PRAVIN SHAH TRUST, MUMBAI V. DCIT RG 14(1), MUMBAI

ITA 4782/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4211 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 26-06-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 10-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: GOPAL BOHRA
• Keywords: Capital asset; Question of law; Wrong claim

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUM BAI , ! ! ! ! '! !, $ BEFORE SHRI SANJAY ARORA, A. M. AND SHRI VIJAY PAL RAO, J. M. ./ I.T.A. NO.4782/MUM/2010 ( ' ( !)( ' ( !)( ' ( !)( ' ( !)( / / / / ASSESSMENT YEAR: 2004-05) PRAVIN SHAH TRUST 95B, MEGHDOOT, FLAT NO.5, MARINE DRIVE, MUMBAI-400 020 ' ' ' ' / VS. DY. CIT-14(1), 2 ND FLOOR, EARNEST HOUSE, NARIMAN POINT, MUMBAI-400 021 * ./ + ./ PAN/GIR NO. AAATP 0068 P ( *, / APPELLANT ) : ( -.*, / RESPONDENT ) *, / / APPELLANT BY : SHRI GOPAL BOHRA -.*, 0 / / RESPONDENT BY : SHRI RAJARSHI DWIVEDY '! 0 12 / // / DATE OF HEARING : 26.06.2013 3) 0 12 / DATE OF PRONOUNCEMENT : 05.07.2013 4 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-25, MUMBAI (CIT(A) FOR SH ORT) DATED 20.04.2010, CONFIRMING THE LEVY OF THE PENALTY U/S.271(1)(C) OF THE INCOM E TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 2004-05 VIDE ORDER D ATED 30.10.2006 AT RS.102 LACS , I.E., AS LEVIED, BEING ONLY MARGINALLY OVER THE MINIMUM P ENALTY OF 100% OF THE TAX SOUGHT TO BE EVADED, WHICH WORKS TO RS.101.47 LACS. 2 ITA NO.4782/MUM/2010 (A.Y. 2004-05) PRAVIN SHAH TRUST VS. DY. CIT 2. EXPLAINING THE FACTS OF THE CASE, IT WAS SUBMITT ED BY THE LD. AR, THE ASSESSEES COUNSEL, THAT THE IMPUGNED PENALTY ARISES ON ACCOUN T OF DISALLOWANCE OF THE LOSS ON THE TRANSFER OF UNITS OF US-64, CLAIMED BY THE ASSESSEE PER ITS RETURN OF INCOME IN THE SUM OF RS.461.25 LACS, I.E., ON THE CONVERSION OF THE SAID UNITS INTO TAX-FREE BONDS BY THE UTI, THE ISSUER, AT A PER UNIT PRICE OF RS.12/- AS AGAINST T HE FACE VALUE (COST) OF RS.10/- PER UNIT. THE BASIS OF THE ASSESSEES CLAIM FOR THE LOSS, WHI CH STOOD BROUGHT OUT CLEARLY IN ITS COMPUTATION OF INCOME ACCOMPANYING THE RETURN, WAS THAT IT IS ONLY THE INCOME ARISING BY WAY OF DIVIDEND ON THE SAID UNITS THAT IS EXEMPT U/ S.10(33) OF THE ACT, AND NOT THE INCOME (OR LOSS) ARISING ON THEIR TRANSFER. THE SAME WAS F OUND NOT ACCEPTABLE IN VIEW OF THE PROVISION OF SECTION 10(33) OF THE ACT. THE ASSESSE E HAD, HE WOULD URGE FURTHER, CLAIMED ONLY A CARRY FORWARD OF THE SAID LOSS AS A PART OF THE TOTAL LOSS UNDER THE HEAD LONG TERM CAPITAL GAINS (LTCG) AT RS.643.14 LACS, AND NOT IT S SET OFF AGAINST ANY OTHER INCOME. THE ASSESSEES EXPLANATION WAS FOUND NOT ACCEPTABLE, SO THAT THE IMPUGNED PENALTY STOOD LEVIED INVOKING EXPLANATION 1 TO SECTION 271(1)(III) BY THE ASSESSING OFFICER (A .O.), RELYING ON THE DECISIONS IN THE CASE OF UNION OF INDIA V. DHARMENDRA TEXTILE PROCESSORS [2008] 306 ITR 277 (SC) AND K.P. MADHUSUDHANAN VS. CIT [2001] 251 ITR 99 (SC). THE SAME STOOD CONFIRMED IN APPEAL ON THE SAME BASIS. P LACING A COPY OF THE ORDER BY THE TRIBUNAL IN THE CASE OF NALIN P. SHAH & OTHRS. V. DY. CIT (IN ITA NOS.4780, 4781 AND 4783/MUM/2010 DATED 18.07.2012) ON RECORD, HE WOULD CONTINUE, THAT THE TRIBUNAL, IN SIMILAR CASES, BEING IN RESPECT OF THE ASSESSEES F AMILY MEMBERS, DELETED THE PENALTY. THE SAME HAS BEEN SINCE CONFIRMED BY THE HONBLE JURISD ICTIONAL HIGH COURT, HOLDING THAT THE FACTS OF THE CASE WERE COVERED BY THE DECISION BY T HE APEX COURT IN THE CASE OF CIT V. RELIANCE PETROPRODUCTS (P.) LTD . [2010] 322 ITR 158 (SC), PLACING A COPY OF THE O RDER BY THE HONBLE COURT (IN ITA (LOD) NOS.49,50 & 51 O F 2013 DATED 04.03.2013) ON RECORD, SO THAT THE MATTER SHOULD BE CONSIDERED AS CONCLUDED IN FAVOUR OF THE ASSESSEE- APPELLANTS AND AGAINST THE REVENUE. THE LD. DR DID NOT RAISE ANY OBJECTION TO OR REBUT ANY OF THE AVERMENTS MADE BY THE LD.AR. 3 ITA NO.4782/MUM/2010 (A.Y. 2004-05) PRAVIN SHAH TRUST VS. DY. CIT 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. 3.1 OUR FIRST OBSERVATION IN THE MATTER IS THAT THE STATEMENT/S MADE BY THE LD. AR AT BAR BEFORE US HAS BEEN FOUND BY US AS UNTRUE ON FACTS. THIS IS AS SECTION 10(33) OF THE ACT, WHICH READS AS UNDER, DOES NOT EXEMPT DIVIDEND INCO ME ON UNITS OF US-64, AS STATED, BUT ONLY THE INCOME ARISING ON THEIR TRANSFER, I.E., TH E VERY INCOME, ALBEIT IN THE NEGATIVE, THAT INURES TO THE ASSESSEE DURING THE YEAR, AND IN RESP ECT OF WHICH THE IMPUGNED LOSS STANDS CLAIMED BY IT: INCOMES NOT INCLUDED IN TOTAL INCOME. 10. IN COMPUTING THE TOTAL INCOME OF A PREVIOUS YEAR OF ANY PERSON, ANY INCOME FALLING WITHIN ANY OF THE FOLLOWING CLAUSES SHALL NOT BE IN CLUDED (1) AGRICULTURAL INCOME; (2 ) . (3 ) . (33) ANY INCOME ARISING FROM THE TRANSFER OF A CAPI TAL ASSET, BEING A UNIT OF THE UNIT SCHEME, 1964 REFERRED TO IN SCHEDULE I TO THE UNIT TRUST OF IND IA (TRANSFER OF UNDERTAKING AND REPEAL) ACT, 2002 (58 OF 2002) AND WHERE THE TRANSFER OF SUCH ASSET TAKES PLACE ON OR AFTER THE 1ST DAY OF APRIL, 2002; [EMPHASIS, SUPPLIED] THE LANGUAGE OF THE PROVISION IS PRECISE AND UNAMBI GUOUS. THERE IS, AS SUCH, NO SCOPE FOR AN ARGUMENT THAT A VIEW IN FAVOR OF THE ASSESSEES CLAIM COULD POSSIBLY BE TAKEN, OR GIVES RISE TO A DEBATABLE LEGAL ISSUE. 3.2 THE PREMISE OF THE DECISION IN THE CASE OF RELIANCE PETROPRODUCTS (P.) LTD . (SUPRA), IS THAT MERELY BECAUSE A WRONG CLAIM IS MA DE BY THE ASSESSEE, OR THAT THE LEGAL CLAIM MADE BY IT IS NOT ACCEPTED, THE SAME WOULD NO T AMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME, WHERE IN FACT ALL THE FACTS MATERIAL TO THE COMPUTATION OF THE INCOME AND RELEVANT TO THE LEGAL CLAIM BEING MADE S TAND FURNISHED PER THE RETURN, ESTABLISHING THE ASSESSEES BONA FIDES QUA ITS CLAIM. THE SAME WOULD HAVE NO APPLICATION IN OR COVER CASES WHERE NO LEGAL CLAIM AS BEING PRE SSED ARISES ON THE BASIS OF THE FACTS FURNISHED; IN FACT, STANDS NEGATED BY A PARTICULAR PROVISION OF LAW, AS IN THE INSTANT CASE. THAT IS, THE FACTS FURNISHED, ON WHICH THERE IS NO DISPUTE, CONTRADICT OR DISPROVE THE 4 ITA NO.4782/MUM/2010 (A.Y. 2004-05) PRAVIN SHAH TRUST VS. DY. CIT ASSESSEES CLAIM INASMUCH AS THE SAME STAND SQUAREL Y GOVERNED BY THE RELEVANT PROVISION . THERE IS THEREFORE NO BASIS FOR THE ASSESSEES LE GAL CLAIM, EVEN AS EXPLANATION 1 TO THE PROVISION WOULD ALSO STAND CLEARLY ATTRACTE D. FURNISHING OF A PLAUSIBLE EXPLANATION IN MAKING THE CLAIM, ESTABLISHING ITS BONA FIDES , WOULD THUS CONTINUE TO GOVERN THE LEVY OR OTHERWISE OF PENALTY UNDER SECTI ON 271(1)(C) IN THIS CASE AS IN ANY OTHER. THE INTERPRETATION OF THE PROVISION, INCLUDI NG EXPLANATION 1 THERETO, WHICH DEEMS, IN THE ABSENCE OF AN EXPLANATION FOR THE DEFAULT, C ONCEALMENT OR FURNISHING INACCURATE PARTICULARS OF INCOME, ATTRACTING PENALTY THEREUNDE R, HAS BEEN THE SUBJECT MATTER OF ELUCIDATION BY THE HONBLE COURTS, INCLUDING THE HO NBLE APEX COURT ITSELF, PER A NUMBER OF DECISIONS OVER THE YEARS, AS FOLLOWS, SO THAT THE C LAIM MUST REST ON SOME REASONABLE PREMISES OR BASIS, I.E., HAVE SOME BASIS TO IT: DHARMENDRA TEXTILE PROCESSORS AND ORS. (SUPRA); GULJAG INDUSTRIES V. CTO [2007] 293 ITR 584 (SC) ; K.P. MADHUSUDHANAN VS. CIT (SUPRA); B.A. BALASUBRAMANIAM AND BROS V. CIT (1999) 236 ITR 977 (SC); ADDL. CIT VS. JEEVAN LAL SHAH [1994] 205 ITR 244 (SC). THE APEX COURT HAS, PER ITS DECISION IN THE CASE OF RELIANCE PETROPRODUCTS (P.) LTD . (SUPRA), NOT SOUGHT TO REINVENT OR REWRITE THE LAW ON PENALTY OR EVEN REINTERPRET THE SAME, AND WHICH HAS THUS TO BE READ IN CONSISTENCE AND HA RMONY WITH THE SETTLED LAW IN THE MATTER, I.E., AS EMPHASIZING A PARTICULAR ASPECT OF THE MATTER, WHICH WAS THE SUBJECT MATTER OF THE LEVY IN THAT CASE. THAT IS, IS TO BE READ IN THE BACKGROUND AND CONTEXT OF THE FACT SITUATION OF THE CASE. THE SAID DECISION CANNOT BE UNDERSTOOD TO IMPLY A COMPLETE EXPOSITION OF THE LAW IN THE MATTER OR READ DE HORS THE SAME, I.E., AS EXPLAINED BY THE APEX COURT ITSELF PER A HOST OF DECISIONS CITED SUPRA. I N FACT, THE DECISION IN THE CASE OF RELIANCE PETROPRODUCTS (P.) LTD . (SUPRA) HAS RECEIVED INTERPRETATION AND EXPLANATI ON BY THE HIGHER COURTS OF LAW IN DIFFERENT FACT SITUATIONS, WHERE T HE SAME WAS SOUGHT TO BE APPLIED, SO THAT THIS ISSUE CAN NO LONGER BE CONSIDERED AS RES INTEGRA . IN CIT VS. ESCORTS FINANCE LTD . [2010] 328 ITR 44 (DEL), THE HONBLE COURT FOUND TH E ASSESSEES CLAIM U/S.35D, SAID TO BE BASED ON THE OPINION OF ITS CHARTERED ACCOUNTANT, A TAX EXPERT, AS WITHOUT BASIS IN VIEW OF THE CLEAR LANGUAGE OF THE PROVISION, EXTENDING THE BENEFIT OF THE SAID DEDUCTION TO AN INDUSTRIAL COMPANY, WHILE THE ASSESSEE-RESPONDENT W AS ADMITTEDLY A FINANCE COMPANY. 5 ITA NO.4782/MUM/2010 (A.Y. 2004-05) PRAVIN SHAH TRUST VS. DY. CIT WHERE THE CLAIM WAS EX FACIE BOGUS, IT COULD ATTRACT PENALTY, CLARIFYING THAT I T WAS NOT A CASE OF A WRONG CLAIM BUT OF A FALSE CLAIM. IN CIT VS. ZOOM COMMUNICATION (P.) LTD . [2010] 327 ITR 510 (DEL.), THE CLAIM WAS QUA INCOME-TAX, BARRED BY SECTION 40(A)(II), SO THAT THE PLEA OF OMISSION WAS CONSIDERED NOT ACCE PTABLE. IN CIT VS. USHA INTERNATIONAL LIMITED [2013] 214 TAXMANN.COM 519 (DEL), AGAIN, THE CLAIM WAS U/S.35CCA, WHICH WAS FOUND AS DE HORS ANY BASIS. IN VSB INVESTMENT (P.) LTD. VS. CIT [2013] 212 TAXMAN 59 (P&H) (MG.) [21 TAXMANN.COM 162], THE APPELLANT-ASS ESSEES INABILITY TO FURNISH ANY EXPLANATION IN SUPPORT OF ITS CLAIM FOR LOSS ON SAL E OF SHARES, WHICH WAS NOT ALLOWABLE IN VIEW OF S. 94(7), WAS CONFIRMED FOR LEVY OF PENALTY U/S.271(1)(C). PENALTY THERE-UNDER WAS ACCORDINGLY CONFIRMED, OR ITS DELETION REVERSED , AS THE CASE MAY BE, IN ALL THESE CASES BY THE HONBLE COURTS, CONFIRMING THUS THAT FURNISH ING OF A PLAUSIBLE EXPLANATION FOR THE DEFAULT CONTINUES TO BE THE BUILDING BLOCK OR AN ES SENTIAL INGREDIENT FOR SAVING LEVY PENALTY U/S. 271(1)(C) OF THE ACT, AND WOULD APPLY EVEN IN RESPECT OF LEGAL CLAIMS AND, FURTHER, EVEN AFTER THE DECISION IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD . (SUPRA), WHICH DECISION WAS CONSIDERED IN ALL THESE CASES. 3.3 COMING TO THE FACTS OF THE CASE, THE ASSESSEES EXPLANATION WAS, IN VIEW OF THE PROVISION OF S. 10(33), NOT WHAT THE LD. AR WOULD S TATE BEFORE US (REFER PARA 2), WHICH IS ITSELF DEPRECIABLE, BUT THAT SEC. 10(33) IS INAPPLI CABLE IN ITS CASE AS THE SAME REFERS ONLY TO INCOME WHILE THE ASSESSEE HAS ADMITTEDLY INCURRED A LOSS. IT IS THIS EXPLANATION, GIVEN IN RESPONSE TO THE SHOW CAUSE NOTICE U/S. 274, WHIC H IS RELEVANT, AND FORMS THE BASIS OF THE RESPECTIVE CASES OF THE PARTIES. THE SAID EXPL ANATION, IF IT MAY BE TERMED AS ONE, ONLY NEEDS TO BE STATED TO BE REJECTED. FIRSTLY, IT CLARIFIES, IF ANY SUCH WAS REQUIRED, THAT THERE IS NO AMBIGUITY IN THE PROVISION, AND STANDS ALSO UNDERSTOOD BY THE ASSESSEE IN THE SAME MANNER. ON THE MERITS OF THE EXPLANATION, WHAT, ONE MAY ASK, IS LOSS, IF NOT NEGATIVE INCOME ? HOW COULD IT (LOSS) HAVE A CHARACTER OTHER THAN THA T OF INCOME, BEING ONLY THE RESULT OF THE SAME COMPUTATION PROCESS WHICH YIELDS POSITIVE INCOME ? FURTHER, IF CONSTRUED TO BEAR A CHARACTER OR NATURE DIFFERENT FROM INCOME, HOW COULD THE SAME BE ADJUSTED OR SET OFF AGAINST INCOME ? IN FACT, IT IS ONLY ITS COMPUTATION THAT YIELDS A LOSS, 6 ITA NO.4782/MUM/2010 (A.Y. 2004-05) PRAVIN SHAH TRUST VS. DY. CIT AND WHICH (COMPUTATION) WOULD BECOME APPLICABLE OR NEED TO BE APPLIED ONLY FOR COMPUTING INCOME WHICH FORMS PART OF THE TOTAL (OR TAXABLE) INCOME; THE ASSESSEE APPARENTLY EARNING AN INCOME OF RS. 2/- PER UNIT. T HAT IS, AN INCOME EXEMPT U/C. III OF THE ACT, NOT FORMING PART OF THE TOTAL INCOME, WOULD NO T ENTER THE COMPUTATION PROCESS TO DETERMINE THE QUANTUM OF INCOME UNDER THE RELEVANT HEAD OF INCOME, EACH OF WHICH HAS ITS OWN COMPUTATION PROVISIONS. NEEDLESS TO ADD, TH E ASSESSEE DID NOT PREFER ANY APPEAL AGAINST THE NON-ACCEPTANCE OF ITS SO CALLED LEGAL C LAIM. THE EXPLANATION, IF IT COULD BE CONSIDERED AS ONE, IS FALSE . WE NEED NOT DWELL ANY FURTHER IN THE MATTER; THE SAME BEING BASIC AND INTEGRAL TO THE SCHEME OF THE ACT, AND PA RT OF THE WELL SETTLED LAW. REFERENCE IN THIS CONTEXT BE MADE TO THE DECISIONS, INTER ALIA , IN THE CASE OF CIT V. HARPRASAD & CO. (P.) LTD . [1975] 99 ITR 118 (SC) AND CIT V. GOLD COIN HEALTH FOODS (P.) LTD . [2008] 304 ITR 308 (SC), TO THE EFFECT THAT LOSS IS ONLY N EGATIVE INCOME, BEARING THE SAME CHARACTER, AND THAT THE DEFINITION OF INCOME IN S. 2(24) INCLUDES LOSS. IN FACT, PER THE FORMER DECISION, THE APEX COURT HAS CLARIFIED THAT THE ASSESSEE IS NOT OBLIGED TO DISCLOSE LOSS FROM A SOURCE OF INCOME IN ITS RETURN WHERE TH E INCOME FROM THAT SOURCE IS TAX EXEMPT, NOR THE ITO UNDER AN OBLIGATION TO COMPUTE OR ASSESS THE SAME . CONTINUING FURTHER, THE ASSESSEE HAS IN FACT NOWHER E STATED THE BASIS OF ITS CLAIM PER THE RETURN, WHICH ONLY STATES THE CAPITAL ASSET (S) ON WHICH INCOME CLAIMED AS LONG TERM CAPITAL LOSS, I.E., UNDER THE CHAPTER IV-E OF THE ACT, ARISES TO IT, AND THE MANNER OF ITS COMPUTATION. ALSO, THE ARGUMENT THAT WHAT IS SOUGHT IS ONLY A CARRY FORWARD AND NOT AN ACTUAL SET OFF OF LOSS, IS ALSO SHORN OF ALL LEGAL BASIS, AND EQUALLY WITHOUT MERIT. THE BROUGHT FORWARD OF ANY LOSS IS ONLY FOR ITS SUBSEQU ENT SET OFF, AND WHICH RIGHT INURES TO THE ASSESSEE ON ITS ASSESSMENT AND BEING ALLOWED CA RRY FORWARD IN ITS RESPECT, I.E., THE SAME RIGHT WHICH THE ASSESSEE CLAIMS PER ITS RETURN . THE ACTUAL SET OFF, BE IT IN THE YEAR OF CLAIM OR A SUBSEQUENT YEAR, IS OF LITTLE MOMENT. IN EITHER CASE, THE SAME FALLS SQUARELY WITHIN THE PURVIEW OF EXPLANATION 4 TO SECTION 271(1)(III). IN SUM, THE ASSESSEES CLAIM IS EX FACIE INADMISSIBLE, BEING CONTRARY TO THE CLEAR PROVISION OF LAW AND, FURTHER, WITHOUT ANY BASIS WH ATSOEVER. FAR FROM BEING DEBATABLE, IT QUALIFIES FOR BEING TERMED AS BASELESS AND FALSE. T HE ASSESSEE, THEREFORE, CAN CLEARLY BE 7 ITA NO.4782/MUM/2010 (A.Y. 2004-05) PRAVIN SHAH TRUST VS. DY. CIT CONSIDERED AS HAVING NOT FURNISHED ANY EXPLANATION WITHIN THE MEANING OF THE TERM, OR AS ONE WHICH IT COULD NOT SUBSTANTIATE, SO AS TO BE CO VERED BY EXPLANATION 1 TO S. 271(1)(III). 3.4 CONTINUING FURTHER, THE TRIBUNAL, PER A CO-ORDI NATE BENCH DECISION, HAS, HOWEVER, UNDER AN IDENTICAL SITUATION, STATED AS BEING IN RE SPECT OF THE ASSESSEES FAMILY MEMBERS, HELD SUCH CLAIM TO, IN VIEW OF DISCLOSURE OF PRIMAR Y FACTS, NOT WARRANT LEVY OF PENALTY IN LIGHT OF THE DECISION IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD . (SUPRA); ITS FINDINGS BEING AS UNDER: 7. AFTER HEARING THE RIVAL SUBMISSIONS AND PERUSING TH E MATERIAL AVAILABLE WE ARE OF THE OPINION THAT PENALTY LEVIED /UPHELD BY THE AO/FAA CANNOT BE ENDORSED. IN THE CASE UNDER CONSIDERATION ASSESSEE HAD DISCLOSED ALL THE DETAILS ABOUT SALE OF UNITS OF US 64. AO HA D GATHERED THE INFORMATION ABOUT THE SAID SALE AND LOSS/CARRY FORW ARD FROM THE RETURN FILED BY THE ASSESSEE. IN THESE CIRCUMSTANCES IN OUR OPI NION IT CANNOT BE HELD THAT THE ASSESSEE HAD FILED INACCURATE PARTICULARS OF HI S INCOME. WE ARE OF THE OPINION THAT A WRONG CLAIM MADE BY AN ASSESSEE IS N OT FILING OF INACCURATE PARTICULARS/ CONCEALING OF INCOME. NOW IT IS SETTLE D LAW THAT MAKING AN INCORRECT CLAIM DOES NOT TANTAMOUNT TO FURNISHING I NACCURATE PARTICULARS AND THAT TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN TH E RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TH E TRUTH OR ERRONEOUS. IN THE MATTER UNDER CONSIDERATION FACTS REVEAL THAT DE TAILS SUPPLIED BY THE ASSESSEE DID NOT FALL IN ANY OF THESE CATEGORIES. IN THESE CIRCUMSTANCES WE DELETE THE PENALTY LEVIED U/S. 271(1) (C) OF THE AC T. THE MERITS OF THE LEGAL PLEA, I.E., THAT S. 10(33) SPEAKS ONLY OF INCOME WHILE WHAT IT CLAIMS IS LOSS, WHICH IS THE ASSESSEES EXPLANATI ON ON FACTS; THE PROVISION OF LAW AS WELL AS WELL-SETTLED LAW BEING ONLY PROVEN FACTS, HAS NO T BEEN, AS APPARENT, DISCUSSED BY THE TRIBUNAL. THE BASIS OF THE DECISION BY THE TRIBUNAL WAS THE FACTUM OF THE ASSESSEE MAKING A LEGAL CLAIM COUPLED WITH THE DISCLOSURE OF THE PR IMARY FACTS, IN VIEW OF THE DECISION IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD . (SUPRA). THERE WAS HOWEVER NO REFERENCE TO PRECEDENTS, AS IN THE FORM OF DECISIONS BY THE HON BLE HIGH COURTS REFERRED TO SUPRA. 3.5 THE ISSUE WAS RAISED BY THE REVENUE BEFORE THE HONBLE JURISDICTIONAL HIGH COURT. THE ASSESSEES CLAIM BEING WITHOUT DOUBT A LEGAL CL AIM, THOUGH NOT SUSTAINABLE IN LAW, THE HONBLE COURT FOUND NOTHING AMISS IN THE DECISION B Y THE TRIBUNAL, SO THAT IN ITS VIEW IT HAD 8 ITA NO.4782/MUM/2010 (A.Y. 2004-05) PRAVIN SHAH TRUST VS. DY. CIT CORRECTLY APPLIED THE DECISION IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD . (SUPRA). IT DID NOT GO INTO THE MERITS OR THE MAINTAINABILITY O F THE LEGAL PLEA, OR THE EXPLANATION, IF ANY, OFFERED IN SUPPORT THEREOF, BEING MATTERS OF F ACT. GOING BY THE FINDINGS OF FACT BY THE TRIBUNAL, IT DECLINED TO ENTERTAIN THE QUESTION/S O F LAW RAISED BY THE REVENUE BEFORE IT; THE RELEVANT PART OF ITS DECISION READING AS UNDER: 6. ON FURTHER APPEAL, THE TRIBUNAL IN THE IMPUGNED ORDER HELD THAT THE RESPONDENT-ASSESSEE HAD IN ITS RETURN OF INCOME FIL ED A NOTE WITH ITS COMPUTATION OF INCOME DISCLOSING ALL DETAILS ABOUT THE SALE OF US 64 UNITS, THE LOSS AND RESULTANT CARRY FORWARD. FURTHER, ALL DETAILS WERE DISCLOSED IN ITS RETURN OF INCOME AS IS EVIDENT FROM THE FACT THAT T HE ASSESSING OFFICER GATHERED INFORMATION ABOUT THE CARRY FORWARD LOSS A ND SALE OF UNITS FROM RETURN FILED BY THE RESPONDENT-ASSESSEE. THE TRIBUN AL HELD THAT THE FROM THE AFORESAID FACTS AT THE HIGHEST IT CAN BE SAID THAT THE CLAIM OF THE ASSESSEE WAS NOT SUSTAINABLE IN LAW BUT THERE WAS NO FURNISH ING OF INACCURATE PARTICULARS OR CONCEALMENT OF INCOME ON THE PART OF THE RESPONDENT- ASSESSEE. THUS, THE PENALTY WAS SET ASIDE. WE FIND THAT THE SAME VIEW IS TAKEN BY THE APEX COURT IN THE MATTER OF CIT V/S. RELIANCE PETROPRODUCTS PVT. LTD. REPORTED IN [2010] 322 ITR 158 (SC). AS THE DECISION OF THE TRIBUNAL IS ESSENTIALLY BASED ON FINDING OF FACT, W E SEE NO REASON TO ENTERTAIN THE PROPOSED QUESTION OF LAW. UNDER THE CIRCUMSTANCES, THEREFORE, NO RATIO IN TE RMS OF AN INTERPRETATION OF THE PROVISION OF S. 271(1)(C) ARISES OUT OF THE ORDER B Y THE HONBLE COURT, SO AS TO BE CONSIDERED AS APPLICABLE ACROSS ALL SIMILAR SITUATI ONS. REFERENCE IN THIS CONTEXT IS MADE TO THE DECISION IN THE CASE OF SANDVIK ASIA LTD. VS. CIT [2004] 267 ITR 78 (BOM). THIS IS FOR THE SIMPLE REASON THAT HONBLE COURT DECIDED TH US ON THE BASIS OF, AS STATED THEREIN, THE FINDING OF FACT BY THE TRIBUNAL THAT UNDER THE FACT S AND CIRCUMSTANCES AT THE HIGHEST IT CAN BE SAID THAT THE ASSESSEES CLAIM IS NOT SUSTAINABL E IN LAW . IT IS FOR THIS REASON THAT THE HONBLE COURT DECLINED TO ADMIT AND ANSWER THE LARG ER QUESTIONS OF LAW PROPOSED BY THE REVENUE, RAISING LIKE ISSUES. SURELY, IF THE ASSESS EES CLAIM COULD BE CONSIDERED AS DEBATABLE, I.E., GIVING RISE TO A GENUINE DEBATE, T HE MERE FACT OF IT BEING NOT ACCEPTABLE, WOULD NOT MAKE IT SUSCEPTIBLE TO PENALTY, AND WHICH IS WITHOUT DOUBT THE RATIO OF THE DECISION IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD . (SUPRA). FURTHERMORE, THE 9 ITA NO.4782/MUM/2010 (A.Y. 2004-05) PRAVIN SHAH TRUST VS. DY. CIT DECISION BY THE HONBLE JURISDICTIONAL HIGH COURT C AN BY NO SCORE BE CONSIDERED AS HOLDING IN FAVOUR OF NON-LEVY OF PENALTY U/S. 271(1)(C) EVE N IN THE FACE OF ADMITTEDLY WRONG OR FALSE CLAIM/S, I.E., WHICH HAS NO BASIS IN FACT OR IN LAW OR BOTH; THE FACTS IN THE INSTANT CASE DISPROVING THE ASSESSEES LEGAL CLAIM. THE ISSUE THUS ESSENTIALLY BOILS DOWN TO THE FINDING OF FACT AS TO WHETHER THE CLAIM IS INDEED D EBATABLE, OR IS IT FRIVOLOUS. 3.6 AT THE SAME TIME, IT CANNOT BE DENIED THAT THE DECISION BY THE HONBLE HIGH COURT IN THE CASE OF NALIN P. SHAH & OTHRS . (SUPRA) IS RENDERED IN AN IDENTICAL FACT SITUATIO N, WHEREIN IT HAS BEEN HELD THAT THE IMPUGNED CLAIM IS NOT LIABLE TO BE VISITED WITH PENALTY U/S. 271(1)(C) AS THERE IS UNDER THE CIRCUMSTANCES NO FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE FACT SITUATION IN THE INSTANT CASE B EING IDENTICAL, WE ARE CONSTRAINED ON THE GROUND OF CONSISTENCY TO ADOPT THE SAME VIEW AS HAS FOUND APPROVAL BY THE HONBLE JURISDICTIONAL HIGH COURT. ACCORDINGLY, FOLLOWING T HE SAME, WE SET ASIDE THE LEVY OF THE IMPUGNED PENALTY. 4. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. 5 16 ' (51 0 !71 0 1 89 ORDER PRONOUNCED IN THE OPEN COURT ON JULY 05, 2013 4 0 3) :'6 05 , 2013 0 ? SD/- SD/- (VIJAY PAL RAO) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; :' DATED : 05.07.2013 !.'. ./ ROSHANI , SR. PS 10 ITA NO.4782/MUM/2010 (A.Y. 2004-05) PRAVIN SHAH TRUST VS. DY. CIT 4 0 -1' @')1 4 0 -1' @')1 4 0 -1' @')1 4 0 -1' @')1/ COPY OF THE ORDER FORWARDED TO : 1. *, / THE APPELLANT 2. -.*, / THE RESPONDENT 3. A ( ) / THE CIT(A) 4. A / CIT CONCERNED 5. '!D? -1' , , / DR, ITAT, MUMBAI 6. ?E( F / GUARD FILE 4' 4' 4' 4' / BY ORDER, G GG G/ // / 8 8 8 8 (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI