M/s Shrimal Construction Pvt. Ltd, Jabalpur V. A.C.I.T 1(1), Jabalpur

ITA 51/JAB/2013

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1046 (ITAT-JABALPUR)
• Duration Of Justice: 6 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-05-2019
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 05-02-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 05-04-2013
• Court: TRIBUNAL
• Assessee Lawyers: D R LAKHORIYA
• Keywords: Question of law; Difference of opinion; Tax effect
• Section: 271(1)(c); 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, JABALPUR BENCH, JABALPUR BEFORE SHRI D.T. GARASIA, J.M. AND SHRI B.C.MEENA, A.M. I.T.A.NO. 51/JAB/2013 A.Y. : 2006-07 M/S. SHRIMAL CONSTRUCTION PVT.LTD., 191, KOTWALI WARD HANUMANTAL, JABALPUR VS CIT - I JABALPUR APPELLANT RESPONDENT PAN NO. : AAGCS3760G APPELLANT BY : SHRI SUMIT NEMA, ADV. ASSESSEE BY : SHRI D.R. LAKHORIYA, DR DATE OF HEARING : 20.05.2015 DATE OF PRONOUNCEMENT : 31.07.2015 -: 2: - 2 O R D E R PER GARASIA, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), JABALPUR, DATED 05.10.2012 FOR THE ASSES SMENT YEAR 2006-07. 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 2007-08, IT HAS COME TO THE NOTICE THAT THE ASSESSEE HAS CREDITED JOB WORK CHARGES OF RS. 1,06, 33,849/- ON THE FIRST DAY OF THE ACCOUNTING PERIOD 2006-07, BUT THE RECEIPT WAS ACCOUNTED IN THE SUBSEQUENT YEAR. THE A O HAS MADE THE ADDITION OF RS. 1,06,33,849/- ON ACCOUNT O F JOB WORK RECEIPT AND PENALTY HAS BEEN CALCULATED AND PENALTY HAS BEEN LEVIED U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. 3. THE MATTER CARRIED TO LD. CIT(A). THE LD. CIT(A) CONFIRMED THE ORDER. 4. THE LD. AUTHORIZED REPRESENTATIVE HAS SUBMITTED THA T THE INCOME WAS DULY REFLECTED AS PER THE MERCANTILE SYSTEM OF ACCOUNTING AND THE ACCOUNTING YEAR BEING FOLLOWED A S PER THE -: 3: - 3 TERMS OF CONTRACT. THE AO HAS SHOWN INCOME IN ASSES SMENT YEAR 2007-08 AS ASSESSABLE IN ASSESSMENT YEAR 2006- 07. THIS IS NOT THE CASE OF ANY CONCEALMENT OR FILING INACCU RATE PARTICULARS OF INCOME. THIS IS A DEBATE AS TO IN WH ICH YEAR THE INCOME WILL BE TAXED. THUS, THE INCOME HAS ALREADY BEEN TAXED IN ASSESSMENT YEAR 2007-08 AS OFFERED BY THE ASSESS EE ITSELF. THE AO IS OF THE OPINION THAT IT SHOULD BE TAXED IN THE ASSESSMENT YEAR 2006-07. IF THE VERSION OF THE AO I S ACCEPTED EVEN THOUGH THERE WOULD BE CORRESPONDING REFUND IN ASSESSMENT YEAR 2007-08, WHERE THE INCOME HAS ALREA DY BEEN OFFERED. THIS IS ONLY CASE OF DIFFERENCE OF OPINION BETWEEN THE AO AND THE ASSESSEE REGARDING POINT OF ACCRUAL OF I NCOME. 5. THE LD. AUTHORIZED REPRESENTATIVE RELIED UPON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CI T VS. EXCEL INDUSTRIES, (2013) 358 ITR 295 (S. C.). 6. THE LD. D.R. RELIED UPON THE DECISION OF RELIANCE PETRO PRODUCTS PVT. LTD. (2010) 11 SCC 782 (SC). 7. THE LD. AUTHORIZED REPRESENTATIVE FURTHER FILED THE WRITTEN SUBMISSION WHICH READS AS UNDER :- -: 4: - 4 2 . THE INCOME WAS BONA FIDE DISCLOSED BY THE APPELLANT IN THE NEXT AY AS PER THE TERMS OF CONTRACT WHEN IT ACCRUED AND THIS CANNOT BE TERMED AS FILING OF INACCURATE PARTICULARS OF INCOME AND THERE IS NO LOSS OF ANY TAX AND ON A DEBATABLE QUESTION WHICH IS TAX NEUTRAL NO PENALTY CAN BE IMPOSED. 2.1 ASSESSEE MAY BE OR MAY NOT BE WAS WRONG IN NOT OFFERING THE INCOME IN AY 2006-07 INSTEAD OF AY 2007-08.. BUT, IT DOES NOT FOLLOW THAT PENALTY FOR CONCEALMENT MUST BE IMPOSED EVEN IF THE QUANTUM APPEAL IS DECIDED AGAINST THE ASSESSEE. THE FINDINGS IN THE ASSESSMENT PROCEEDINGS CANNOT BE CONSIDERED AS CONCLUSIVE AND FINAL FOR THE PURPOSE OF IMPOSITION OF PENALTY UNDER SECTION 271(I)(C) OF THE ACT. AS PER OPINION EXPRESSED BY THE SUPREME COURT IN COMMISSIONER OF INCOME TAX, WEST -: 5: - 5 BENGAL I, AND ANR. VS. ANWAR ALI [1970] 76 ITR 696 (SC) SUCH FINDINGS MAY CONSTITUTE GOOD EVIDENCE IN THE PENALTY PROCEEDINGS BUT IT DOES NOT FOLLOW THAT PENALTY FOR CONCEALMENT UNDER SECTION 27I(I)(C) IS MANDATORY WHENEVER AN ADDITION OR DISALLOWANCE IS MADE. THE LANGUAGE OF SECTION 27I(I)(C) HAS UNDERGONE SUBSTANTIAL CHANGES SINCE THE PRONOUNCEMENT OF THE AFOREMENTIONED JUDGMENT, BUT THE SAID LEGAL POSITION, STILL HOLD GOOD. IN ASSESSMENT AO IS PRIMARILY CONCERNED WITH THE ASSESSMENT OF INCOME I.E. QUANTIFICATION AND COMPUTATION OF TOTAL INCOME AS PER THE PROVISIONS OF THE ACT, WHEREAS IN PENALTY PROCEEDINGS AO IS PRIMARILY CONCERNED WITH THE CONDUCT OF THE ASSESSEE. PENALTY IS IMPOSED NOT BECAUSE ADDITION IS MADE BUT BECAUSE THERE IS CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS BY THE ASSESSEE. THIS IS APPARENT FROM LANGUAGE OF SECTION 27I(I)(C) AND EXPLANATION 1 WHICH ARE REPRODUCED BELOW:- -: 6: - 6 271. FAILURE TO FURNISH RETURNS, COMPLY WITH NOTICES, CONCEALMENT OF INCOME, ETC.- -(1) IF THE ASSESSING OFFICER OR THE DEPUTY COMMISSIONER (APPEALS) OR THE COMMISSIONER (APPEALS) IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON XXXXXXXXXXX (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, XXXXXXXXXXXXXX EXPLANATION 1.WHERE IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT, (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE DEPUTY COMMISSIONER (APPEALS) OR THE COMMISSIONER (APPEALS) TO BE FALSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE -: 7: - 7 COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE PURPOSES OF CLAUSE (C) OF THIS SUB-SECTION, BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. 2.2 THE PRESENT CASE IS OBVIOUSLY NOT OF CONCEALMENT OF INCOME, AS THE ENTIRE RECEIPT WAS NOT DECLARED AND ACCOUNTED FOR IN THE RETURN OF INCOME OF THE NEXT ASSESSMENT YEAR. RATHER, IT WAS DECLARED IN THE RETURNS OF THE SUBSEQUENT ASSESSMENT YEAR. 2.3 AS PER CLAUSE (A) TO EXPLANATION 1 TO SECTION 27I(I)(C), PENALTY IS TO BE IMPOSED IF AN ASSESSEE FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER TO BE FALSE. CLAUSE (B) TO EXPLANATION 1 PROVIDES THAT WHERE THE ASSESSEE OFFERED AN EXPLANATION, BUT THE SAME REMAINED UNSUBSTANTIATED, PENALTY SHOULD NOT BE IMPOSED -: 8: - 8 IF THE EXPLANATION IS BONAFIDE AND ALL FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED. EXPLANATION 1 IS AN IMPORTANT ADJUNCT AND SUPPLEMENT TO SECTION 27I(I)(C) OF THE ACT. IT NOT ONLY ENACTS AND GIVES DEEMING EFFECT WHEN AN ADDITION OR DISALLOWANCE IS MADE IN THE ASSESSMENT/QUANTUM PROCEEDINGS, BUT ALSO CARVES OUT AN EXCEPTION IN CLAUSE (B) AS TO WHEN PENALTY SHOULD NOT BE LEVIED. ONUS UNDER CLAUSE (B) TO EXPLANATION 1 IS ON THE ASSESSEE. 2.4 IN CLAUSE (A). WHERE NO EXPLANATION IS OFFERED OR THE EXPLANATION IS FOUND TO BE FALSE, THEN IN VIEW OF THE CONDUCT OF THE ASSESSEE, PENALTY HAS TO BE IMPOSED IN TERMS OF CLAUSE (A) TO EXPLANATION 1 TO SECTION 27I(I)(C). IN THE PRESENT CASE, CLAUSE (A) TO THE EXPLANATION 1 WOULD NOT APPLY AS THE ASSESSEE HAD OFFERED AN EXPLANATION AND IT CANNOT BE SAID THAT THE EXPLANATION WAS FOUND TO BE FALSE. FALSITY IN THE CONTEXT OF THE PROVISION -: 9: - 9 WOULD REFER TO A WRONG AND UNTRUTHFUL ASSERTION OF A FACT. IT WOULD COVER CASES WHERE THE ASSESSEE HAS LIED AND NOT SPOKEN THE TRUTH OF A FACT KNOWN TO HIM. IT WOULD NOT COVER CASES INVOLVING WRONG INTERPRETATION OF A LEGAL POSITION/PROVISION OR WHEN THE FACT AS ASSERTED WAS NOT FACTUALLY WRONG AND, THEREFORE NOT FALSE, BUT DUE TO LEGAL CONSEQUENCES, ADDITION OR DISALLOWANCE STANDS MADE. 2.5 CLAUSE (B) OF EXPLANATION 1, APPLIES WHEN AN ASSESSEE OFFER AN EXPLANATION BUT IT HAS NOT BEEN ABLE TO SUBSTANTIATE IT. IN THE PRESENT CASE, THE ASSESSEE HAD OFFERED AN EXPLANATION AND MADE SUBMISSION AS TO WHY THE RECEIPT SHOULD BE TAXED IN THE NEXT YEAR. 2.6 THE QUESTION WILL REMAIN WHETHER EXPLANATION OFFERE D BY THE ASSESSEE WAS BONAFIDE AND ALL FACTS RELATING TO THE SAME AND MATERIAL TO COMPUTATION OF TOTAL INCOME HAD BEEN DISCLOSED. -: 10: - 10 AS FAR AS LATTER PART IS CONCERNED, IT CANNOT BE DOUBTED OR EVEN QUESTIONED THAT THE APPELLANT ASSESSEE HAD DISCLOSED OR STATED ALL FACTS RELATING TO THE EXPLANATION AND MATERIAL FOR THE COMPUTATION OF THEIR TOTAL INCOME. THE QUANTUM OF RECEIPT AS MENTIONED BY THE APPELLANT ASSESSEE HAS NOT BEEN DOUBTED. AGREEMENT WAS NOT CONCEALED AND IT IS NOT CASE OF THE REVENUE THAT ANY UNDISCLOSED INCOME WAS RECEIVED. FURTHER, THE AMOUNT RECEIVED HAS BEEN SHOWN AS TAXABLE IN THE RETURNS FILED FOR THE NEXT ASSESSMENT YEAR. THEREFORE, THE AMOUNT RECEIVED WAS OFFERED FOR TAX. 2.7 PRIMARY ISSUE WHICH ARISES FOR CONSIDERATION IS WHETHER THE CONDUCT OF THE ASSESSEE WAS BONAFIDE. THAT THE CONDUCT OF THE ASSESSEE WAS BONAFIDE AND THE ONUS TO SHOW AND ESTABLISH BONAFIDES HAS BEEN DISCHARGED. TEST OF BONA FIDE HAS TO BE APPLIED KEEPING IN MIND THE POSITION AS IT EXISTED, WHEN THE RETURN OF INCOME WAS FILED. -: 11: - 11 THE ACT, I.E. THE INCOME TAX ACT, IS A COMPLEX LEGISLATION INVOLVING INTRICATE AND OFTEN DEBATABLE LEGAL POSITIONS. THE LEGAL ISSUE INVOLVED MAY RELATE TO PRINCIPLES OF ACCOUNTANCY. INVARIABLY, ON QUESTIONS OF INTERPRETATION, THE ASSESSEES DO ADOPT A LEGAL POSITION WHICH THEY PERCEIVED AS ADVISED. THIS WOULD NOT BE CONSTRUED AS LACK OF BONA FIDES AS LONG AS THE LEGAL POSITION SO ADOPTED IS NOT PER SE CONTRARY TO THE LANGUAGE OF THE STATUTE OR AN UNDEBATABLE LEGAL POSITION NOT CAPABLE OF A DIFFERENT CONNOTATION AND UNDERSTANDING. WHEN TWO LEGAL INTERPRETATIONS WERE PLAUSIBLE AND THERE WAS A GENUINE OR CREDIBLE PLEA, PENALTY FOR CONCEALMENT/FURNISHING OF INACCURATE PARTICULARS, SHOULD NOT AND CANNOT BE IMPOSED. IF THE VIEW TAKEN BY THE ASSESSEE REQUIRED CONSIDERATION AND WAS REASONABLY ARGUABLE, HE SHOULD NOT BE PENALIZED FOR TAKING THE POSITION. THE TAX STATUTES ARE -: 12: - 12 CONVOLUTED AND COMPLEX AND THERE CAN BE MANIFOLD OPINIONS ON INTERPRETATION AND UNDERSTANDING OF A PROVISION OR THE TAX TREATMENT. IN SUCH CASES, EVEN WHEN THE INTERPRETATION PLACED BY THE REVENUE IS ACCEPTED, PENALTY SHOULD NOT BE IMPOSED IF THE CONTENTION OF THE ASSESSEE WAS PLAUSIBLE AND BONA FIDE. 2.8 WHILE APPLYING THE TEST OF BONAFIDE, ONE HAS TO ALSO KEEP IN MIND THAT EVEN BEST OF LEGAL MINDS CAN HAVE DIFFERENCE OF OPINION. IT IS NOT UNCOMMON TO HAVE DISSENTING OPINION ON THE QUESTION OF LAW, IN THE COURTS. 2.9 ON THE AFORESAID ASPECT, THE ASSESSEE WOULD LIKE TO REFER TO THE FOLLOWING OBSERVATIONS OF THE SUPREME COURT IN THE CASE OF CIT V. RELIANCE PETROPRODUCTS (PI LTD.. (2010) 11 SCC 762 WHEREIN IT WAS HELD -: 13: - 13 WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN MERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. SUCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(I)(C) OF THE ACT. A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO INACCURATE PARTICULARS .. 20. WE DO NOT AGREE, AS THE ASSESSEE HAD FURNISHED ALL THE DETAILS OF ITS EXPENDITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, IN THEMSELVES, WERE NOT FOUND TO BE INACCURATE NOR COULD BE VIEWED AS THE CONCEALMENT OF INCOME ON ITS PART. IT WAS UP TO THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE -: 14: - 14 RETURN OR NOT., MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, WHICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT, IN OUR OPINION, ATTRACT THE PENALTY U/S 271(1)(C). IF WE ACCEPT THE CONTENTION OF THE REVENUE THEN IN CASE OF EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCEPTED BY THE ASSESSING OFFICER FOR ANY REASON, THE ASSESSEE WILL INVITE PENALTY U/S 271(1). THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE. 8. THE LD. D.R. RELIED UPON THE ORDER OF CIT(A). 9. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. 10. THE POSITION OF LAW REGARDING LEVY OF PENALTY U/S 271(1)(C) HAS UNDERGONE A SUBSTANTIAL CHANGE AFTER INSERTION OF EXPLANATION I TO SECTION 271(1)(C) WITH EFFECT FROM 01.04.1976. EXPLANATION 1 TO SECTION 271(1)(C) RAISES A PRESUMP TION THAT AS AND WHEN ANY AMOUNT IS ADDED OR DISALLOWED IN CO MPUTING -: 15: - 15 THE TOTAL INCOME, THE SAME SHALL BE DEEMED OR REPRE SENT THE INCOME IN RESPECT OF WHICH THE PARTICULARS HAVE BEE N CONCEALED. FURTHER WITH EFFECT FROM 10.9.1986 AMEND MENT HAS BEEN MADE TO EXPLANATION 1(B) TO SECTION 271(1)(C), AFTER THIS AMENDMENT FURTHER ONUS HAS BEEN PLACED ON THE ASSES SEE TO PROVE THAT EXPLANATION FURNISHED BY HIM WAS BONA FI DE. THE POSITION NOW IS THAT UNLESS AND UNTIL THE ASSESSEE SUBSTANTIATES THE EXPLANATION AND PROVES THAT THE E XPLANATION WAS BONA FIDE, THE ADDITION MADE TO HIS INCOME SHAL L BE DEEMED TO REPRESENT THE CONCEALED INCOME. ON ANALYS IS OF PROVISIONS OF SECTION 271(1)(C), IT IS OBSERVED THA T EXPLANATION 1 TO SECTION 271(1)(C) PROVIDES THE SITUATION, WHER E NO EXPLANATION FOR THE FAILURE IS OFFERED BY THE ASSES SEE OR WHERE THE EXPLANATION THAT HAS BEEN OFFERED IS FOUND TO B E FALSE OR WHERE THE ASSESSEE IS NOT ABOUT TO SUBSTANTIATE THE EXPLANATION OFFERED BY HIM. IN ALL THE CASES, THE A MOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON SHALL BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH THE PARTICULARS HAVE BEEN CONCEALED. AS PER PROVISO TO THIS EXPLANATION, THE ONUS TO ESTABLISH THAT EXPLANATION OFFERED WAS -: 16: - 16 BONA FIDE AND FACTS RELATING TO SAME AND MATERIAL T O THE COMPUTATION OF HIS INCOME EVEN DISCLOSED BY HIM WIL L BE ON THE PERSONS CHARGED FOR CONCEALMENT. AS PER THE PROVISIONS 2 TO EXPLANATION 1(B) NOW TH E ENTIRE ONUS IS ON THE ASSESSEE TO NOT ONLY OFFER AN EXPLAN ATION BUT ALSO TO SUBSTANTIATE IT AND TO PROVE THAT THE PRESU MPTION WAS BONA FIDE. AT THE SAME TIME THE PRESUMPTION SO RAIS ED BY THE EXPLANATION 1 IS REBUTTABLE. THE EFFECT IS THAT UNL ESS AND UNTIL REBUTS THE PRESUMPTION, HE WOULD BE LIABLE TO PENAL TY U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. IT IS NOW ES TABLISHED LAW THAT PRESUMPTION WOULD NOT STAND REBUTTED MERELY BY FURNISHING ANY GENERAL OR FANTASTIC OR FANCIFUL OR UNREASONABLE EXPLANATION BY THE ASSESSEE, THE EXPLANATION SHOULD BE BASED ON COGENT AND RELEVANT MATERIAL AND SHOULD BE ACCEP TED TO THE AUTHORITIES. 10. THE EXPRESSION FURNISHING THE INACCURATE PA RTICULARS OF INCOME HAS BEEN NOT DEFINED IN THE ACT. THE EXP RESSION INACCURATE REFERS TO NOT ONLY IN CONFORMITY WITH THE FACT OR TRUTH AND THAT IS AMENDMENT, WHICH IS RELEVANT IN T HE CONTEXT -: 17: - 17 OF FURNISHING INACCURATE PARTICULARS. THE MEANING B Y FURNISHING INACCURATE PARTICULARS OF INCOME IMPLIES FURNISHING OF DETAILS OR INFORMATION ABOUT THE INCOME WHICH AR E NOT IN CONFORMITY WITH THE FACT OR TRUTH. THE DETAILS OR I NFORMATION ABOUT INCOME DEALS WHICH ARE FACTUAL DETAIL OF INCO ME AND THIS CANNOT BE EXTENDED TO THE AREA, WHICH ARE SUBJECTIV E SUCH AS STATUS OF TAXABILITY OF INCOME, ADMISSIBILITY OF DE DUCTION AND INTERPRETATION OF LAW. FURNISHING OF INACCURATE INF ORMATION, THUS, RELATES TO FURNISHING THE FACTUAL INCORRECT D ETAILS AND INFORMATION ABOUT THE INCOME. THE ADMISSION OR REJE CTION OF A CLAIM SUBJECT TO EXERCISE AND WHETHER THE CLAIM IS ACCEPTED OR REJECTED HAS NOTHING TO DO WITH FURNISHING OF INACC URATE PARTICULARS OF INCOME. RAISING A LEGAL CLAIM, EVEN IF IT IS ULTIMATELY FOUND TO BE LEGALLY UNACCEPTABLE CANNOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. WE FIND THAT, IN THIS CASE, THE ASSESSEE HAS MADE A BONA FIDE LEGAL CLAIM, WHICH WAS NOT ACCEPTED BY THE TAX AUTHORITY OR JUD ICIAL AUTHORITY. WE FIND THAT THE ASSESSEES CLAIM WAS NO T ACCEPTED BY THE AUTHORITY, IT DOES NOT MEAN THAT THE ASSESSE E HAS FURNISHED INACCURATE PARTICULARS OF INCOME. THE HON 'BLE -: 18: - 18 SUPREME COURT IN THE CASE OF UNION OF INDIA VS. RAJASTHAN SPINNING AND WEAVING MILLS REPORTED IN (2009) 13 SCC 448, CONSIDERED THE EARLIER DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF UNION OF INDIA AND ORS VS. DHARMENDRA TEXTILES PROCESSORS & ORS., REPORTED IN (2008) 306 ITR 277 (SC) AND HELD THAT IT GOES WITHOUT SAYING THAT FOR APPLICABILITY OF SECTION 27 1(L)(C) OF THE ACT, CONDITION STATED THEREIN MUST EXIST. THE A BOVE SAID DECISION CAME UP FOR CONSIDERATION IN THE CASE OF COMMISSIONER OF INCOME TAX VS. RELIANCE PETROPRODUC TS PVT., LTD., REPORTED IN (2010) 322 ITR 158 (SC). ON READING OF SECTION 271(1)(C) , THE HON'BLE SUPREME COURT POINTED OUT THAT IN ORDER TO BRING THE CASE UNDER S ECTION 271(1)(C), THERE HAS TO BE CONCEALMENT OF THE PARTI CULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. IN ORDER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION COU LD NOT BE INVOKED. THUS, THE HON'BLE SUPREME COURT POINTED OU T THAT A MERE MAKING OF CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY -: 19: - 19 ITSELF, WOULD NOT AMOUNT TO FURNISHING OF INACCURAT E PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. T HE READING OF THE DECISION OF THE HON'BLE SUPREME COUR T REFERRED TO ABOVE, THUS POINTS OUT THAT FOR SUSTAIN ING PENALTY, THE BONA FIDE EXPLANATION OF THE ASSESSEE MUST BE LOOKED AT, SO THAT THE CONTUMACIOUS CONDUCT OF THE ASSESSEE FOR THE PURPOSE OF SUSTAINING THE PENALTY WOULD BE TAKEN AS CONDITION THAT IS THE MAIN REQUIREMENT UND ER SECTION 271(L)(C) OF THE ACT. REFERRING TO THE DECI SION IN THE CASE OF DHARMENDRA TEXTILE PROCESSORS, (SUPRA), THE HON'BLE SUPREME COURT POINTED OUT THAT IN THE BACKG ROUND OF SECTION 271(L)(C) OF THE ACT, THERE IS NO NECESS ITY OF MENS REA BEING SHOWN BY THE REVENUE, HOWEVER REFERRING TO TH E EXPLANATION TO SECTION 271(L)(C) PENALTY BEING A MULTIPLE LIABILITY, THE BONA FIDE OF THE CONDUCT OF THE ASSE SSEE NECESSARILY ASSUMES SIGNIFICANT EVEN THOUGH WILLFUL NESS OF THE ASSESSEE MAY NOT BE A CRITERIA, THE CONDUCT IS TO BE CONSIDERED. THUS, A MERE FACT THAT THE ADDITION IN THIS CASE HAS BEEN SUSTAINED BY THIS COURT BY ITSELF WOULD NO T LEAD TO THE AUTOMATIC APPLICATION TO SECTION 271(L). -: 20: - 20 11. IN THE INSTANT CASE, WE FIND THAT IT IS NOT THE CAS E OF CONCEALMENT OF INCOME OR INACCURATE PARTICULARS OF INCOME. IN THIS CASE, THE ONLY DISPUTE IS WHETHER THE ASSESSEE HAS OFFERED THE INCOME IN ASSESSMENT YEAR 2007-08 INSTEAD OF 20 06-07. IN THIS CASE, THE ASSESSEE HAS OFFERED THE INCOME IN A SSESSMENT YEAR 2007-08 AND AO WAS OF THE OPINION THE SAME SHO ULD BE TAXED IN ASSESSMENT YEAR 2006-07. THEREFORE, WE ARE OF THE VIEW THAT THIS DISPUTE REGARDING ACTUAL OF INCOME I N WHICH YEAR THE INCOME SHALL ACCRUE. THEREFORE, AS PER THE DECI SION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. EXCEL INDUSTRIES , NO PENALTY CAN BE LEVIED. HON'BLE SUPREME COURT I N THE CASE OF CIT VS. EXCEL INDUSTRIES (2013) 358 ITR 295 ( S. C.) HAS HELD AS UNDER :- THIRDLY, THE REAL QUESTION CONCERNING US IS THE YEA R IN WHICH THE ASSESSEE IS REQUIRED TO PAY TAX. THERE IS NO DISPUTE THAT IN THE SUBSEQUENT ACCOUNTING YEAR, THE ASSESSEE DID MAKE IMPORTS AND DID DERIVE BENEFITS UNDER THE ADVANCE LICENCE AND THE DUTY ENTITLEMENT PASS BOOK AND PAID TAX THEREON. -: 21: - 21 THEREFORE, IT IS NOT AS IF THE REVENUE HAS BEEN DEPRIVED OF ANY TAX . WE ARE TOLD THAT THE RATE OF TAX REMAINED THE SAME IN THE PRESENT ASSESSMENT YEAR AS WELL AS IN THE SUBSEQUENT ASSESSMENT YEAR. THEREFORE, THE DISPUTE RAISED BY THE REVENUE IS ENTIRELY ACADEMIC OR AT BEST MAY HAVE A MINOR TAX EFFECT. THERE WAS, THEREFORE, NO NEED FOR THE REVEN UE TO CONTINUE WITH THIS LITIGATION WHEN IT WAS QUITE CLEAR THAT NOT ONLY WAS IT FRUITLESS (ON MERITS) BUT ALSO THAT IT MAY NOT HAVE ADDED ANYTHING MUCH TO THE PUBLIC COFFERS. 12. WE FOUND THAT SIMILARLY THE CASE IS SQUARELY COVER ED BY THE DECISION OF RELIANCE PETRO PRODUCTS (SUPRA), WHEREIN THE HON'BLE SUPREME COURT HAS CLEARLY HELD THAT IF THE ASSESSEE MADE ANY CLAIM IN HIS RETURN, WHICH CANNOT BE TERME D TO BE INACCURATE PARTICULARS. IN THIS CASE, THE ASSESSEE HAS FILED ALL THE DETAILS OF EXPENDITURE AS WELL AS INCOME IN HIS RETURN, WHICH WERE NOT FOUND TO BE INACCURATE AND IT CANNOT BE VIEWED AS CONCEALMENT OF INCOME. THEREFORE, RESPECTFULLY F OLLOWING THE DECISION OF HON'BLE SUPREME COURT, WE DELETE THE PE NALTY. -: 22: - 22 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. THIS ORDER IS PRONOUNCED IN ACCORDANCE WITH RULE 34(4) OF I.T.A.T. RULES, BY PUTTING THE COPY OF THE SAME ON NOTICE BOARD ON 31 ST JULY, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 31 ST JULY, 2015. CPU* 1331