THE ASSESSEE, REITERATING T HE CONTENTIONS URGED BEFORE THE LOWER AUTHORITIES SUBMITTED THAT T HE DISALLOWANCES MADE IN ASSESSMENT ARE ONLY ON ACCOUNT OF DIFFERENCE IN INT ERPRETATION AS TO THE ALLOWABILITY OF THE EXPENDITURE AND THAT THE ASSESS EE HAS FILED FULL PARTICULARS OF THE CLAIM AND CONSEQUENTLY, THERE IS NO DEFAULT OF EITHER CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME. IT IS FURTHER SUBMITTED THAT THE CIT(A) HAS NOT CORRECTLY APPRECI ATED THE FINDINGS OF THE CIT(A) AND THE TRIBUNAL IN THE QUANTUM PROCEEDINGS, AND WRONGLY CONCLUDED THAT THE ADDITIONS WHICH LED TO THE IMPUGNED PENALT IES WERE NOT IN RELATION TO DEBATABLE ISSUES. THE LEARNED COUNSEL FOR THE A SSESSEE ALSO SUBMITTED THAT THE LOWER AUTHORITIES WERE NOT JUSTIFIED IN CO NCLUDING THAT THE ASSESSEE HAD DELIBERATELY AND FALSELY CLASSIFIED CAPITAL EXP ENDITURE AS REVENUE EXPENDITURE, WHICH FINDING IS WITHOUT ANY BASIS AND AGAINST THE WEIGHT OF EVIDENCES ON RECORD. HE SUBMITTED THAT THE ASSES SEE HAS VOLUNTARILY FURNISHED ENTIRE PARTICULARS OF THE CLAIMS MADE AND THE JUSTIFICATION FOR THE CLAIMS AND THE DISALLOWANCES WERE MADE BY THE ASSES SING OFFICER ONLY BASED UPON DIFFERENT INTERPRETATION AS TO WHETHER THE IMP UGNED EXPENDITURE IS CAPITAL OR REVENUE IN NATURE. IT IS SUBMITTED THAT THE TRIBUNAL TOO IN THE QUANTUM PROCEEDINGS HAS MERELY CONFIRMED THE ADDITI ONS MADE ON THE BASIS OF CERTAIN PRINCIPLES, AND HAS NOT MADE ANY OBSERVA TIONS WHICH COULD LEAD TO THE CONCLUSION THAT THE ASSESSEE HAD DELIBERATELY AND FALSELY CLASSIFIED THE EXPENDITURE AS REVENUE EXPENDITURE. HE ALSO DISPU TED THE FINDING OF THE CIT(A) THAT HAD THE ASSESSING OFFICER NOT CONDUCTED A THOROUGH SCRUTINY, THE FALSE CLAIMS WOULD HAVE BEEN ALLOWED, AND SUBMITTED THAT THE ADDITIONS IN QUESTION HAVE BEEN MADE MERELY ON THE BASIS OF THE MATERIAL ALREADY FURNISHED BY THE ASSESSEE, AND THE CLAIMS OF THE AS SESSEE HAVE BEEN DENIED MERELY ON THE BASIS OF DIFFERENCE IN INTERPRETATIO N MADE BY THE REVENUE AUTHORITIES. HE SUBMITTED THAT MERELY BECAUSE THE A DDITIONS HAVE BEEN MADE BASED ON INTERPRETATION OF A FACT OR LAW IN A MANNER, DIFFERENT FROM THAT OF THE ASSESSEE, IT CANNOT BE SAID THAT THE AS SESSEE HAS EITHER CONCEALED THE INCOME OR FURNISHED INACCURATE PARTIC ULARS OF INCOME. IN FACT, IT IS SUBMITTED THAT THE ASSESSEE HAS FURNISHED ALL THE PARTICULARS TO ITA NO.453/HYD/2011 M/S. NILE LIMITED, HYDERABAD. 5 SUBSTANTIATE ITS CLAIMS WITH REGARD TO BOTH THE ITE MS OF REVENUE CLAIMED, AND THE REVENUE HAS DISALLOWED THE CLAIMS OF THE AS SESSEE, BASED ON THE VERY SAME MATERIAL FURNISHED BY THE ASSESSEE, AND A S SUCH PROVISIONS OF S.271(1)(C) ARE NOT ATTRACTED TO THE FACTS OF THE P RESENT CASE. THE LEARNED COUNSEL FOR THE ASSESSEE, HAS PLACED RELIANCE ON TH E FOLLOWING DECISIONS IN SUPPORT OF HIS SUBMISSIONS- 1. CIT V/S. RELIANCE PETRO-PRODUCTS (P) LTD., (189 TAX MAN 322(SC) 2. DR.T.SURYANARAYANA RAO V/S. ITO (2011) 16 TAXMAN.CO M 296(HYD) 3. HCIL ARSSPL TRIVENI (JV) V/S. ACIT (2011 TAXMANN.C OM 384(DEL) 4. DCIT V/S. AJAY KUMARLAL (2011) 48 SOT 116(AHD)(URO) 5. HOE LEATHER GARMENTS LTD. V/S. DCIT(39 SOT 210)-HYD 6. DINESH B.THAKKAR V/S. ACIT (2010 ) 5 ITR(TRIB) 120( AHD. 7. CIT V/S. IFCI LTD. (2011 ) 199 TAXMAN 21 (DEL) LEARNED COUNSEL FOR THE ASSESSEE, BESIDES FILING CO PIES OF THE LOWER AUTHORITIES AND THIS TRIBUNAL IN THE QUANTUM PROCEE DINGS, AND THE ORDERS IMPUGNED IN THE PRESENT APPEAL IN A PAPER-BOOK, FIL ED COPIES OF THE ABOVE DECISIONS IN ANOTHER PAPER-BOOK. 9. LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTH ER HAND, STRONGLY SUPPORTED THE ORDERS OF THE LOWER AUTHORIT IES AND SUBMITTED THAT THE ASSESSEE HAS DELIBERATELY CLASSIFIED ITEMS OF C APITAL LOSS AS REVENUE LOSS, AND CONSEQUENTLY SOUGHT TO AVOID PAYMENT OF TAXES D UE ON ITS INCOME. BUT FOR THE SCRUTINY OF THE CLAIMS OF THE ASSESSEE BY T HE ASSESSING OFFICER IN DETAIL, THE ASSESSEE WOULD HAVE GOT THE BENEFIT OF THE INCORRECT CLAIMS MADE BY IT IN RESPECT OF BOTH THE ITEMS OF LOSSES. AS S UCH, HE SUBMITTED THAT IT IS A FIT CASE FOR THE LEVY OF PENALTY UNDER S.271(1)(C ) OF THE ACT, AND THEREFORE, THE IMPUGNED ORDERS OF THE LOWER AUTHORI TIES DESERVE NO INTERFERENCE. DISTINGUISHING THE CASE-LAW RELIED U PON BY THE LEARNED COUNSEL FOR THE ASSESSEE, HE PLACED RELIANCE OF HONBLE KER ALA HIGH COURT IN CIT V/S. GATES FOAM AND RUBBER COMPANY(91 ITR 467). ITA NO.453/HYD/2011 M/S. NILE LIMITED, HYDERABAD. 6 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE ORDERS OF THE LOWER AUTHORITIES. WE HAVE ALSO GONE THROUGH THE CASE-LAW RELIED UPON BY THE ASSESSEE AS NOTED ABOVE, AND THE CASE-LAW REFERRED TO BY THE CIT(A) IN THE IMPUGNED APPELLATE ORDER. IT IS AN ADMITTED FACT THAT THE REVENUE HAS NOT BROUGHT ON RECORD ANY NEW MATERIAL FOR MAKING THE ADDITIONS IN QUESTION, WHICH HAVE BEEN MADE BY THE ASSESSING OFFICER BASED ON THE VERY SAME MATERIAL FURNISHED BY THE ASSESSEE WITH THE RETURN OR IN THE COURSE OF ASSESSMENT PROCEEDINGS, AS REQUISITIO NED BY THE ASSESSING OFFICER. IT CANNOT BE OUTRIGHTLY SAID THAT WHETHER A PARTICULAR ITEM CLAIMED AS OF REVENUE NATURE IS ALLOWABLE AS SUCH OR IT IS IN THE NATURE OF CAPITAL DOES NOT INVOLVE INTERPRETATION OR DEBATE. THERE COULD BE DIFFERENCE IN THE MATTER OF INTERPRETATION OF A PARTICULAR ITEM OR TW O CLAIMED BY THE ASSESSEE AS OF REVENUE NATURE, AND ADDITION MADE BY THE REVE NUE AUTHORITIES TREATING THE SAME AS OF CAPITAL NATURE. THAT DIFFE RENCE IN INTERPRETATION MAY JUSTIFY AN ADDITION TO BE MADE IN THE QUANTUM PROCE EDINGS AND IT MAY BE SUSTAINED BY THE APPELLATE AUTHORITIES. BUT THAT A DDITION BY ITSELF DOES NOT JUSTIFY THE PENAL CONSEQUENCES. IT IS SETTLED POSI TION OF LAW THAT PENALTY PROCEEDINGS ARE INDEPENDENT OF ASSESSMENT PROCEEDIN GS, AND THE MATTER HAS TO BE EXAMINED INDEPENDENTLY IN THE COURSE OF P ENALTY PROCEEDINGS, TO JUSTIFY IMPOSITION OF PENALTY UNDER S.271(1) (C), I N A PARTICULAR CASE. IN THE FACTS OF THE CASE ON HAND, THE BAD DEBT CLAIMED OF RS.100.32 LAKHS REPRESENTS THE DIFFERENCE BETWEEN THE AMOUNT ADVANC ED BY THE ASSESSEE TO PREMIER HOUSING INDUSTRIAL ENTERPRISES LIMITED FOR THE CONSTRUCTION OF AN OFFICE COMPLEX AT CHENNAI, AND THE MONEY RECEIVED B ACK WHEN THAT COMPANY BECAME DEFUNCT, AND THE OTHER AMOUNT OF RS. 17.40 LAKHS CLAIMED AS BUSINESS LOSS, REPRESENTS THE DIFFERENCE BETWEEN THE AMOUNT INVESTED IN THE EQUITY SHARES OF M/S. SRI VALLABHA INVESTMENTS PVT. LTD. AND THE AMOUNT RECEIVED WHEN IT WAS RECALLED. WHILE THE ASSESSEE CLAIMED THESE TWO ITEMS AS OF REVENUE NATURE AND CLAIMED DEDUCTION IN THE C OMPUTATION OF INCOME, THE REVENUE AUTHORITIES TREATING THE SAME AS OF CAP ITAL NATURE, MADE THE ADDITIONS WHICH LED TO THE PENALTY UNDER DISPUTE IN THE PRESENT APPEAL. ITA NO.453/HYD/2011 M/S. NILE LIMITED, HYDERABAD. 7 CONSIDERING TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THIS IS NOT A FIT CASE FOR THE LEVY OF PENALTY UNDER S.2 71(1)(C) SINCE THE ASSESSEE IS NOT GUILTY OF EITHER CONCEALED ANY INCOME OR FUR NISHED INACCURATE PARTICULARS OF INCOME. WE ARE SUPPORTED IN THIS BEH ALF BY THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT V/S. RELIANCE PET RO-PRODUCTS (P) LTD.(2010) 189 TAXMAN 322(SC), WHEREIN, DEALING WIT H THE ALLEGATION OF THE REVENUE AGAINST THE ASSESSEE AS TO THE FALSITY OF CLAIM MADE BY THE ASSESSEE, IT HAS BEEN HELD AS FOLLOWS- THE REVENUE CONTENDED THAT SINCE THE ASSESSEE HAD CLAIMED EXCESSIVE DEDUCTIONS KNOWING THAT THEY WERE INCORRE CT, IT AMOUNTED TO CONCEALMENT OF INCOME. IT WAS ARGUED THAT THE FA LSEHOOD IN ACCOUNTS CAN TAKE EITHER OF THE TWO FORMS; (I) AN I TEM OF RECEIPT MAY BE SUPPRESSED FRAUDULENTLY; (II)AN ITEM OF EXPENDIT URE MAY BE FALSELY (OR IN AN EXAGGERATED AMOUNT) CLAIMED, AND BOTH TYP ES ATTEMPT TO REDUCE THE TAXABLE INCOME AND, THEREFORE, BOTH TYPE S AMOUNT TO CONCEALMENT OF PARTICULARS OF ONES INCOME AS WELL AS FURNISHING OF INACCURATE PARTICULARS OF INCOME. SUCH CONTENTION C OULD NOT BE ACCEPTED AS THE ASSESSEE HAD FURNISHED ALL THE DETA ILS OF ITS EXPENDITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, IN THEMSELVES , WERE NOT FOUND TO BE INACCURATE NOR CO ULD BE VIEWED AS THE CONCEALMENT OF INCOME ON ITS PART. IT WAS UP T O THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETURN OR NOT. MERELY B ECAUSE THE ASSESSEE HAD CLAIM ED THE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT, BY ITSELF, WOU LD NOT ATTRACT THE PENALTY UNDER SECTION 271(1)(C). IF THE CONTENTION OF THE REVENUE WAS ACCEPTED, THEN IN CASE OF EVERY RETURN WHERE TH E CLAIM MADE WAS NOT ACCEPTED BY THE ASSESSING OFFICER FOR ANY R EASON, THE ASSESSEE WOULD INVITE PENALTY UNDER SECTION 271(1)( C). THIS IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE. 11. IN THE LIGHT OF THE FOREGOING DISCUSSION, WE FIND NO JUSTIFICATION TO SUSTAIN THE IMPUGNED PENALTY, WHICH IS ACCORDING LY CANCELLED, AND THE GROUNDS OF THE ASSESSEE IN THIS APPEAL ARE ALLOWED. 12. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 3 RD FEBRUARY, 2012 SD/- (ASHA VIJAYARAGHAVAN) SD/ - (CHANDRA POOJARI) JUDICIAL MEMBER. ACCOUNTANT MEMBER. DATED 3 RD FEBRUARY, 2012 ITA NO.453/HYD/2011 M/S. NILE LIMITED, HYDERABAD. 8 COPY FORWARDED TO: 1. M/S. NILE LTD., INDUSTRIAL ESTATE, NACHARAM, HYDERA BAD 2. DY. COMMISSIONER OF INCOME - TAX , CIRCLE 16(1) , HYDERABAD 3. COMMISSIONER OF INCOME-TAX(APPEALS)-V , HYDERABA D 4. COMMISSIONER OF INCOME - TAX I V , HYDERABAD 5. THE D.R., ITAT, HYDERABAD. B.V.S