JCIT (OSD), New Delhi V. M/s. Super Cassettes Industries Ltd., Noida

ITA 4788/DEL/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69487 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 22-10-2013
• Assessment Year: 1999-2000
• Appeal Filed On: 02-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Keywords: Depreciation; Bonafide belief; Wrong claim; Condonation of delay; Revised return
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G: NEW DELHI) BEFORE SHRI RAJ PAL YADAV, JUDICIAL MEMBER AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO.4788/DEL/ 2011 (ASSESSMENT YEAR : 1999-00) JCIT(OSD) VS. SUPER CASSETTES INDUSTRIES LTD. CIRCLE-9(1), ROOM NO.163, PLOT NO.3 & 3A, FILM CIT Y C. R. BUILDING, SECTOR-16A NEW DELHI. NOIDA. PAN:AABCS4712P ASSESSEE BY : SHRI HIREN MEHTA, C.A, REVENUE BY :SMT. NIDHI SRIVASTAVA, SR.DR ORDER PER T.S. KAPOOR, AM: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-XII NEW DELHI DATED 31.05.2011 FOR THE ASSESSMENT YEAR 1999-2000. THE GROUNDS TAKE N BY THE REVENUE ARE AS UNDER: 1. THE LD. CIT (A) ERRED IN LAW AND ON THE FACTS A ND CIRCUMSTANCES OF THE CASE IN CANCELING THE PENALTY OF RS.29,99,293/- IMPOSED BY THE ASSESSING OFFICER U/S 271(1) (C). 2. THE APPELLANT CRAVES, TO AMEND MODIFY, ALTER, AD D OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE O R DURING THE HEARING OF THIS APPEAL. ITA NO.4788/DEL/2011 2 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSMENT IN THIS CASE WAS COMPLETED VIDE ORDER DATED 28.03.2002. THE ASSESSME NT WAS COMPLETED AFTER MAKING THE FOLLOWING ADDITIONS/ DISALLOWANCES (1) DISALLOWANCE OF BROUGHT FORWARD LOSSES OF M/S MANDAKINI AQUA MINERALS PVT. LTD. (2) ADDITION DUE TO UNDER VALUATION OF CLOSING WIP OF RS. 1,92,885/-. (3) DISALLOWANCE ON ACCOUNT OF EXCESS CLAIM OF DEDU CTION U/S 80HHC. (4) DISALLOWANCE OF PENALTY PAID IN PURSUANCE OF OR DER OF THE COMMISSIONER OF CENTRAL EXCISE. (5) DISALLOWANCE OF DEPRECIATION IN RESPECT OF FILM CITY AND C-35. 3. THE ASSESSING OFFICER ALSO INITIATED PENALTY PRO CEEDINGS U/S 271(1) (C) OF THE INCOME TAX ACT AND IMPOSED A PENALTY OF RS.29,99,293/- VIDE ORDER DATED 29.04.2010. 4. AGGRIEVED WITH THE ORDER THE ASSESSEE FILED APPE AL BEFORE LD. CIT (A) AND LD CIT (A) DELETED THE PENALTY IMPOSED BY ASSES SING OFFICER BY RECORDING HIS FINDINGS QUA EACH DISALLOWANCE/ADDITI ON. THE OPERATIVE PART OF FINDINGS OF LD. CIT (A) ARE REPRODUCED BELOW: BROUGHT FORWARD LOSSES OF M/S MANDAKINI AQUA MINE RALS PVT. LTD. 12. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPEL LANT AND THE PENALTY ORDER. ON THE BASIS OF FACTS BROUGHT ON RECORD IT IS EVIDENT THAT AT THE POINT OF FILING THE RETURN FOR A. Y. 1999-00, THE APPELLANT COMPANY I.E. SUPER CASSETTES INDUSTRI ES LTD. WAS ITA NO.4788/DEL/2011 3 ELIGIBLE TO CLAIM THE LOSSES OF THE AMALGAMATING CO MPANY I.E. MANDAKINI ACQUA MINERAL PVT. LTD. HOWEVER, BY THE T IME THE ASSESSMENT OF SUPER CASSETTES INDUSTRIES LTD. WAS T AKEN FOR SCRUTINY PROCEEDINGS IT HAD DISCONTINUED THE BUSINE SS OF BOTTLING OF MINERAL WATER DUE TO ECONOMIC REASONS. AS SUCH IT GOT DISENTITLED FOR SET OFF OF THE PAST LOSSES OF M ANDAKINI ACQUA MINERAL PVT. LTD. DUE TO RESTRICTIONS IMPOSED BY SE CTION 72A OF THE INCOME TAX ACT. HENCE, MERE DISALLOWANCE OF THI S LOSS OF RS.68,85,252/- BY ITSELF WOULD NOT LEAD T A CONCLUS ION OF CONCEALMENT. THE ATTENDANT FACTS AND CIRCUMSTANCES WOULD ALSO HAVE TO BE EXAMINED WHICH ARE CLEARLY IN FAVOUR OF THE APPELLANT. IN THE ABOVE CITED CASE RELIED UPON BY T HE APPELLANT VIS. CIT VS. RELIANCE PETRO PRODUCTS LTD. (SUPRA) I T HAS BEEN HELD BY THE APEX COURT THAT THERE IS A DIFFERENCE B ETWEEN A WRONG CLAIM AND A FALSE CLAIM. BASED ON THIS PROPOS ITION, IT IS THE SUBMISSION OF THE APPELLANT THAT THE CLAIM FOR LOSSES MADE IN THE RETURN WAS LATER ON TURNED OUT TO A WRONG CLAIM DUE TO DISCONTINUANCE OF LINE OF ACTIVITY, WHICH IS TRUE. HENCE, THE PENALTY FOR CONCEALMENT LEVIED ON THIS ACCOUNT IS H EREBY DELETED. IN THE RESULT THIS GROUND OF APPEAL IS ALL OWED. UNDER VALUATION OF CLOSING WIP OF RS. 1,92,885/-. 16. I HAVE CONSIDERED THE PENALTY ORDER AND THE SU BMISSIONS OF THE APPELLANT AND ALSO THE ABOVE RELIED ORDER OF THE ITAT. THE FINDINGS OF ITAT ON THIS ISSUE ARE THAT THE ADD ITION ENHANCING THE VALUE OF CLOSING WIP HAS BEEN MADE ON ESTIMATE BASIS. NEITHER ANY QUANTITY WAS FOUND IN EXCESS NOR WAS ANY RATE DIFFERENCE ON THE BASIS OF WHICH ADDITION HAS BEEN MADE TO WORK IN PROGRESS. THE WIP INDICATES THE VALUE ADDED IN THE RAW MATERIAL BY WAY OF ANY PROCESS UNDERTAKEN BY THE AS SESSEE. IT IS JUST ESTIMATION OF FURTHER EXPENDITURE PUT BY THE A SSESSEE AFTER PROCUREMENT OF RAW MATERIAL BEFORE CONVERTING THE S AME INTO FINISHED PRODUCT. ANY ADDITION MADE BY HAVING A DIF FERENCE ESTIMATION BEING UPHELD IN QUANTUM PROCEEDINGS WOUL D NOT ATTRACT LEVY OF PENALTY. CONSEQUENT UPON THE SAME, THE ISSUE RELATING TO IMPOSING OF PENALTY STANDS IN FAVOUR OF THE ASSESSEE. 17. RESPECTFULLY, FOLLOWING THE ORDER OF ITAT REFER RED ABOVE, ON THIS ISSUE, IT IS HELD THAT LEVY OF PENAL TY WITH RESPECT ITA NO.4788/DEL/2011 4 TO UNDER VALUATION OF CLOSING WIP IS COVERED BY THE DECISION OF ITAT AND HENCE PENALTY IS REQUIRED TO BE DELETED. T HIS GROUND OF APPEAL IS THEREFORE ALLOWED. DISALLOWANCE ON ACCOUNT OF EXCESS CLAIM OF DEDUCTIO N 80HHC. 26. IDENTICAL ISSUE INVOLVING LEVY OF PENALTY HAD C ROPPED UP IN APPELLANTS OWN CASE FOR A. Y. 2000-01, 2001-02 AND 2004- 05. THE RELEVANT PORTION OF MY PREDECESSORS ORDER ON THIS ISSUE READS AS UNDER: 5.5 THE SUBMISSION GIVEN BY THE APPELLANT HAS BEEN CONSIDERED AND IT IS OBSERVED THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER WAS MODIFIED BY THE CIT (A) AND T HE HONBLE ITAT HAD ALSO GIVEN THE DIRECTION TO RE-COM PUTE THE DEDUCTION U/S 80HHC. THUS, CONSIDERING THE FACT OF THE CASE AND THE ITEMS WHICH WERE TO BE EXCLUDED FOR THE PUR POSES OF CALCULATING DEDUCTION U/S 80HHC, THE HONBLE ITAT A LSO RELIED ON THE DECISION OF CIT VS. K RAVINDERNATHAN NAIR 29 5 ITR 228. IN THE AFOREMENTIONED JUDGMENT, THE HONBLE SUPREME COURT HAD REVERSED THE FINDING OF THE HIGH COURT AS WELL AS THE HONBLE ITAT BY DECIDING THE ISSUE IN FAVOUR OF THE REVENUE. THUS, TILL THE STAGE OF HIGH COURT THE DECISION WAS IN FAVOUR OF THE APPELLANT, WHICH GOES TO SHOW THAT THIS WAS A D EBATABLE ISSUE. 5.6 SIMILARLY, COMING TO THE ISSUE OF SALE OF SCRAP THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS SHI VA DISTILLERIES (MAD) 293 ITR 108 HAS HELD THAT PROFIT FROM SALE OF SCRAP AND WASTE MATERIAL IS TO BE EXCLUDED FROM PRO FITS OF THE BUSINESS UNDER CL. (BAA) TO SEC.80HHC. THIS AGAIN G OES TO SHOW THAT ISSUE REGARDING SALE OF SCRAP WAS A DISPUTE IS SUE AND SINCE THE DEPARTMENT HAD GONE IN APPEAL BEFORE THE HONBL E HIGH COURT, IT IS IMPLIED THAT THE TRIBUNAL HAD GIVEN TH E DECISION IN FAVOUR OF THE APPELLANT. IN FACT THE AMOUNTS WHICH GO TO CONSTITUTE THE NUMERATOR AS WELL AS THE DENOMINATOR HAVE REMAINED A MATTER OF CONFLICT BETWEEN THE DEPARTMEN T AND THE ASSESSEE AND THE SAME HAS BEEN RESOLVED THROUGH DIF FERENT JUDICIAL PRONOUNCEMENTS. THUS, A DIFFERENT STAND TA KEN BY THE APPELLANT FOR COMPUTING THE DEDUCTION U/S 80HHC CAN NOT ITA NO.4788/DEL/2011 5 AMOUNT TO CONCEALMENT OF INCOME OR FURNISHING INACC URATE PARTICULARS OF INCOME. THUS, THIS ISSUE IS ALSO DEC IDED IN FAVOUR OF THE APPELLANT AND THE PENALTY OF RS.1,01,463/- I MPOSED U/S271(1) (C) IS HEREBY CANCELLED. 27. I AM IN AGREEMENT WITH THE ABOVE REPRODUCED FIN DINGS AND RESPECTFULLY FOLLOWING THE SAME PENALTY LEVIED ON PART DISALLOWANCE OF DEDUCTION U/S 80HHC IS HEREBY DELET ED. IN THE RESULT THIS GROUND OF APPEAL IS ALLOWED. PENALTY PAID IN PURSUANCE OF ORDER OF THE COMMISSIO NER OF CENTRAL EXCISE RS.2,50,000/-. I HAVE CONSIDERED THE PENALTY ORDER AND THE SUBMIS SIONS OF THE APPELLANT ON THIS ISSUE. THE QUESTION REGARDING ALL OWABILITY OF EXPENDITURE TOWARDS EXCISE DUTY DEMANDS DEPOSITED U NDER THE KAR VIVAD SAMADHAN SCHEME IS A DEBATABLE ISSUE. THI S IS SUBSTANTIATED BY THE FACT THAT THE QUANTUM OF DISAL LOWANCE WAS REDUCED BY THE CIT (A) FROM RS.3 LACS TO RS.2.50 LA CS IN APPEAL. THIS ACTION HAS BEEN FURTHER UPHELD BY THE ITAT. IT IS A WELL ACCEPTED PROPOSITION THAT MERE SUSTENANCE OF A DDITION IN QUANTUM PROCEEDINGS CANNOT IPSO FACTO LEAD TO LEVY OF PENALTY FOR CONCEALMENT. THE ASSESSING OFFICER APART FROM R ELYING UPON THE QUANTUM PROCEEDINGS HAS NOT BROUGHT ON RECORD A NY MATERIAL TO SHOW THAT THERE WAS A WILLFUL ATTEMPT O N THE PART OF THE APPELLANT TO REDUCE ITS TAX LIABILITY. IT IS RA THER A CASE OF DEBATABLE ISSUE WHERE MORE THAN ONE VIEW IS POSSIBL E ON THE ALLOWABILITY OF EXPENDITURE. THE RATIO LAID DOWN BY THE APEX COURT IN THE CASE CIT VS. RELIANCE PETRO PRODUCTS L TD. (SUPRA) WOULD THEREFORE BE APPLICABLE IN THIS CASE. HENCE T HE PENALTY LEVIED ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE OF RS.2.50 LACS IS HEREBY DELETED. IN THE RESULT THIS GROUND O F APPEAL STANDS ALLOWED. DEPRECIATION IN RESPECT OF FILM CITY 37. I HAVE CONSIDERED THE PENALTY ORDER AND THE SUB MISSIONS OF THE APPELLANT ON THIS ISSUE. FROM THE FACTS BROU GHT ON RECORD IT EMERGES THAT THE CLAIM FOR HIGHER RATE OF DEPREC IATION @ 25% ON STUDIO BUILDING AS AGAINST THE RATE OF 10% PROVI DED IN THE I. ITA NO.4788/DEL/2011 6 T. RULES WAS BASED UPON THE JUDICIAL DECISIONS OF V ARIOUS HIGH COURTS WHICH WERE IN FAVOUR OF THE ASSESSEE. AS IT TURNED OUT THE SUPREME COURT LATER ON REVERSED THESE ORDERS BY HOLDING THAT DEPRECIATION ON THEATRE BUILDING AND OTHER SUC H BUILDINGS HAD TO BE ALLOWED ONLY AT THE RATE PRESCRIBED IN TH E I. T. RULES I.E.10%. THUS THE ISSUE REGARDING ELIGIBLE RATE OF DEPRECIATION ON STUDIO BUILDING IS A DEBATABLE ISSUE A REMAINED CONTENTIOUS TILL IT WAS FINALLY SETTLED BY THE SUPREME COURT. T HE ACTION OF THE APPELLANT IN CLAIMING HIGHER RATE OF DEPRECIATI ON BASED UPON JUDICIAL DECISIONS OF VARIOUS HIGH COURTS CANNOT TH EREFORE BE TERMED AS CONCEALMENT. ACCORDINGLY, PENALTY ON THIS GROUND IS DELETED. 5. AGGRIEVED WITH THE DELETION OF PENALTY THE REVEN UE IS IN APPEAL BEFORE US. AT THE OUTSET THE LD. DEPARTMENTAL REPRESENTATI VE SUBMITTED THAT THERE IS A DELAY OF 48 DAYS IN FILING OF THE APPEAL AND INVI TED OUR ATTENTION TO PETITION FILED BY REVENUE FOR CONDONATION OF DELAY PLACED IN FILE AND IT WAS PRAYED THAT SINCE THE DELAY HAS OCCURRED DUE TO INADVERTEN T LACK OF COMMUNICATION AND APPEAL INVOLVES SIGNIFICANT TAX IMPLICATION, TH EREFORE, DELAY MAY BE CONDONED. 6. THE LD. AR HAD NO OBJECTION IN CONDONATION OF DE LAY. ON MERITS THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT 5 AD DITIONS WERE MADE BY ASSESSING OFFICER WHICH WERE NOT CONTESTED BY ASSES SEE AND, THEREFORE, THEY HAD BECOME FINAL AND, THEREFORE, PENALTY IMPOSED BY ASSESSING OFFICER WAS WRONGLY DELETED BY LD. CIT (A). 7. THE LD. AR ON THE OTHER HAND SUBMITTED THAT PEN ALTY FOR SIMILAR ADDITIONS IN EARLIER YEARS ON ACCOUNT OF ADDITION A T SERIAL NO.2 AND 3 WERE ITA NO.4788/DEL/2011 7 DELETED BY HONBLE ITAT IN THE CASE OF ASSESSEE ITS ELF AND OUR ATTENTION WAS INVITED TO ITAT ORDER FOR ASSESSMENT YEAR 1997-98 A ND 1998-99 IN ITA NOS. 4893 AND 4894 PRONOUNCED ON 23.03.2012 AND OUR SPE CIFIC ATTENTION WAS INVITED TO PAGE NO.3,6,9,11 AND 15. IT WAS ARGUED THAT THE HONBLE ITAT HAD DELETED THE PENALTY U/S 271 (1) (C) IN THOSE YEARS IMPOSED UNDER SIMILAR CIRCUMSTANCES AND SINCE THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE REMAIN SAME, THE PENALTY IMPOSED ON ACCOUNT OF THES E TWO ADDITIONS WERE COVERED IN FAVOUR OF THE ASSESSEE. 8. REGARDING PENALTY IMPOSED ON ACCOUNT OF BROUGHT FORWARD LOSSES OF MANDAKINI ACQUA MINERAL PVT. LTD., IT WAS ARGUED TH AT THE SAID COMPANY WAS MERGED WITH THE ASSESSEE COMPANY W.E.F. 1 ST APRIL, 1998 AND AS PER PROVISIONS OF SECTION 72A THE BROUGHT FORWARD LOSSE S TO THE EXTENT OF RS.68,85,252/- WERE SET OFF AGAINST THE ASSESSEES INCOME FOR A. Y. 1999- 2000. IT WAS FURTHER SUBMITTED THAT HOWEVER THE BUS INESS OF MANUFACTURE AND SALE OF MINERAL WATER AS DONE BY AMALGAMATING COMPA NY WAS DISCONTINUED W.E.F. 30.06.2001 AND, THEREFORE, THE CONDITIONS FO R CARRYING AND SETTING OFF LOSS U/S 72A WERE VIOLATED HOWEVER SINCE THE RETURN WAS ALREADY FILED AND THE DATE OF FILING REVISED RETURN HAD ALSO EXPIRED THEREFORE, THERE WAS NO OPTION LEFT WITH THE ASSESSEE FOR REVISING THE SAME BUT WHEN ASSESSING OFFICER ENQUIRED ABOUT THIS CARRIED FORWARD LOSS TH E SAME WAS IMMEDIATELY ITA NO.4788/DEL/2011 8 SURRENDERED. HOWEVER THERE WAS NO FILING OF INACCUR ATE PARTICULARS AS COMPLETE PARTICULARS WERE FILED AT THE TIME OF FILI NG OF RETURN. THE ASSESSEE WAS UNDER BONAFIDE BELIEF THAT IT WILL CONTINUE TO CARRY ON THE BUSINESS OF AMALGAMATING COMPANY FOR A PERIOD OF FIVE YEARS AND , THEREFORE, HAD CLAIMED THE LOSS OF AMALGAMATING COMPANY. AT THE TI ME OF FILING OF RETURN IT WAS NOT KNOWN THAT ASSESSEE WILL DISCONTINUE ITS BU SINESS. THEREFORE, IT WAS ARGUED THAT IT WAS NOT FALSE CLAIM AND LD. COMMISSI ONER OF INCOME TAX (APPEALS) HAD RIGHTLY DELETED THE PENALTY ALTER REL YING UPON THE CASE LAW OF CIT VS. RELIANCE PETRO PRODUCTS LTD. (SUPRA) DECIDE D BY HONBLE SUPREME COURT. 9. AS REGARDS PENALTY IMPOSED BY COMMISSIONER OF CE NTRAL EXCISE, IT WAS SUBMITTED THAT LD. CIT (A) HAD REDUCED THE ADDI TION FROM RS.3 LACS TO RS.2.5 LACS AND, THEREFORE, IT WAS A DEBATABLE ISSU E AND WHERE MORE THAN ONE VIEW WAS POSSIBLE THE PENALTY U/S 271(1) (C) CANNOT BE IMPOSED AND, THEREFORE, LD. CIT (A) HAD RIGHTLY DELETED THE PENA LTY ON THIS ACCOUNT ALSO. AS REGARDS PENALTY DUE TO EXCESSIVE CLAIM OF DEPREC IATION, IT WAS ARGUED THAT ASSESSEE HAD CLAIMED DEPRECIATION @ 25% ON STUDIO B UILDINGS ON THE BASIS OF DECISION OF MADRAS HIGH COURT IN THE CASE OF A. V. MEVYYAPPA CHETTIAR AND THE DECISION OF FULL BENCH OF KERLA HIGH COURT IN THE CASE OF ANAND ITA NO.4788/DEL/2011 9 THEATERS WHICH REMAINED IN FAVOUR OF ASSESSEE TILL 12.05.2000 WHEN HONBLE SUPREME COURT REVERSED THE SAME. IT WAS FURTHER ARG UED THAT ASSESSEE HAD FILED RETURN OF INCOME ON 31.12.1999 WITH A BONAFID E BELIEF THAT IT WAS ELIGIBLE FOR DEPRECIATION @ 25%. 10. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH TH E PARTIES AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. FIRST OF ALL DELAY IN FILING THE APPEAL IS CONDONED. WE FIND THAT PENALTY WAS IMPOSED DUE TO F IVE ADDITIONS OUT OF WHICH TWO ADDITIONS ON SIMILAR GROUNDS WERE MADE BY ASSESSING OFFICER IN A. Y. 1997-98 AND 1998-99. IN RESPECT OF THESE TWO ADDITIONS ITAT IN ITA NOS. 4983 AND 4984 HAD DELETED THE PENALTY IMPOSED BY ASSESSING OFFICER BY RELYING UPON THE EARLIER DECISION OF TRIBUNAL UN DER SIMILAR CIRCUMSTANCES. THE CONCLUDING FINDINGS ARE CONTAINED AT PARA 5.1 A ND PARA 12.4 OF THE SAID ORDER. OUT OF TWO ONE ADDITION WAS EXACTLY ON SIMIL AR GROUNDS I.E ADDITION ON ACCOUNT OF UNDER VALUATION OF WORK-IN-PROGRESS WHER EAS THE OTHER ADDITION WAS SOMEWHAT DIFFERENT AS IN THE A. Y. 1997-98 AND 1998-99, THE ADDITION WAS ON ACCOUNT OF CALCULATION OF EXEMPTION U/S 80 ( 1) (A) WHEREAS IN THE PRESENT CASE IT IS U/S 80HHC. HOWEVER THE PRINCIPLE IN BOTH YEARS REMAINS SAME I.E THE PENALITY FOR CONCEALMENT OF INCOME CAN NOT BE MADE WHERE THERE IS DIFFERENCE IN CALCULATION OF AN EXEMPTION AS CLA IMED BY ASSESSEE AND AS ITA NO.4788/DEL/2011 10 ALLOWED BY ASSESSING OFFICER DUE TO DIFFERENCE IN O PINION IN RESPECT OF VARIOUS HEADS OF EXPENSES AND INCOME RELATING TO EX PORT OR NON EXPORT INCOME. THEREFORE RELYING UPON EARLIER YEARS TRIBUN ALS ORDER IN THE CASE OF ASSESSEE ITSELF, IN RESPECT OF THESE TWO ADDITIONS, THE PENALTY IS NOT IMPOSABLE. 11. AS REGARDS DEPRECIATION ON FILM CITY, WE FIND T HAT ASSESSEE HAD CLAIMED DEPRECIATION @ 25% ON STUDIO BUILDING ON TH E BASIS OF DECISION OF M. P. HIGH COURT IN THE CASE OF A. V. MEVYYAPPA CHE TTIAR. UP TO THE DATE OF FILING OF RETURN THAT IS ON 31.12.1999 THE DECISION OF THE CASE REMAINED IN FAVOUR OF ASSESSEE. HOWEVER, THE HONBLE SUPREME CO URT REVERSED THE DECISION VIDE ITS ORDER DATED 12.05.2000 THEREFORE , AT THE TIME OF FILING OF RETURN OF INCOME, THE ASSESSEE WAS UNDER BONAFIDE B ELIEF THAT IT WAS ELIGIBLE FOR DEPRECIATION @ 25% AND HENCE THERE WAS NO FURNI SHING OF INACCURATE PARTICULARS. SIMILARLY PENALTY IMPOSED ON ACCOUNT O F DISALLOWANCE OF CARRY FORWARD LOSS OF AMALGAMATING COMPANY WAS NOT JUSTIF IED AS AT THE TIME OF FILING OF RETURN, THE ASSESSEE WAS UNDER A BONAFIDE BELIEF THAT IT WILL CONTINUE TO CARRY ON THE BUSINESS OF AMALGAMATING COMPANY. THE PENALTY IMPOSED ON ACCOUNT OF ADDITION OF PENALTY AMOUNT IS ALSO NOT J USTIFIED AS THE ADDITION WAS DEBATABLE AS IS APPARENT FROM THE ORDER OF LD. CIT (A) IN RESPECT OF ITA NO.4788/DEL/2011 11 QUANTUM ADDITIONS WHEREIN HE HAD REDUCED THE DISALL OWANCE FROM RS. 3 LACS TO RS. 2.50 LACS. IN VIEW OF THE ABOVE FACTS AND C IRCUMSTANCES WE FIND THAT LD. CIT (A) HAS CORRECTLY DELETED THE PENALTY AND W E DO NOT INTEND TO INTERFERE WITH IT. IN VIEW OF THE ABOVE, APPEAL FILED BY REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 8 TH /11/ 2013 SD/- SD/- (RAJ PAL YADAV) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 8 TH DAY OF NOVEMBER, 2013 S.SINHA COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT(ITAT), NEW DELHI. AR,ITAT NEW DELHI.