AJANTA PHARMA LTD, MUMBAI V. DCIT CEN CIR 7(2), MUMBAI

ITA 6882/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0779 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 24-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MEENA
• Assessee Lawyers: J D MISTRI
• Keywords: Bogus purchase; Capital asset; Gift; Business income; Depreciation; Business expenditure; Search and seizure; Principle of natural justice; Retrospective amendment; Wrong claim
• Section: 143(3); 153A; 115JB; 37(1); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI , JUDICIAL MEMBER ITA NO. 6882/MUM/2016 : A.Y : 2012 - 13 M/S. AJANTA PHARMA LIMITED 98, GOVT. INDUSTRIAL AREA, HINDUSTAN NAKA, CHARKOP, KANDIVALI (W), MUMBAI 400 067. (APPELLANT) PAN : AAACA5579P VS. DCIT, CENTRAL CIRCLE - 7(2), MUMBAI (RESPONDENT) APPELLANT BY : SHRI J.D. MISTRI & SHRI MADHUR AGRAWAL RESPONDENT BY : SHRI R.P. MEENA DATE OF HEARING : 24/10/2017 DATE OF PRONOUNCEMENT : 19 /01/2018 O R D E R PER G.S. PANNU , AM : THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) - 49 , MUMBAI DATED 20.09.2016 , PERTAINING TO THE ASSESSMENT YEAR 2012 - 13 , WHICH IN TURN HAS ARISEN FROM THE ORDE R PASSED BY THE ASSESSING OFFICER, MUMBAI DATED 30.09.2015 UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. 2. IN ITS APPEAL, ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AND IN LAW THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER (HEREIN AFTER REFERRED TO AS 'THE AO') UNDER SECTION 271( 1 )(C) OF THE ACT IS INVALID AND BAD IN LAW AS THE JURISDICTIONAL CONDITIONS FOR LEVY OF PENALTY HAS NOT BEEN SATISFIED. 2. ON THE FA CTS AND IN THE CIRCUMSTANCE OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME - TAX (APPEALS) ('HEREIN AFTER REFERRED TO AS 'CIT(A)') ERRED IN RELYING ON SECTION 292B OF THE ACT FOR CONFIRMING THE ORDER PASSED BY THE AO WHEN THE PROVISION OF SECTION 292B AR E NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME - TAX (APPEALS) ('HEREIN AFTER REFERRED TO AS 'CIT(A)') ERRED IN CONFIRMING THE LEVY OF PENALTY OF RS.7,36,12,079/ - UNDER SECTION 271( 1 )(C) OF THE ACT. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN HOLDING THAT THE PROVISIONS OF EXPLANATION 5A TO SECTION 271 IS APPLICABLE. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN CONFIRMING THE LEVY OF PENALTY UNDER SECTION 271( 1 )(C) OF THE ACT, WHEN THERE IS NO DIFFERENCE BETWEEN THE RETURNED INCOME AND THE ASSESSED INCOME. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LA W, THE CIT(A) ERRED IN CONFIRMING THE LEVY OF PENALTY UNDER SECTION 271( 1 )(C) OF THE ACT, WHEN THERE WAS NO 'TAX SOUGHT TO BE EVADED' BY THE APPELLANT AS NO ADDITIONAL TAX WAS PAYABLE AS PER THE ASSESSMENT ORDER PASSED UNDER SECTION 153A OF THE ACT. THE CI T(A) ERRED IN APPLYING THE DECISION OF CIT V NALWA SONS INVESTMENT LTD. (2010) 194 TAXMAN 387. 7. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AND IN LAW, THE CIT(A) ERRED IN NOT APPRECIATING THAT EXPENSES DISALLOWED BY THE APPELLANT WERE ALL GENUINE EXPENSES FULLY SUPPORTED BY BILLS AND VOUCHERS, PAID BY ACCOUNT PAYEE CHEQUES AND WERE ACCOUNTED IN THE BOOKS OF ACCOUNTS AND, THEREFORE, NO PENALTY SHOULD BE LEVIED FOR THE DISALLOWANCE OF SUCH EXPENSES. 3 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. 8. ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CAS E AND IN LAW, THE CIT(A) ERRED IN NOT APPRECIATING THAT EXPENSES DISALLOWED BY THE APPELLANT WERE ON DEBATABLE ISSUE AND THEREFORE, PENALTY UNDER SECTION 271( 1 )(C) OF THE ACT CANNOT BE LEVIED FOR THE SAME. 3. ALTHOUGH THE APPELLANT - ASSESSEE HAS RAISED MU LTIPLE GROUNDS OF APPEAL, THE SUM AND SUBSTANCE OF THE DISPUTE ARISES FROM THE ACTION OF THE ASSESSING OFFICER IN LEVYING PENALTY U/S 271(1)(C) OF THE ACT AMOUNTING TO RS.7,36,12,079/ - . AT THE TIME OF HEARING, VARIED ARGUMENTS HAVE BEEN RAISED, WHICH WE S HALL DEAL HEREINAFTER, BUT BEFORE THAT IT IS APPROPRIATE TO NOTE, IN SLIGHT DETAIL, THE BACKGROUND AND MANNER IN WHICH THE PENALTY U/S 271(1)(C) OF THE ACT HAS BEEN IMPOSED BY THE ASSESSING OFFICER. 4. THE APPELLANT IS A COMPANY INCORPORATED UNDER THE PRO VISIONS OF THE COMPANIES ACT, 1956, AND IS, INTER - ALIA , ENGAGED IN THE BUSINESS OF MANUFACTURE AND TRADING OF PHARMACEUTICALS, MEDICINES, MACHIN ERY , SPARES AND RELATED ITEMS AND RESEARCH AND DEVELOPMENT, ETC. FOR THE ASSESSMENT YEAR 2012 - 13, IT FILED A RETURN OF INCOME ON 28.09.2012 DECLARING A TOTAL INCOME OF RS.22,72,36,007/ - UNDER THE NORMAL PROVISIONS OF THE ACT, WHEREAS THE BOOK P ROFIT DETERM INED AS PER SEC. 115JB OF THE ACT WAS RS.79,94,14,271/ - . SINCE THE TAX PAYABLE AS PER MAT (I.E. SEC. 115JB) AT RS.15,97,44,731/ - WAS HIGHER THAN THE TAX PAYABLE AT RS.7,37,26,722/ - UNDER THE NORMAL PROVISIONS OF THE ACT, THE FINAL TAX LIABILITY WAS DECLAR ED AT RS.15,97,44,731/ - AS PER MAT UNDER SEC. 115JB OF THE ACT. SUBSEQUENTLY, ON 17.10.2012, A SEARCH AND SEIZURE ACTION WAS CARRIED OUT IN THE CASE OF THE ASSESSEE - COMPANY AND ITS GROUP CONCERNS. IT TRANSPIRES THAT CERTAIN ADDITIONAL INCOME U/S 132(4) O F THE ACT WAS DECLARED, AND ACCORDINGLY, IN RESPONSE TO THE NOTICE ISSUED U/S 153A OF THE ACT, ASSESSEE - COMPANY 4 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. DECLARED AN ENHANCED TOTAL INCOME OF RS.67,31,07,915/ - UNDER THE NORMAL PROVISIONS OF THE ACT, WHEREAS THE BOOK PROFIT AS PER SEC. 115JB OF TH E ACT REMAINED AT THE SAME FIGURE OF RS.79,84,14,271/ - . SO FAR AS THE PRESENT CONTROVERSY IS CONCERNED, IT IS NOTABLE THAT INCOME UNDER THE NORMAL PROVISIONS WAS ENHANCED BY A SUM OF RS.22,68,82,660/ - REPRESENTING ADDITIONAL INCOME U/S 132(4) OF THE ACT O FFERED UNDER FOUR HEADS RELATING TO BUSINESS INCOME AND NON - SET - OFF OF UNABSORBED BUSINESS LOSS/DEPRECIATION. HOWEVER, THE FINAL TAX LIABILITY REMAINED THE SAME AT RS.15,97,44,731/ - (AS ORIGINALLY DETERMINED AS PER MAT U/S 115JB), SINCE THE TAX PAYABLE AS PER THE NORMAL PROVISIONS WAS CALCULATED AFTER ALLOWING THE MAT CREDIT. THE ASSESSMENT U/S 153A R.W.S. 143(3) R.W.S. 144C(4)(A) OF THE ACT WAS COMPLETED ON 30.03.2015 AT A FIGURE OF RS.67,47,10,320/ - UNDER THE NORMAL PROVISIONS OF THE ACT; HOWEVER, THE A CCOMPANYING INCOME TAX COMPUTATION FORM (ITNS), A COPY OF WHICH WAS FILED IN THE COURSE OF HEARING, DETERMINES THE TAX CHARGEABLE AT RS.15,97,44,731/ - . 5. IN THE ABOVE BACKGROUND, THE ASSESSING OFFICER PASSED AN ORDER U/S 271(1)(C) OF THE ACT HOLDING THE ASSESSEE GUILTY OF FURNISHING INACCURATE PARTICULARS AND COMMITTING A DEFAULT WITHIN THE MEANING OF EXPLANATION 5A TO SEC. 271(1)(C) OF THE ACT QUA THE INCOME OF RS.22,68,82,660/ - AND HE LEVIED A PENALTY OF RS.7,36,12,079/ - EQUIVALENT TO 100% OF THE TAX SO UGHT TO BE EVADED ON THE AFORESAID INCOME. THIS LEVY HAS ALSO BEEN AFFIRMED BY THE CIT(A), AGAINST WHICH ASSESSEE IS IN APPEAL BEFORE US. 6. BEFORE US, THE LEARNED REPRESENTATIVE FOR THE APPELLANT HAS ASSAILED THE LEVY OF PENALTY ON THE POINT OF JURISDIC TION AS WELL AS ON MERIT S . FIRSTLY, IT IS CANVASSED THAT THE NOTICE DATED 30.03.2015 ISSUED U/S 274 R.W.S. 271(1)(C) 5 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. OF THE ACT INITIATING THE PENALTY PROCEEDINGS IS VAGUE AS IT DOES NOT SPECIFY THE CHARGE FOR WHICH THE NOTICE WA S ISSUED TO THE ASSESSEE. ACCORDING TO THE APPELLANT, THE NOTICE DOES NOT SPECIFY WHETHER THE PENALTY ACTION IS INITIATED FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME, AND THEREFORE THE NOTICE INITIATING THE PENALTY PROCEEDINGS IS BAD IN LAW. ON MERITS, IT IS CANVASSED BY THE LEARNED REPRESENTATIVE THAT NO PENALTY IS LEVIABLE U/S 271(1)(C) OF THE ACT MERELY BECAUSE THE AMOUNT WAS OFFERED IN THE STATEMENT RECORDED U/S 132(4) WITHOUT ESTABLISHING THAT THE ATTENDANT FACTS AND CIRCUMSTANC ES OF THE CASE JUSTIFY THE INFERENCE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. BY TAKING US THROUGH THE RELEVANT DISCUSSION IN THE ASSESSMENT ORDER ON EACH OF THE ADDITIONS IN QUESTION, IT HAS BEEN CANVASSED THAT EITHER T HE DISALLOWANCE IS NOT MERITED IN LAW OR IS OTHERWISE DEBATABLE IN NATURE, AND THUS NO PENALTY IS ATTRACTED U/S 271(1)(C) OF THE ACT. 7. THE FIRST PROPOSITION CANVASSED BY THE ASSESSEE IS WITH REFERENCE TO THE PENALTY NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT DATED 30.03.2015, A COPY OF WHICH HAS BEEN PLACED AT PAGE 3 OF THE PAPER BOOK. IT IS CANVASSED THAT THE SAME REFLECTS COMPLETE NON - APPLICATION OF MIND BY THE ASSESSING OFFICER INASMUCH AS THE IRRELEVANT PORTION OF THE NOTICE HAS NOT B EEN STRUCK - OFF. IT IS CANVASSED THAT THE NOTICE HAS BEEN ISSUED IN A STANDARD FORMAT AND THERE IS NO SPECIFIC CHARGE MADE AGAINST THE ASSESSEE AS TO WHETHER THE PENALTY PROCEEDINGS ARE INITIATED FOR CONCEALMENT OF THE PARTICULARS OF INCOME OR FOR FURNISHI NG OF INACCURATE PARTICULARS OF SUCH INCOME. ON THIS POINT, THE LEARNED REPRESENTATIVE REFERRED TO THE FOLLOWING JUDICIAL PRONOUNCEMENTS TO CONTEND THAT LEVY OF PENALTY IS ILLEGAL AND DESERVES TO BE SET - ASIDE : - 6 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. I) MEHERJEE CASSINATH HOLDINGS PVT. LTD., ITA NO. 2555/MUM/2012 DATED 28.04.2017; II) SATRA PROPERTIES (INDIA) LTD., ITA NOS. 4199 & 4733/MUM/2014 DATED 31.03.2017; III) SIDDHI HOME MAKERS, ITA NO. 4168/MUM/2013 DATED 28.04.2017; IV) PCIT VS. SMT. BAISETTY REVATHI, I.T.T.A NO. 684 OF 2016 DATED 13 .07.2017 (ANDHRA PRADESH HIGH COURT); V) CIT VS. MANJUNATHA COTTON & GINNING FACTORY, 359 ITR 565 (KARNATAKA); AND, VI) CIT VS. SAMSON PERINCHERY, 392 ITR 4 (BOM) 8 . ON THIS ASPECT, THE LD. CIT - DR VEHEMENTLY POINTED OUT THAT A PERUSAL OF THE PENALTY ORDE R CLEARLY ESTABLISHES THAT THE PENALTY HAS BEEN IMPOSED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME IN THE BACKGROUND OF THE DEFAULT FALLING IN THE SCOPE OF EXPLANATION 5A TO SEC. 271(1)(C) OF THE ACT, AND THAT THE ASSESSING OFFICER HAD DULY APPLIED HIS MIND. IT IS, THEREFORE, CANVASSED THAT IT IS NOT A CASE OF NON - APPLICATION OF MIND BY THE ASSESSING OFFICER. THE ATTENTION OF THE BENCH WAS ALSO DRAWN TO DISCUSSION BY THE CIT(A) IN PARA 7.2.1 OF HIS ORDER WHEREIN IT HAS BEEN NOTED THAT IN THE ASSES SMENT ORDER ITSELF THE ASSESSING OFFICER HAD ISSUED DIRECTIONS TO ISSUE NOTICE U/S 274 R.W.S. 271(1)(C) OF THE ACT FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND CONCEALMENT OF INCOME. THE LD. CIT - DR ALSO REFERRED TO THE DISCUSSION IN PARA 7.2.2 O F THE ORDER OF CIT(A) WHEREIN IT IS POINTED OUT THAT THE NOTICE U/S 274 R.W.S. 271(1)(C) WAS ISSUED ALONGWITH ASSESSMENT ORDER FINALISED U/S 143(3) R.W.S. 153 OF THE ACT DATED 30.03.2015, AND IN THE ASSESSMENT ORDER PENALTY HAS BEEN INITIATED FOR FURNISHIN G OF 7 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. INACCURATE PARTICULARS AND CONCEALMENT OF INCOME, AND ACCORDING TO THE LD. CIT - DR, IF THE ASSESSMENT ORDER IS READ ALONG THE NOTICE AND THE SUBSEQUENT PENALTY ORDER, IT IS QUITE CLEAR THAT THE JURISDICTION TO LEVY PENALTY HAS BEEN ASSUMED FOR FURNISHI NG OF INACCURATE PARTICULARS OF INCOME AND IT HAS BEEN ULTIMATELY LEVIED FOR THE SAME REASON. IT IS POINTED OUT THAT EVEN IF NON - STRIKING - OFF OF THE IRRELEVANT PORTION IN THE NOTICE IS TO BE TAKEN AS A MISTAKE, THE SAME WOULD NOT INVALIDATE THE NOTICE OR THE SUBSEQUENT PENALTY PROCEEDINGS . 9 . WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. BEFORE WE PROCEED TO APPRECIATE THE POINT SOUGHT TO BE RAISED, BASED ON THE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT, IT WOULD BE APPROPRIATE TO REFER TO THE PHRASEOLOGY OF SEC. 271(1)(C) OF THE ACT. NOTABLY, SEC. 271(1)(C) OF THE ACT EMPOWERS THE ASSESSING OFFICER TO IMPOSE PENALTY TO THE EXTENT SPECIFIED THEREIN, IF IN THE COURSE OF ANY PROCEEDINGS UNDER THE ACT, HE IS SATISFIED THAT ANY PERSON HAS CONC EALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. PERTINENTLY, WHAT IS POSTULATED IN SEC. 271(1)(C) OF THE ACT IS THAT THE PENALTY IS EXIGIBLE ON EXISTENCE OF ANY OF THE TWO SITUATIONS, NAMELY, FOR CONCEALMENT OF PART ICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. IN FACT, THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY (SUPRA) WHILE ELABORATELY DISCUSSING THE MECHANICS OF SEC. 271(1)(C) OF THE ACT OBSERVED THA T THERE COULD BE CASES WHERE OFFENCE WOULD FALL IN BOTH THE CATEGORIES, NAMELY, CONCEAL MENT OF THE PARTICULARS OF INCOME AS WELL AS FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. SO, HOWEVER, AT THE MOMENT WE ARE ONLY TRYING TO POINT OUT THAT THE PR E - CONDITIONS LAID DOWN IN SEC. 271(1)(C) OF THE ACT FOR THE LEVY OF PENALTY, NAMELY, 8 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. CONCEALMENT OF PARTICULARS OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME DENOTE TWO DIFFERENT CONNOTATIONS. THIS DISTINCTION HAS BEEN NOTED BY THE MUMB AI BENCH OF THE TRIBUNAL IN THE CASE OF MEHERJEE CASSINATH HOLDINGS PRIVATE LIMITED, ITA NO. 2555/MUM/2012 DATED 28.04.2017 WHEREIN ONE OF US (AM) IS A MEMBER CONSTITUTING THE BENCH. THE SAID DISTINCTION IS QUITE WELL UNDERSTOOD AND, IN THAT CONTEXT, REFE RENCE CAN ALSO BE GAINFULLY MADE TO THE JUDGMENTS OF THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF, 161 TAXMAN 218 (SC) AND T. ASHOK PAI , 292 ITR 11 (SC) . BASED ON THE FACT THAT THE TWO EXPRESSIONS HAVE DIFFERENT CONNOTATIONS, THE TRIBUNAL IN I TS DECISION DATED 28.04.2017 (SUPRA) DEDUCED THAT IT IS IMPERATIVE FOR THE ASSESSEE TO BE MADE AWARE AS TO WHICH OF THE TWO LIMBS IS BEING PUT AGAINST HIM FOR THE PURPOSE OF LEVY OF PENALTY U/S 271(1)(C) OF THE ACT SO THAT THE ASSESSEE CAN DEFEND ACCORDING LY. 10. AT THIS STAGE, WE MAY REFER TO THE FOLLOWING DISCUSSION BY THE HON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF SMT. BAISETTY REVATHI (SUPRA) : - ON PRINCIPLE, WHEN PENALTY PROCEEDINGS ARE SOUGHT TO BE INITIATED BY THE REVENUE UNDER SECTION 271(1)(C) OF THE ACT OF 1961, THE SPECIFIC GROUND WHICH FORMS THE FOUNDATION THEREFOR HAS TO BE SPELT OUT IN CLEAR TERMS. OTHERWISE, AN ASSESSEE WOULD NOT HAVE PROPER OPPORTUNITY TO PUT FORTH HIS DEFENCE. WHE N THE PROCEEDINGS ARE PENAL IN NATURE, RESULTING IN IMPOSITION OF PENALTY RANGING FROM 100% TO 300% OF THE TAX LIABILITY, THE CHARGE MUST BE UNEQUIVOCAL AND UNAMBIGUOUS. WHEN THE CHARGE IS EITHER CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCU RATE PARTICULARS THEREOF, THE REVENUE MUST SPECIFY AS TO WHICH ONE OF THE TWO IS SOUGHT TO BE PRESSED INTO SERVICE AND CANNOT BE PERMITTED TO CLUB BOTH BY INTERJECTING AN OR BETWEEN THE TWO, AS IN THE PRESENT CASE. THIS AMBIGUITY IN THE SHOW - CAUSE NOTICE IS FURTHER COMPOUNDED PRESENTLY BY THE CONFUSED FINDING OF THE ASSESSING OFFICER THAT HE WAS SATISFIED THAT THE ASSESSEE WAS GUILTY OF BOTH. 9 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. THE AFORESAID OBSERVATIONS OF T HE HON'BLE ANDHRA PRADESH HIGH COURT CLEARLY FORTIFY THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF MEHERJEE CASSINATH HOLDINGS PRIVATE LIMITED (SUPRA) WHEREIN IT HAS BEEN HELD THAT NON - STRIKING - OFF OF IRRELEVANT PORTION IN THE NOTICE ISSU ED U/S 274 R.W.S. 271(1)(C) OF THE ACT IS AN ERROR WHICH MAKES THE NOTICE SUFFER FROM THE VICE OF NON - APPLICATION OF MIND, AND IS TO BE TREATED AS INVALID. WE ARE TEMPTED TO REPRODUCE HEREINAFTER THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL, WHICH RE ADS AS UNDER : - 8. ..............................THEREFORE, IF THE TWO EXPRESSIONS, NAMELY CONCEALMENT OF THE PARTICULARS OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME HAVE DIFFERENT CONNOTATIONS, IT IS IMPERATIVE FOR THE ASSESSEE TO BE MADE AWARE AS TO WHICH OF THE TWO IS BEING PUT AGAINST HIM FOR THE PURPOSE OF LEVY OF PENALTY U/S 271(1)(C) OF THE ACT, SO THAT THE ASSESSEE CAN DEFEND ACCORDINGLY. IT IS IN THIS BACKGROUND THAT ONE HAS TO APPRECIATE THE PRELIMINARY PLEA OF ASSESSEE, W HICH IS BASED ON THE MANNER IN WHICH THE NOTICE U/S 274 R.W.S. 271(1)(C) OF THE ACT DATED 10.12.2010 HAS BEEN ISSUED TO THE ASSESSEE - COMPANY. A COPY OF THE SAID NOTICE HAS BEEN PLACED ON RECORD AND THE LEARNED REPRESENTATIVE CANVASSED THAT THE SAME HAS BE EN ISSUED BY THE ASSESSING OFFICER IN A STANDARD PROFORMA, WITHOUT STRIKING OUT THE IRRELEVANT CLAUSE. IN OTHER WORDS, THE NOTICE REFERS TO BOTH THE LIMBS OF SEC. 271(1)(C) OF THE ACT, NAMELY CONCEALMENT OF THE PARTICULARS OF INCOME AS WELL AS FURNISHING OF INACCURATE PARTICULARS OF INCOME. QUITE CLEARLY, NON - STRIKING - OFF OF THE IRRELEVANT LIMB IN THE SAID NOTICE DOES NOT CONVEY TO THE ASSESSEE AS TO WHICH OF THE TWO CHARGES IT HAS TO RESPOND. THE AFORESAID INFIRMITY IN THE NOTICE HAS BEEN SOUGHT TO BE D EMONSTRATED AS A REFLECTION OF NON - APPLICATION OF MIND BY THE ASSESSING OFFICER, AND IN SUPPORT, REFERENCE HAS BEEN MADE TO THE FOLLOWING SPECIFIC DISCUSSION IN THE ORDER OF HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA): - 10 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. 83. IT IS OF SO ME SIGNIFICANCE THAT IN THE STANDARD PROFORMA USED BY THE ASSESSING OFFICER IN ISSUING A NOTICE DESPITE THE FACT THAT THE SAME POSTULATES THAT INAPPROPRIATE WORDS AND PARAGRAPHS WERE TO BE DELETED, BUT THE SAME HAD NOT BEEN DONE. THUS, THE ASSESSING OFFIC ER HIMSELF WAS NOT SURE AS TO WHETHER HE HAD PROCEEDED ON THE BASIS THAT THE ASSESSEE HAD CONCEALED HIS INCOME OR HE HAD FURNISHED INACCURATE PARTICULARS. EVEN BEFORE US, THE LEARNED ADDITIONAL SOLICITOR GENERAL WHILE PLACING THE ORDER OF ASSESSMENT LAID EMPHASIS THAT HE HAD DEALT WITH BOTH THE SITUATIONS. 84. THE IMPUGNED ORDER, THEREFORE, SUFFERS FROM NON - APPLICATION OF MIND. IT WAS ALSO BOUND TO COMPLY WITH THE PRINCIPLES OF NATURAL JUSTICE. (SEE MALABAR INDUSTRIAL CO. LTD. V. CIT *2000+ 2 SCC 718+ 9. FACTUALLY SPEAKING, THE AFORESAID PLEA OF ASSESSEE IS BORNE OUT OF RECORD AND HAVING REGARD TO THE PARITY OF REASONING LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA), THE NOTICE IN THE INSTANT CASE DOES SUFFER FROM THE VIC E OF NON - APPLICATION OF MIND BY THE ASSESSING OFFICER. IN FACT, A SIMILAR PROPOSITION WAS ALSO ENUNCIATED BY THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF M/S. SSAS EMERALD MEADOWS (SUPRA) AND AGAINST SUCH A JUDGMENT, THE SPECIAL LEAVE PETITION FILED B Y THE REVENUE HAS SINCE BEEN DISMISSED BY THE HON'BLE SUPREME COURT VIDE ORDER DATED 5.8.2016, A COPY OF WHICH IS ALSO PLACED ON RECORD. 10. IN FACT, AT THE TIME OF HEARING, THE LD. CIT - DR HAS NOT DISPUTED THE FACTUAL MATRIX, BUT SOUGHT TO POINT OUT THAT THERE IS DUE APPLICATION OF MIND BY THE ASSESSING OFFICER WHICH CAN BE DEMONSTRATED FROM THE DISCUSSION IN THE ASSESSMENT ORDER, WHEREIN AFTER DISCUSSING THE REASONS FOR THE DISALLOWANCE, HE HAS RECORDED A SATISFACTION THAT PENALTY PROCEEDINGS ARE INITIATE D U/S 271(1)(C) OF THE ACT FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OUR CONSIDERED OPINION, THE ATTEMPT OF THE LD. CIT - DR TO DEMONSTRATE APPLICATION OF MIND BY THE ASSESSING OFFICER IS NO DEFENCE INASMUCH AS THE HON'BLE SUPREME COURT HAS APP ROVED THE FACTUM OF NON - STRIKING OFF OF THE IRRELEVANT CLAUSE IN THE NOTICE AS REFLECTIVE OF NON - APPLICATION OF MIND BY THE ASSESSING OFFICER. SINCE THE FACTUAL MATRIX IN THE PRESENT CASE CONFORMS TO THE PROPOSITION LAID DOWN BY THE 11 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. HON'BLE SUPREME COURT, WE PROCEED TO REJECT THE ARGUMENTS ADVANCED BY THE LD. CIT - DR BASED ON THE OBSERVATIONS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. FURTHER, IT IS ALSO NOTICEABLE THAT SUCH PROPOSITION HAS BEEN CONSIDERED BY THE HON'BLE BOMBAY HIGH COURT ALSO IN TH E CASE OF SHRI SAMSON PERINCHERY, ITA NOS. 1154, 953, 1097 & 1126 OF 2014 DATED 5.1.2017 (SUPRA) AND THE DECISION OF THE TRIBUNAL HOLDING LEVY OF PENALTY IN SUCH CIRCUMSTANCES BEING BAD, HAS BEEN APPROVED. 11. APART FROM THE AFORESAID, THE LD. CIT - DR MADE AN ARGUMENT BASED ON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SMT. KAUSHALYA & OTHERS, 216 ITR 660 (BOM.) TO CANVASS SUPPORT FOR HIS PLEA THAT NON - STRIKING OFF OF THE IRRELEVANT PORTION OF NOTICE WOULD NOT INVALIDATE THE IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT. WE HAVE CAREFULLY CONSIDERED THE SAID ARGUMENT SET - UP BY THE LD. CIT - DR AND FIND THAT A SIMILAR ISSUE HAD COME UP BEFORE OUR COORDINATE BENCH IN THE CASE OF DR. SARITA MILIND DAVARE (SUPRA). OUR COORDINATE BENCH, AFTER C ONSIDERING THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SMT. KAUSHALYA & ORS., (SUPRA) AS ALSO THE JUDGMENTS OF THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA) AND DHARMENDRA TEXTILE PROCESSORS, 306 ITR 277 (SC) DEDUCED AS UNDER : - 12. A COMBINED READING OF THE DECISION RENDERED BY HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT. B KAUSHALYA AND OTHERS (SUPRA) AND THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF DILIP N SHROFF (SUPRA) WOULD MAKE IT CLEAR THAT THE RE SHOULD BE APPLICATION OF MIND ON THE PART OF THE AO AT THE TIME OF ISSUING NOTICE. IN THE CASE OF LAKHDIR LALJI (SUPRA), THE AO ISSUED NOTICE U/S 274 FOR CONCEALMENT OF PARTICULARS OF INCOME BUT LEVIED PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE HONBLE GUJARAT HIGH COURT QUASHED THE PENALTY SINCE THE BASIS FOR THE PENALTY PROCEEDINGS DISAPPEARED WHEN IT WAS HELD THAT THERE WAS NO SUPPRESSION OF INCOME. THE HONBLE KERALA HIGH COURT HAS STRUCK DOWN THE PENALTY IMPOSED IN THE CASE OF N .N.SUBRAMANIA IYER VS. UNION OF INDIA (SUPRA), WHEN THERE IS NO INDICATION IN THE NOTICE FOR WHAT CONTRAVENTION THE PETITIONER WAS CALLED UPON TO SHOW CAUSE WHY A PENALTY SHOULD NOT BE IMPOSED. IN THE INSTANT CASE, THE AO DID NOT SPECIFY THE CHARGE FOR WHI CH PENALTY PROCEEDINGS WERE INITIATED 12 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. AND FURTHER HE HAS ISSUED A NOTICE MEANT FOR CALLING THE ASSESSEE TO FURNISH THE RETURN OF INCOME. HENCE, IN THE INSTANT CASE, THE ASSESSING OFFICER DID NOT SPECIFY THE CHARGE FOR WHICH THE PENALTY PROCEEDINGS WERE INI TIATED AND ALSO ISSUED AN INCORRECT NOTICE. BOTH THE ACTS OF THE AO, IN OUR VIEW, CLEARLY SHOW THAT THE AO DID NOT APPLY HIS MIND WHEN HE ISSUED NOTICE TO THE ASSESSEE AND HE WAS NOT SURE AS TO WHAT PURPOSE THE NOTICE WAS ISSUED. THE HONBLE BOMBAY HIGH CO URT HAS DISCUSSED ABOUT NON - APPLICATION OF MIND IN THE CASE OF KAUSHALYA (SUPRA) AND OBSERVED AS UNDER: - ....THE NOTICE CLEARLY DEMONSTRATED NON - APPLICATION OF MIND ON THE PART OF THE INSPECTING ASSISTANT COMMISSIONER. THE VAGUENESS AND AMBIGUITY IN T HE NOTICE HAD ALSO PREJUDICED THE RIGHT OF REASONABLE OPPORTUNITY OF THE ASSESSEE SINCE HE DID NOT KNOW WHAT EXACT CHARGE HE HAD TO FACE. IN THIS BACK GROUND, QUASHING OF THE PENALTY PROCEEDINGS FOR THE ASSESSMENT YEAR 1967 - 68 SEEMS TO BE FULLY JUSTIFIED. IN THE INSTANT CASE ALSO, WE ARE OF THE VIEW THAT THE AO HAS ISSUED A NOTICE, THAT TOO INCORRECT ONE, IN A ROUTINE MANNER. FURTHER THE NOTICE DID NOT SPECIFY THE CHARGE FOR WHICH THE PENALTY NOTICE WAS ISSUED. HENCE, IN OUR VIEW, THE AO HAS FAILED TO A PPLY HIS MIND AT THE TIME OF ISSUING PENALTY NOTICE TO THE ASSESSEE. 12. THE AFORESAID DISCUSSION CLEARLY BRINGS OUT AS TO THE REASONS WHY THE PARITY OF REASONING LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA) IS TO PREVAI L. FOLLOWING THE DECISION OF OUR COORDINATE BENCH IN THE CASE OF DR. SARITA MILIND DAVARE (SUPRA), WE HEREBY REJECT THE AFORESAID ARGUMENT OF THE LD. CIT - DR. 1 1 . ON THIS ASPECT, A PLEA HAS BEEN RAISED BY THE REVENUE, WHICH IS BASED ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF MAK DATA P. LTD . VS. CIT, 358 ITR 593 (SC) . NOTABLY, THE SAID DECISION HAS BEEN CONSIDERED BY THE HON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF SMT. BAISETTY 13 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. REVATHI (SUPRA) AND IT IS OBSERVED THAT THE CONTROVERSY IN HAND WAS NOT BEFORE THE HON'BLE SUPREME COURT. IN THE CASE OF MAK DATA P. LTD . (SUPRA), THE HON'BLE SUPREME COURT OBSERVED THAT THE ASSESSING OFFICER WAS NOT RE QUIRED TO RECORD HIS SATISFACTION IN A PARTICULAR MANNER WHILE IMPOSING THE PENALTY. OSTENSIBLY, AND AS NOTED BY THE HON'BLE ANDHRA PRADESH HIGH COURT, THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF MAK DATA P. LTD. (SUPRA) DOES NOT MILITATE AGA INST THE REASONING ADOPTED BY THE TRIBUNAL IN THE CASE OF MEHERJEE CASSINATH HOLDINGS PRIVATE LIMITED (SUPRA) . 1 2 . IN THE BACKGROUND OF THE ABOVE LEGAL POSITION , WE MAY NOW PROCEED TO EXAMINE THE FACTUAL MATRIX IN THE PRESENT CASE. FOR THAT MATTER, WE START WITH THE ASSESSMENT ORDER PASSED U/S 144C(4)(A) R.W.S. 143(3) R.W.S. 153A OF THE ACT DATED 30.03.2015 WHEREIN FIVE ADDITIONS HAVE BEEN MADE ON ACCOUNT OF (I) INADMISSIBLE PAYMENTS TO DOCTORS UNDER THE HEAD SALE PROMOTION RS.7,08,11,326/ - ; (II) PE RSONAL EXPENSES DEBITED IN THE ACCOUNT BOOKS ACCRUED RS.37,40,000/ - ; (III) EXCESS CLAIM U/S 35(2)(AB) FOR RESEARCH & DEVELOPMENT RS.9,15,58,910/ - ; (IV) UNEXPLAINED/BOGUS PURCHASES ON REVENUE ACCOUNT RS.5,84,24,786/ - ; AND, (V) UNEXPLAINED/BOGUS PURCHA SES ON CAPITAL ACCOUNT RS.23,47,637/ - , ALL TOTALLING TO RS.22,68,82,660/ - . THE RELEVANT DISCUSSION AT THE END OF EACH OF THE ADDITION REVEAL S AN OBSERVATION BY THE ASSESSING OFFICER TO THE EFFECT THAT PENALTY U/S 271(1)(C) IS INITIATED FOR FURNISHING O F INACCURATE PARTICULARS AND CONCEALMENT OF INCOME . EVEN IN THE PENULTIMATE PARA OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS DIRECTED THAT ISSUE NOTICE U/S 274 R.W.S. 271(1)(C) OF THE INCOME TAX ACT, 1961 FOR FURNISHING OF INACCURATE PARTICULARS & CONCEALMENT OF INCOME . THUS, THE ASSESSMENT ORDER SPEAKS OF SATISFACTION OF THE ASSESSING OFFICER THAT ASSESSEE HAS FALLEN WITHIN THE PURVIEW OF SEC. 271(1)(C) OF THE ACT ON 14 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. ACCOUNT OF HAVING FURNISHED INACCURATE PARTICULARS AS WELL AS CONCEALMENT OF I NCOME. IN FACT, HE CONCLUDE S IN THE PENULTIMATE PARA TO ISSUE NOTICE U/S 274 R.W.S. 271(1)(C) OF THE ACT FOR FURNISHING OF INACCURATE PARTICULARS AND FOR CONCEALMENT OF INCOME. NOW, WE MAY EXAMINE THE NOTICE ISSUED BY THE ASSESSING OFFICER U/S 274 R.W.S. 271(1)(C) OF THE ACT OF EVEN DATE, A COPY OF WHICH IS PLACED AT PAGE 3 OF THE PAPER BOOK. THE SAID NOTICE IS IN A STANDARD FORM AND ITS RELEVANT PORTION READS AS UNDER: - *HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR ........................... FURN ISHED INACCURATE PARTICULARS OF SUCH INCOME. QUITE CLEARLY, IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER FORMULATE S THE CHARGE AGAINST THE ASSESSEE AS BEING OF FURNISHING OF INACCURATE PARTICULARS AS WELL AS CONCEALMENT OF INCOME, WHEREAS IN THE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT ON THE SAME DATE, HE DEPICTS A CONTRARY MIND. IN FACT, IN THE NOTICE, THERE IS AN INTERJECTION OF OR BETWEEN THE EXPRESSIONS CONCEALED THE PARTICULARS OF YOUR INCOME AND FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. THUS, ON A CONJOINT READING OF THE ASSESSMENT ORDER AND THE NOTICE ISSUED OF THE SAME DATE, NON - APPLICATION OF MIND BY THE ASSESSING OFFICER IS QUITE PALPABLE. THE AFORESAID FACTUAL MATRIX IS ON ALL FOURS WITH THE CASE OF SMT. BAISETTY REVATHI (SUPRA) CONSIDERED BY THE HON'BLE ANDHRA PRADESH HIGH COURT WHEREIN ALSO, WHILE THE ASSESSING OFFICER WAS SATISFIED IN THE ASSESSMENT ORDER THAT ASSESSEE WAS GUILTY ON BOTH LIMBS, BUT IN THE NOTICE ISSUED U/S 274 R.W.S. 271(1)(C) OF THE ACT ON THE SAME DATE, THERE WAS A CONFUSION INASMUCH AS THE TWO LIMBS WERE INTERJECTED BY THE WORD OR. SUCH A SITUATION HAS BEEN UNDERSTOOD BY THE HON'BLE ANDHRA PRADESH HIGH COURT TO BE AN AMBIGUITY IN ISSUANCE OF NOTICE AND UPHELD THE 15 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. DECISION OF THE TRIBUNAL OF TREATING THE IMPOSITION OF PENALTY AS INVALID IN SUCH A SITUATION. IN OUR CONSIDERED OPINION, THE FACTUAL MATRIX IN THE PRESENT CASE IS DIRECTLY GOVERNED BY THE RATIO OF THE JUDGMENT OF HON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF SMT. BAISETTY REVAT HI (SUPRA) AND ASSESSEE DESERVES TO SUCCEED ON THIS ASPECT ITSELF. 1 3 . INSOFAR AS THE STAND OF THE CIT(A) THAT A MISTAKE IN THE NOTICE ISSUED WOULD NOT INVALIDATE THE NOTICE IS CONCERNED, THE SAME DOES NOT MERIT ACCEPTANCE IN VIEW OF THE DECISION OF THE H ON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF SMT. BAISETTY REVATHI (SUPRA) AND OTHER PRONOUNCEMENTS REFERRED EARLIER. ON THIS ASPECT, WE MAY ALSO REFER TO THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SHRI SAMSON PERINCHERY, ITA NOS. 115 4 OF 2014, 953 OF 2014, 1097 OF 2014 & 1226 OF 2014 DATED 05.01.2017 WHEREIN THE FACTUM OF INITIATION OF PROCEEDINGS ON ONE LIMB AND IMPOSITION OF PENALTY ON THE OTHER LIMB HAS NOT BEEN FOUND TO BE LEGALLY TENABLE. THEREFORE, IN VIEW OF THE PARITY OF REAS ONING FLOWING FROM THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SHRI SAMSON PERINCHERY (SUPRA) , WE ARE UNABLE TO ACCEPT THE STAND OF THE CIT(A) THAT THE MISTAKE IN ISSUE OF NOTICE DOES NOT INVALIDATE THE PENALTY PROCEEDINGS. THEREFORE, ON THIS ASPECT, WE UPHELD THE STAND OF THE ASSESSEE. ACCORDINGLY, IN VIEW OF OUR AFORESAID DISCUSSION, THE NOTICE ISSUED BY THE ASSESSING OFFICER U/S 274 R.W.S. 271(1)(C) OF THE ACT DATED 30.03.2015 IS UNTENABLE AS IT IS AMBIGUOUS, THUS, SUFFERING FROM THE V ICE OF NON - APPLICATION OF MIND HAVING REGARD TO THE RATIO OF THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF (SUPRA) AND ALSO THE JUDGMENT OF THE HON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF SMT. BAISETTY REVATHI (SUPRA) . THUS, ON THIS COUNT ITSELF, THE PENALTY IMPOSED U/S 271(1)(C) OF THE ACT IS LIABLE TO BE DELETED. WE HOLD SO. 16 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. 14 . SINCE THE RIVAL COUNSELS HAVE ALSO ADDRESSED THE BENCH ON MERITS OF THE LEVY, WE MAY ALSO DISCUSS THE SAME HEREINAFTER . ON THIS ASPECT, THE PLEA OF THE ASSESSEE IS THAT, IN ANY CASE, THE ADDITIONS IN QUESTION ARE OTHERWISE GENUINE CLAIMS DULY SUPPORTED BY BILLS AND VOUCHERS AND THEIR DISALLOWANCE DOES NOT MERIT LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. IN ORDER TO APPRECIATE THE STAND OF THE ASSESSE E ON MERITS OF THE ISSUE, A BRIEF BACKGROUND OF THE ADDITIONS MADE CAN BE SUMMARIZED AS FOLLOWS. IN THIS CONTEXT, WE MAY REFER TO THE ASSESSMENT ORDER DATED 30.03.2015 (SUPRA). THE FIRST ADDITION IS OF RS.7,08,11,327/ - , WHICH HAS BEEN DISALLOW ED ON THE G ROUND THAT THE SAME REPRESENTED INADMISSIBLE PAYMENTS TO DOCTORS. THE RELEVANT DISCUSSION IN THE ASSESSMENT ORDER REVEALS THAT THE AMOUNT IS ON ACCOUNT OF PAYMENTS MADE ON GIFT CARDS AND GIFT CHEQUES TO THE DOCTORS , WHICH HAS BEEN OFFERED BY THE ASSESSEE FOR TAXATION AS IT WAS INCLUDED IN THE COMPUTATION OF INCOME FILED IN THE RETURN FILED IN RESPONSE TO THE NOTICE ISSUED U/S 153A(1) OF THE ACT. THE SECOND ADDITION IS WITH REGARD TO FEE PAID TO ECO - MONDIAL SCHOOL OF RS.37,40,000/ - WHICH HAS BEEN DISALLOWE D AS BEING PERSONAL IN NATURE. THE THIRD ADDITION IS WITH REGARD TO THE DISALLOWANCE OF PURCHASES OF RS.5,84,24,786/ - REPRESENTING PURCHASES EFFECTED FROM DEALERS WHO WERE LISTED AS HAWALA /SUSPECTED DEALERS ON THE WEBSITE OF VAT DEPARTMENT OF MAHARASHTRA AS NOT BEING GENUINE. THE FOURTH ADDITION IS WITH REGARD TO THE WITHDRAWAL OF DEDUCTION U/S 35(2AB) OF THE ACT OF RS.9,15,58,910/ - REPRESENTING EXPENDITURE INCURRED ON RESEARCH AND DEVELOPMENT ACTIVITIES. THE FIFTH AND THE LAST ADDITION IS WITH REGARD TO REVERSAL OF DEPRECIATION OF RS.23,47,637/ - ON COST OF CAPITAL ASSETS WHICH WERE PURCHASED FROM PARTIES WHO WERE LISTED AS HAWALA PARTIES ON THE 17 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. WEBSITE OF VAT DEPARTMENT OF MAHARASHTRA. ON ALL THESE ADDITIONS, THE PENALTY HAS BEEN LEVIED BY THE ASSESSING OFFICER. 15 . INSOFAR AS THE DISALLOWANCE RELATING TO PAYMENTS TO DOCTORS IS CONCERNED, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THOUGH THE SAME WAS OFFERED FOR TAXA TION IN THE STATEMENT MADE U/S 132(4) OF THE ACT, BUT IT IS NOT AN EXPENDITURE WHICH IS SUMMARILY DISALLOWABLE. EXPLAINING THE NATURE OF EXPENSE, IT HAS BEEN ASSERTED THAT ASSESSEE BEING A PHARMACEUTICAL MANUFACTURING AND MARKETING COMPANY, IT HAS TO PROM OTE ITS BUSINESS BY APPROACHING AND EXPLAINING THE DOCTORS ABOUT ITS PRODUCTS, WHO IN TURN PRESCRIBE THE SAME TO THE PATIENTS. IT HAS BEEN EXPLAINED THAT THE ENTIRE EXPENDITURE INCURRED BY A PHARMACEUTICAL CONCERN ON DOCTORS IS A MARKETING AND SALES PROMO TION EXERCISE WHICH IS NECESSARILY REQUIRED FOR THE PURPOSE OF BUSINESS OF A PHARMACEUTICAL CONCERN AND THUS, THE ENTIRE EXPENDITURE CAN BE CONSTRUED TO BE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF THE BUSINESS OF THE COMPANY. AS PER THE APPELLA NT, IN THE PAST YEAR ALL THESE EXPENSES HAVE BEEN ALLOWED EVEN BY THE DEPARTMENT. IT IS EXPLAINED THAT THE CBDT ISSUED A CIRCULAR NO. 5/2012 DATED 01.08.2012 BASED ON THE AMENDMENT S IN THE INDIAN MEDICAL COUNCIL (PROFESSIONAL CONDUCT, ETIQUETTE AND ETHICS ) REGULATIONS, 2002 ON 10.12.2009 CALLED THE INDIAN MEDICAL COUNCIL (PROFESSIONAL CONDUCT, ETIQUETTE AND ETHICS) (AMENDMENT) REGULATIONS, 2009 LAYING DOWN THAT THE EXPENDITURE INCURRED BY PHARMACEUTICAL COMPANIES ON DOCTORS IS NOT ALLOWABLE AS BUSINESS D EDUCTION , BEING PROHIBITED IN LAW. IT IS CONTENDED THAT THE SAID CIRCULAR IS, IN ANY CASE, NOT APPLICABLE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AS THE PREVIOUS YEAR HAS ENDED PRIOR TO THE DATE OF CIRCULAR , AS ALSO HELD BY THE MUMBAI BENCH OF THE TRI BUNAL IN THE CASE OF SYNCOM FORMULATIONS (I) LTD., 18 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. ITA NOS. 6429 & 6428/MUM/2012 DATED 23.12.2015 . SECONDLY, IT IS CANVASSED THAT THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF PHL PHARMA (P.) LTD., ITA NO. 4605/MUM/2014 DATED 12.01.2017 IN RELATION TO A SSESSMENT YEAR 2010 - 11 HAS HELD THAT SUCH LIKE EXPENDITURE IS NOT IMPAIRED BY EXPLANATION 1 TO SEC. 37(1) OF THE ACT. IT WAS ALSO POINTED OUT THAT THE TRIBUNAL HAS TAKEN INTO CONSIDERATION THE CBDT CIRCULAR DATED 01.08.2012 (SUPRA) AND ALSO THE MCI REGULA TION, 2002 WHICH, ACCORDING TO THE BENCH, PRESCRIBED LIMITS/CURBS ONLY FOR THE MEDICAL PRACTITIONERS AND NOT FOR THE PHARMACEUTICAL COMPANIES. TO THE SIMILAR EFFECT IS THE RELIANCE PLACED BY THE LEARNED REPRESENTATIVE ON THE DECISION OF THE AHMEDABAD BENC H OF THE TRIBUNAL IN THE CASE OF CADILA PHARMACEUTICALS LTD., ITA NOS. 1117/AHD/2012 & 848, 918/AHD/2016 DATED 11.09.2017 . IN VIEW OF THE AFORESAID PRECEDENTS, IT IS SOUGHT TO BE EMPHASISED THAT THOUGH ASSESSEE HAS OFFERED THE SAID EXPENDITURE FOR TAX, BUT THE FACT THAT THE SAME IS OTHERWISE ALLOWABLE IN VIEW OF THE PRECEDENTS WOULD NOT MAKE IT EXIGIBLE FOR LEVY OF PENALTY U /S 271(1)(C) OF THE ACT. 1 6 . SIMILARLY, WITH REGARD TO THE DISALLOWANCE OF RS.37,40,000/ - AS PERSONAL EXPENDITURE, ASSESSEE CONTENDED THAT IT IS INCURRED ON PAYMENT OF FEE TO AN EDUCATIONAL INSTITUTION WHERE ONE OF THE RELATIVES OF THE DIRECTOR WAS STUD YING. IT HAS BEEN EXPLAINED THAT THE EXPENDITURE HAS BEEN INCURRED ON EDUCATION AND WAS CLAIMED AS TRAINING EXPENSE IN THE ACCOUNT BOOKS , AND WAS FULLY DOCUMENTED AND GENUINELY INCURRED . IT HAS BEEN POINTED OUT THAT THOUGH ASSESSEE HAS AN ARGUABLE CASE I N VIEW OF THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SAKAL PAPERS (P.) LTD. VS. CIT, 114 ITR 256 (BOM.) , BUT IT DECIDED TO WITHDRAW THE CLAIM FOR DEDUCTION IN THE STATEMENT 19 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. RECORDED U/S 132(4) OF THE ACT AND INCLUDED THE SAME IN THE RETUR N OF INCOME FILED IN PURSUANCE OF NOTICE U/S 153A(1) OF THE ACT. 1 7 . SIMILARLY, WITH REGARD TO THE DISALLOWANCE OUT OF PURCHASES, THE LEARNED REPRESENTATIVE POINTED OUT THAT THE SAID INCOME WAS OFFERED IN THE STATEMENT U/S 132(4) OF THE ACT MERELY IN THE FACE OF SEARCH PARTY HAVING EXPLAINED THAT THE DEPARTMENT WAS DISALLOW ING PURCHASES MADE FROM PARTIES WHOSE NAMES APPEAR ON THE WEBSITE OF THE SALES TAX DEPAR T MENT AS BEING HAWALA DEALERS. THE LEARNED REPRESENTATIVE POINTED OUT THAT THE SAID ADDITION TO THE RETURNED INCOME EVEN UNDER NORMAL CIRCUMSTANCES DOES NOT INVITE PEN ALTY U/S 271(1)(C) OF THE ACT, AND FOR THAT MATTER, REFER R E D TO THE DECISION OF THE TRIBUNAL IN THE CASE OF CHEMPURE VS. ITO, [2010] 40 SOT 164 (MUMBAI) DATED 07.05.2010 , WHICH HAS BEEN RENDERED UNDER SIMILAR CIRCUMSTANCES. 1 8 . WITH REGARD TO THE DENIAL OF DEDUCTION U/S 35(2AB) OF THE ACT, IT WAS EXPLAINED THAT IN THE COURSE OF SEARCH, THE SEARCH PARTY NOTED THAT THE CLAIM U/S 35(2AB) OF THE ACT ALSO COMPRISED OF EXPENDITURE ON RAW MATERIAL CONSUMED WHICH WAS TRANSFERRED TO THE HEAD RESEARCH AND DEVELOPM ENT EXPENDITURE. THE LEARNED REPRESENTATIVE POINTED OUT THAT SEC. 35(2AB) OF THE ACT ENVISAGES CLAIM WHICH IS BASED NOT ONLY ON DIRECTLY INCURRED EXPENSES OF RESEARCH AND DEVELOPMENT, BUT ALSO IN RELATION TO RAW MATERIAL CONSUMED SO LONG AS THE SAME IS R ELATABLE TO THE RESEARCH AND DEVELOPMENT. IN ANY CASE, THE LEARNED REPRESENTATIVE POINTED OUT THAT THERE IS NO DENYING THE FACT THAT THE IMPUGNED EXPENDITURE ON RAW MATERIAL WAS OTHERWISE ALLOWABLE AS NORMAL BUSINESS EXPENDITURE AND THAT THERE IS NO MATER IAL TO ESTABLISH THAT THE CLAIM WAS FALSE IN ANY MANNER. 20 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. 1 9 . LASTLY, WITH REGARD TO THE DENIAL OF DEPRECIATION, HEREIN ALSO THE LEARNED REPRESENTATIVE POINTED OUT THAT THERE WAS COMPLETE DOCUMENTATION EVIDENCING THE PURCHASES OF CAPITAL GOODS, BUT MERELY BECAUSE SOME OF THE PURCHASES WERE FROM SO - CALLED HAWALA DEALERS, ASSESSEE OFFERED TO TAX THE SAME IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT BECAUSE OF THE SUGGESTION OF THE SEARCH PARTY THAT SUCH PURCHASES ARE BEING TREATED AS UNEXPLAINED BY THE DEP ARTMENT . 20 . ON ALL THESE ASPECTS, THE LD. DR SUBMITTED THAT THE ADDITIONS IN QUESTION HAVE BEEN ADMITTED DURING SEARCH U/S 132(4) OF THE ACT AND THUS, AS PER EXPLANATION 5A TO SEC. 271(1)(C) OF THE ACT, THE SAME CONSTITUTED FURNISHING OF INACCURATE PARTI CULARS OF INCOME. THE LD. DR FURTHER CONTENDED THAT THE ADMISSION/DECLARATION OF INCOME IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153A(1) OF THE ACT WAS NOT VOLUNTARY, AS HELD BY THE ASSESSING OFFICER; BUT, ACCORDING TO HIM, EVEN IF IT IS TAKEN AS A V OLUNTARY DISCLOSURE, IT DOES NOT ABSOLVE THE ASSESSEE FROM IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT. RELIANCE HAS BEEN PLACED ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF MAK DATA P. LTD. VS. CIT (SUPRA) IN THIS REGARD. 21. WE HAVE C AREFULLY CONSIDERED THE RIVAL SUBMISSIONS. FACTUALLY, ONE COMMON THREAD WHICH PERMEATES THROUGH ALL THE ADDITIONS WHICH HAVE BEEN SUBJECT TO PENALTY IS THE FACT THAT THEY HAVE BEEN OFFERED TO TAX IN THE STATEMENT RECORDED IN THE COURSE OF SEARCH U/S 132(4 ) OF THE ACT. IT IS IN THIS LIGHT THE ASSESSING OFFICER AS WELL AS THE LD. DR BEFORE US HAS CONTENDED THAT IN VIEW OF EXPLANATION 5A TO SEC. 271(1)(C) OF THE ACT, ASSESSEE IS DEEMED TO HAVE FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IN THIS CONTEXT , WE 21 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. HAVE PERUSED EXPLANATION 5A, WHICH HAS BEEN INSERTED BY THE FINANCE ( NO. 2 ) ACT, 2009 WITH RETROSPECTIVE EFFECT FROM 01.06.2007. INSOFAR AS IT IS RELEVANT FOR THE PRESENT PURPOSES, THE EXPLANATION PRESCRIBES THAT IF IN THE COURSE OF A SEARCH INITIATE D U/S 132 ON OR BEFORE 01.06.2007, AN ASSESSEE IS FOUND TO BE THE OWNER OF ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT FOR ANY PREVIOUS YEAR ENDING BEFORE THE DATE OF SEARCH AND WHERE THE RETURN OF INCOME FOR SUCH YEAR HAS BEEN FURNISHED BEFORE T HE SAID DATE , BUT NO SUCH INCOME HAS BEEN DECLARED THERE IN , THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN THE RETURN FURNISHED AFTER THE DATE OF SEARCH, FOR THE PURPOSES OF CLAUSE (C) OF SUB - SECTION (1) OF SEC. 271, SUCH ASSESSEE SHALL BE DE EMED TO HAVE CONCEALED THE PARTICULARS OF SUCH INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. ON THE SAID BASIS, IT HAS BEEN CANVASSED THAT THE INCOME ON ACCOUNT OF THE AFORESAID ADDITIONS TOTALLING TO RS.22,68,82,660/ - , WHICH HAS BEEN OFFERED IN THE STATEMENT U/S 132(4) OF THE ACT AT THE TIME OF SEARCH AND WHICH WAS NOT DECLARED IN THE RETURN OF INCOME FILED ON 28.09.2012 , PRIOR TO THE DATE OF SEARCH, BUT HAS BEEN DECLARED IN THE RETURN FILED AFTER THE DATE OF SEARCH U/S 153A(1) OF THE ACT CON STITUTES AN INCOME FOR WHICH INACCURATE PARTICULARS HAVE BEEN FILED. IN OUR CONSIDERED OPINION, THE PRESUMPTION OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS PRESCRIBED IN EXPLANATION 5A TO SEC. 271(1) OF THE ACT DOES COME INTO PLAY IN THE INSTANT CASE, BUT THE MOOT QUESTION IS WHETHER SUCH DEEMING EFFECT IS CONCLUSIVE FOR IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT OR NOT? IT IS QUITE WELL UNDERSTOOD, AND WHICH HAS BEEN EMPHASISED BY THE HON'BLE SUPREME COURT IN THE CASE OF ANANTHARAM VEERASINGHAIAH & CO. V S . CIT , 123 ITR 457 (SC) THAT THE ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE INDEPENDENT AND THE FINDINGS IN THE ASSESSMENT ORDER WOULD NOT BE CONCLUSIVE FOR THE PURPOSE OF LEV Y OF PENALTY U/S 271(1) OF THE 22 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. ACT THOUGH THE SAME MAY BE ONE OF THE RELEVANT CONSIDERATIONS. TO PUT IT DIFFERENTLY, IT IS TO BE NOTED THAT THE MANNER AND THE REASONS FOR ASSESSING AN INCOME IN THE QUANTUM ASSESSMENT PROCEEDINGS WOULD NOT BE CONCLUSIVE BY ITSELF FOR THE PURPOSE OF LEVY OF PENALTY, THOUGH THE SAME MAY BE ONE OF THE RELEVANT CONSIDERATIONS. CONSIDERED IN THIS LIGHT, IF ONE IS TO UNDERSTAND THE IMPORT OF THE FICTION PRESCRIBED BY EXPLANATION 5A TO SEC. 271(1) OF THE ACT, IT WOULD ONLY MEAN T HAT AFTER THE INITIAL PRESUMPTION OF SUCH INCOME BEING REPRESENT AT I VE OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME FOR CLAUSE (C) OF SEC. 271(1) OF THE ACT, THE ONUS SHIFTS ON THE ASSESSEE TO ESTABLISH HAVING REGARD TO THE FACTS AND CIR CUMSTANCES OF THE CASE THAT IT IS NOT IN THE NATURE OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME FOR CLAUSE (C) OF SEC. 271(1) OF THE ACT. IT IS IN THIS BACKGROUND THAT WE HAVE CONSIDERED THE SUBMISSIONS PUT FORTH BY THE ASSESSEE THAT THE ASSESSMENT OF SUCH INCOME BASED ON THE STATEMENT U/S 132(4) OF THE ACT PER SE DOES NOT AUTOMATICALLY INVITE CHARGE OF PENALTY U/S 271(1)(C) OF THE ACT. FIRSTLY, IN RELATION TO THE DISALLOWANCE RELATING TO PAYMENTS TO DOCTORS, CLEARLY SOME OF THE PRECE DENTS CITED BY THE ASSESSEE CLEARLY ESTABLISH THAT ASSESSEE HAD A GOOD CASE ON MERITS TO SUCCEED AND, THEREFORE, WE FIND FORCE IN THE SUBMISSION THAT THE ISSUE IS DEBATABLE AND CANNOT BE SAID TO BE A PATENTLY WRONG CLAIM. SIMILARLY, WITH REGARD TO DISALLO WANCE OF FEES PAID TO EDUCATIONAL INSTITUTION, THE APPELLANT HAD A GOOD ARGUABLE CASE ON MERIT IN VIEW OF THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SAKAL PAPERS (P.) LTD. (SUPRA) AND HEREIN ALSO, WE APPRECIATE THAT THE ASSESSEE COULD NOT BE SAID TO HAVE MADE A TOTALLY WRONG CLAIM. THIRDLY, EVEN WITH REGARD TO THE TREATMENT OF SOME OF THE PURCHASES AS UNEXPLAINED, THE SAME HAS BEEN OFFERED FOR TAXATION BY THE ASSESSEE BASED ON A CONTEMPLATED STAND OF THE ASSESSING AUTHORITY THAT SUCH 23 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. PURC HASES ARE FROM PARTIES LISTED AS HAWALA DEALERS BY THE VAT AUTHORITIES, SAME IS LIABLE TO BE DISALLOWED. WHILE IT MAY BE A GOOD GROUND TO DISALLOW THE SAID EXPENDITURE, BUT DEHORS ANY SPECIFIC INQUIRIES, IT COULD NOT BE SAID THAT THE CASE OF THE ASSESSEE WAS FOUND TO HAVE BEEN CLINCHINGLY FALSE. THE LEARNED REPRESENTATIVE HAD RELIED ON THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF CHEMPURE (SUPRA) WHEREIN UNDER IDENTICAL SITUATION, LEVY OF PENALTY U/S 271(1)(C) OF THE ACT HAS BEEN DELETE D. BE THAT AS IT MAY, SUCH LIKE CASES , THE QUANTUM PROCEEDINGS HAVE REGULARLY COME UP BEFORE THE TRIBUNAL, WHICH ARE GENERALLY BEING DECIDED IN THE LIGHT OF THE RATIO OF THE JUDGMENT OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF SIMIT P. SHETH, 356 ITR 451 (GUJARAT) WHEREIN IT IS HELD THAT WHAT IS FINALLY ASSESSABLE IS THE AMOUNT RELATABLE TO PROFIT ON UNEXPLAINED PURCHASES AND NOT THE ENTIRE AMOUNT. THEREFORE, IT IS NOT A CASE WHERE IT CAN BE SAID THAT THERE IS ANY SPECIFIC EVIDENCE FURNISHED BY THE S EARCH PARTY WHICH SHOWED CLINCHINGLY FALSE PURCHASES MADE BY THE ASSESSEE. SIMILAR IS THE SITUATION WITH REGARD TO DEPRECIATION DENIED ON PURCHASE OF CAPITAL ASSETS FROM SO - CALLED HAWALA/ SUSPICIOUS DEALERS LISTED BY THE VAT AUTHORITIES. ON BOTH THESE POI NTS, WE DO NOT FIND THAT THERE IS MATERIAL TO SAY THAT ASSESSEE HAD FURNISHED INACCURATE PARTICULARS WITHIN THE MEANING OF SEC. 271(1)(C) OF THE ACT. THE LAST ADDITION ON WHICH PENALTY HAS BEEN LEVIED IS THE DENIAL OF DEDUCTION U/S 35(2AB) OF THE ACT TO T HE EXTENT OF RS. 9,15,58,910/ - . AS PER THE WRITTEN SUBMISSION OF THE ASSESSEE BEFORE THE LOWER AUTHORITIES, IT IS REVEALED THAT THE SAID EXPENDITURE WAS INCURRED ON PURCHASE OF RAW MATERIALS WHICH WERE UTILISED DURING THE YEAR. IT WAS NOTICED THAT THE SAI D EXPENDITURE WAS TRANSFERRED TO RESEARCH AND D EVELOPMENT EXPENDITURE HEAD AND, THEREFORE, IT CONSTITUTED A CLAIM U/S 35(2AB) OF THE ACT. THE DISCUSSION IN THE ASSESSMENT ORDER AS WELL AS THE ASSERTIONS IN THE WRITTEN 24 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. SUBMISSION B EFORE THE LOWER AUTHORITI ES REVEAL THAT THE SEARCH PARTY ADVISED THAT THE CLAIM U/S 35(2AB) OF THE ACT MAY NOT BE SUSTAINABLE. THOUGH NO SPECIFIC REASONS HAVE BEEN BROUGHT OUT ON RECORD, BUT BE THAT AS IT MAY, THERE IS NO FINDING AS TO WHY THE CLAIM FOR DEDUCTION OF COST OF RAW M ATERIALS WAS IMPROPER GIVEN THE FACT THAT THERE IS NO ADVERSE FINDING THAT THE RAW MATERIALS WERE NOT CONSUMED FOR THE PURPOSE OF BUSINESS. THUS, ON AN OVERALL CONSIDERATION, WE DO NOT FIND ANY REASON TO IMPOSE PENALTY ON SUCH DISALLOWANCE ALSO. FOR ALL THE ABOVE REASONS, WE, THEREFORE, HOLD THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES AND THE MANNER IN WHICH THE AMOUNTS HAVE BEEN ASSESSED TO TAX , DOES NOT JUSTIFY THE ASSERTIONS OF THE REVENUE THAT IT CONSTITUTES FURNISHING OF INACCURATE PARTICULARS OF INCOME WITHIN THE MEANING OF SEC. 271(1)(C) OF THE ACT. 22. APART FROM ABOVE, APPELLANT HAS RAISED THE FOLLOWING CONTENTIONS (I) THAT CONSEQUENT TO THE ASSESSMENT UNDER SEC. 143(3) R.W.S. 153A OF THE ACT, NO ADDITIONAL TAX IS PAYABLE BY THE ASSESSEE ON THE ADDITIONS MADE TO THE COMPUTATION AS PER THE NORMAL PROVISIONS OF THE ACT, AND FOLLOWING THE REASONING LAID DOWN IN THE CASE OF CIT VS. NALWA SONS INVESTMENT LIMITED , 327 ITR 543 (DELHI) AND, (II) AS PER EXPLANATION 4(C) TO SEC. 271(1)(C) OF THE A CT, TAX SOUGHT TO BE EVADED IS NIL, SINCE NO ADDITIONAL TAX IS PAYABLE CONSEQUENT TO THE ASSESSMENT U/S 143(3) R.W.S. 153A OF THE ACT. TO CANVASS THAT NO PENALTY IS IMPOSABLE IN THE PRESENT CASE. SINCE THE APPELLANT HAS ALREADY SUCCEEDED IN THE FOREGOI NG PARAGRAPHS, THE ABOVE 25 ITA NO. 6882/MUM/2016 M/S. AJANTA PHARMA LTD. CONTENTIONS ARE RENDERED ACADEMIC AND ARE NOT BEING ADJUDICATED FOR THE PRESENT. 23. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 1 9 T H JANUARY, 2018. SD/ - SD/ - (RAM LAL NEGI) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER MUMBAI, DATE : 1 9 T H JANUARY, 2018 *SSL* COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, A BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI