DCIT, New Delhi V. M/s. Bharat Aluminium Company Limited, New Delhi

ITA 5333/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2897 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 31-05-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 30-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN

Judgement Text

1 | P A G E IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A NEW DELHI BEFORE SHRI B.P.JAIN, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 5333/DEL /2014 ASSTT. YEAR: 2008-09 DY.COMMISSIONER OF INCOME TAX, CIRCLE 2(1), NEW DELHI. VS M/S BHARAT ALUMINIUM COMPANY LIMITED, CORE-6, SCOPE COMPLEX, LODHI ROAD, NEW DELHI-110016 (PAN: AAACB1290N) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K. JAIN, SR. DR RESPONDENT BY : NONE DATE OF HEARING : 09.11.2017 DATE OF PRONOUNCEMENT: 27.12.2017 ORDER PER SUDHANSHU SRIVASTAVA, J.M. THIS APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAI NST THE ORDER PASSED BY THE LD. CIT(APPEALS)-V, NEW DELHI FOR ASS ESSMENT YEAR 2008-09 WHEREIN, VIDE ORDER DATED 18/07/2014, THE L D. CIT (APPEALS) HAS DELETED THE PENALTY OF RS. 16,10,668/- IMPOSED UNDER SECTION 271 (1) (C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CA LLED THE ACT ). ITA NO. 5333/DEL/2014 ASSESSMENT YEAR 2008-09 2 | P A G E 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSM ENT IN THIS CASE WAS COMPLETED AT AN INCOME OF RS. 2,42,52,48,040/- AFTER EXCLUDING OTHER INCOME OF RS. 47,38,652/- PERTAINING TO SALE OF SCRAP FOR THE PURPOSE OF WORKING OUT ELIGIBLE DEDUCTION UNDER SEC TION 80IA (1) OF THE ACT. THE ASSESSEE HAD CLAIMED DEDUCTION UNDER S ECTION 80IA ON SALE OF SCRAP OF RS. 47,38,652/- WHICH THE AO DID N OT ACCEPT AND THIS FINDING OF THE AO WAS ALSO SUSTAINED IN APPEAL BY T HE LD. CIT (APPEALS) AS WELL AS THE ITAT. THEREAFTER, THE AO P ROCEEDED TO IMPOSE PENALTY OF RS. 16,10,668/- UNDER SECTION 271 (1) (C) OF THE ACT ON THE DISALLOWANCE AND IN APPEAL BY THE ASSESSEE, THE LD. CIT (APPEALS) DELETED THE PENALTY AND NOW THE DEPARTMEN T IS IN APPEAL AGAINST THE DELETION OF THE SAID PENALTY. THE FOLLO WING GROUNDS HAVE BEEN RAISED IN THIS APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT (A) HAS ERRED: (I) IN DELETING THE PENALTY OF RS. 16,10,668/- IMPOSED U/S 271 (1)(C) OF THE ACT IGNORING THE FACT THAT TH E ISSUE, NAMELY DEDUCTION U/S 801A ON SCRAP SALES, ON WHICH ADDITION WAS MADE AND WHICH IS THE BASIS FOR IMPOSING PENALTY IS NOT A DISPUTED ISSUE AT ALL AND SETTLED AGAINST ASSESSEE WAY BACK AND MUCH BEFORE FILING OF RETURN OF INCOME. (II) IN OBSERVING THAT ISSUE REGARDING CLAIM OF DEDUCTION U/S 80IA ON SALE OF SCRAP WAS DEBATABLE ITA NO. 5333/DEL/2014 ASSESSMENT YEAR 2008-09 3 | P A G E TILL FINALLY SETTLED BY DECISION OF HONBLE SUPREME COURT IN THE CASE OF LIBERTY INDIA VS CIT 317 ITR 218. ACTUALLY THIS DECISION IS NOT REFERRING THE IS SUE OF DEDUCTION U/S 80IA ON SCRAP SALE AT ALL. 2. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIG HT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) O F APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 3. NONE WAS PRESENT FOR THE ASSESSEE. HOWEVER, LOOK ING INTO THE FACTS OF THE CASE WE DEEM IT FIT TO HEAR THE APPEAL OF THE DEPARTMENT EX- PARTE QUA THE ASSESSEE. 4. THE LD. DEPARTMENTAL REPRESENTATIVE READ OUT FRO M THE ASSESSMENT ORDER AS WELL AS THE PENALTY ORDER AND S UBMITTED THAT BY INCLUDING THE SCRAP SALES IN THE CLAIM OF DEDUCTION UNDER SECTION 80IA OF THE ACT, THE ASSESSEE HAD CONCEALED INCOME AS WE LL AS FURNISHED INACCURATE PARTICULARS OF INCOME AND, THEREFORE, TH E PENALTY HAD BEEN RIGHTLY IMPOSED. IT WAS SUBMITTED THAT THE LD. CIT (APPEALS) HAD DELETED THE PENALTY UNDER A MIS-INTERPRETATION OF T HE CASE LAWS AS RELIED UPON BY HIM. 5. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E AND HAVE ALSO PERUSED THE MATERIAL ON RECORD. THE LD. CIT (A PPEALS), WHILE DELETING THE PENALTY HAS NOTED THAT THE CLAIM OF TH E ASSESSEE FOR SCRAP ITA NO. 5333/DEL/2014 ASSESSMENT YEAR 2008-09 4 | P A G E SALES AS BEING ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA OF THE ACT WAS BASED ON CERTAIN JUDICIAL PRONOUNCEMENTS AND TH E ISSUE HAD NOT YET ATTAINED FINALITY AND, THEREFORE, THE ASSESSEE S ACT COULD NOT BE SAID TO BE MALICIOUS. THE LD. CIT (APPEALS) HAS NOTED TH AT THE ASSESSEES CLAIM WAS AT BEST DEBATABLE. THE LD. CIT (A) HAS PL ACED RELIANCE ON THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF CIT VERSUS RELIANCE PETROPRODUCTS PRIVATE LIMITED REPORTED IN 322 ITR 158 (SC) FOR DELETING THE PENALTY. 5.1 IT IS SEEN THAT THE ASSESSEE CANNOT BE SAID TO HAVE FURNISHED INACCURATE PARTICULARS OF INCOME AS THE PARTICULARS REGARDING THE CLAIM OF DEDUCTION UNDER SECTION 80IA WERE VERY MUC H PART OF THE ASSESSMENT PROCEEDINGS/RETURN OF INCOME/AUDITED FIN ANCIAL STATEMENTS. WE ALSO FIND THAT THE RELIANCE OF THE L D. CIT (APPEALS) ON THE JUDGMENT OF THE HONBLE APEX COURT IN THE CA SE OF CIT VERSUS RELIANCE PETROPRODUCTS PRIVATE LIMITED (SUPRA) ALSO CANNOT BE FAULTED WITH. T HE HONBLE APEX COURT, WHILE INTERPRETING THE PROVISIONS OF SECTION 271(1)( C ) OF THE ACT, HAS HELD THAT A GLANCE AT THE SAID PROVISION WOULD SUGGEST THAT IN ORDER TO BE CO VERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INC OME OF THE ASSESSEE. ITA NO. 5333/DEL/2014 ASSESSMENT YEAR 2008-09 5 | P A G E SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURA TE OF HIS INCOME. IN THE FACTS OF THAT CASE, THE COURT FOUND THAT IT WAS NOT A CASE OF CONCEALMENT OF THE PARTICULARS OF THE INCOME, NOR W AS IT THE CASE OF THE REVENUE EITHER. HOWEVER, THE COUNSEL FOR THE REVENU E SUGGESTED THAT BY MAKING AN INCORRECT CLAIM FOR THE EXPENDITURE ON INTEREST, THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF IN COME. THE COURT OBSERVED THAT IT HAD TO ONLY SEE AS TO WHETHER IN T HAT CASE, AS A MATTER OF FACT, THE ASSESSEE HAD GIVEN INACCURATE PARTICUL ARS. THE COURT NOTED THAT AS PER LAW LEXICON, THE MEANING OF THE WORD 'P ARTICULAR' IS A DETAIL OR DETAILS (IN THE PLURAL SENSE); THE DETAIL S OF A CLAIM, OR THE SEPARATE ITEMS OF AN ACCOUNT. THEREFORE, THE WORD ' PARTICULAR' USED IN SECTION 271(1)( C ) WOULD EMBRACE THE MEANING OF THE DETAILS OF THE CLAIM MADE. THE COURT FURTHER OBSERVED THAT IN WEBSTER'S DICTIONARY, THE WORD 'INACCURATE' HAS BEEN DEFINED AS: 'NOT ACCURAT E, NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS; AS AN I NACCURATE STATEMENT, COPY OR TRANSCRIPT.' THE COURT OBSERVED THAT READIN G THE WORDS 'INACCURATE' AND 'PARTICULARS' IN CONJUNCTION, THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCUR ATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. THE C OURT NOTED THAT IT ITA NO. 5333/DEL/2014 ASSESSMENT YEAR 2008-09 6 | P A G E WAS AN ADMITTED POSITION THAT NO INFORMATION GIVEN IN THE RETURN WAS FOUND TO BE INCORRECT OR INACCURATE. IT WAS NOT AS IF ANY STATEMENT MADE OR ANY DETAIL SUPPLIED WAS FOUND TO BE FACTUAL LY INCORRECT AND ACCORDINGLY, HELD THAT, PRIMA FACIE , THE ASSESSEE COULD NOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. THE COURT REP ELLED THE CONTENTION RAISED BY THE COUNSEL FOR THE REVENUE THAT 'SUBMITT ING AN INCORRECT CLAIM IN LAW FOR THE EXPENDITURE ON INTEREST WOULD AMOUNT TO GIVING INACCURATE PARTICULARS OF SUCH INCOME'. THE HONBLE APEX COURT HELD THAT IN ORDER TO EXPOSE THE ASSESSEE TO THE PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY ANY STRETCH OF IMAGINATION, M AKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISH ING INACCURATE PARTICULARS. THEREFORE, IT IS OBVIOUS THAT IT MUST BE SHOWN THAT THE CONDITIONS UNDER SECTION 271(1)( C ) MUST EXIST BEFORE THE PENALTY IS IMPOSED. 5.2 REVERTING TO THE FACTS OF THE PRESENT CASE, THE ASSESSING OFFICER, IN THE PENALTY ORDER, HAS OBSERVED THAT THE ASSESSE EE HAS FURNISHED INACCURATE PARTICULARS. THE AO HAS HELD THAT THE AC T OF CLAIMING DEDUCTION U/S 80IC WAS AN ACT OF FURNISHING OF INAC CURATE PARTICULARS ITA NO. 5333/DEL/2014 ASSESSMENT YEAR 2008-09 7 | P A G E OF INCOME. HOWEVER, W ITH REGARD TO THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT PERTAINING TO PENALTY, THE HONBLE APEX COURT HAS AUTHORITATIVELY LAID DOWN THAT MAKING OF A CLAIM BY THE ASSESSEE WHICH IS NOT SUSTAINABLE WILL NOT TANTAMOUNT TO FUR NISHING INACCURATE PARTICULARS. IN CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA), THE HONBLE APEX COURT HAS HELD AS FOLLOWS: A GLANCE AT THIS PROVISION WOULD SUGGEST THAT IN O RDER TO BE COVERED, THERE HAS TO BE CONCEALMENT OF PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICU LARS OF HIS INCOME. THE PRESENT IS NOT A CASE OF CONCEALMENT OF INCOME. THA T IS NOT THE CASE OF THE REVENUE EITHER. HOWEVER, THE LD. COUNSEL FOR THE RE VENUE SUGGESTED THAT BY MAKING INCORRECT CLAIM FOR THE EXPENDITURE ON INTER EST, THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. AS PER LAW LEXICON, THE MEANING OF THE WORD 'PARTICULAR' IS A DETAIL OR DET AILS (IN PLURAL SENSE); THE DETAILS OF A CLAIM, OR THE SEPARATE ITEMS OF AN ACC OUNT. THEREFORE, THE WORD 'PARTICULARS' USED IN THE SECTION 271 (1) (C) WOULD EMBRACE THE MEANING OF THE DETAILS OF THE CLAIM MADE. IT IS AN ADMITTED POSITI ON IN THE PRESENT CASE THAT NO INFORMATION GIVEN IN THE RETURN WAS FOUND TO BE INCORRECT OR INACCURATE. IT IS NOT AS IF ANY STATEMENT MADE OR ANY DETAIL SUPPL IED WAS FOUND TO BE FACTUALLY INCORRECT. HENCE, AT LEAST, PRIMA FACIE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. THE LE ARNED COUNSEL ARGUED THAT 'SUBMITTING AN INCORRECT CLAIM IN LAW FOR THE EXPEN DITURE ON INTEREST WOULD ITA NO. 5333/DEL/2014 ASSESSMENT YEAR 2008-09 8 | P A G E AMOUNT TO GIVING INACCURATE PARTICULARS OF SUCH INC OME.' WE DO NOT THINK THAT SUCH CAN BE THE INTERPRETATION OF THE CONCERNE D WORDS. THE WORDS ARE PLAIN AND SIMPLE. IN ORDER TO EXPOSE THE ASSESSEE T O THE PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY P ROVISION CANNOT BE INVOKED. BY ANY STRETCH OF IMAGINATION, MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. 5.3 ACCORDINGLY, WE FIND NO REASON TO INTERFERE WIT H THE FINDINGS OF THE LD. CIT (APPEALS) AND WE DISMISS THE GROUND RAI SED BY THE DEPARTMENT. 6. IN THE FINAL RESULT THE APPEAL PREFERRED BY THE DEPARTMENT STANDS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 27TH DECEM BER, 2017. SD/- SD/- (B.P. JAIN ) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 27TH DECEMBER, 2017 DRAGON COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER ASSISTANT REGI STRAR