Inject Care Parenterals Pvt. Ltd., Vapi V. DCIT, Circle-2(1)(1), Ahmedabad

ITA 739/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7911 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 23-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Business expenditure; Wrong claim; Corroborative evidences; Revised return; Revenue expenditure; Set aside
• Section: 43B; 201; 274; 28

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV , JUDICIAL MEMBER AND SHRI WASEEM AHMED , ACCOUNTANT MEMBER ./ ITA NO. 739/AHD/2018 / ASSTT. YEAR: 2010 - 2011 INJECT CARE PARENTERALS PVT. LTD. , PLOT NO.130, GIDC, VAPI , GUJARART . PAN : AABCI0232J VS. D.C.I.T. , CIRCLE - 2(1)(1 ) , AHMEDABAD . (APPLICANT) ( RESPON D ENT ) ASSESSEE BY : SHRI MANISH J. SHAH, A.R REVENUE BY : SHRI DILEEP KUMAR , SR.D. R / DATE OF HEARING : 26 / 1 1 / 2019 / DATE OF PRONOUNCEMENT: 23 / 01 /2020 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMM ISSIONER OF INCOME TAX (APPEALS) - 6 , AHMEDABAD DATED 17/01/2018 ( IN SHORT LD.CIT (A) ) ARISING IN THE MATTER OF PENALTY ORDER PASSED UNDER S.271(1)(C) OF THE INCOME TAX ACT, 1961 ( HERE - IN - AFTER REFERRED TO AS 'THE ACT') DT.15 / 03/2013 RELEVANT TO THE ASSESSMENT YEAR 201 0 - 20 11 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. ITA NO.739/AHD/2018 ASSTT. YEAR 2010 - 11 2 1. THE C. I. T. (APPEALS) ERRED IN LAW AND ON FACTS IN CONFIRMING THE PENALTY U/S.271(L)(C) OF THE I.T. ACT, 1961 WITHOUT APPRECIATING THE FACTS AND LAW PROPERLY ON THE FOLLOWING ADDITIONS: (I) DISALLOWANCE OF RS.91,726/ - BEING PAYMENT OF CONSOLIDATED TAX U/S.43B (II) DISALLOWANCE OF RS.2,97,572/ - U/S.36(L)(V) BEING DELAYED PAYMENT OF ESI AND PF (III) DISALLOWANCE OF RS.1,530/ - U/S.36(L)(III) BEING INTEREST PAID ON PURCHASE OF CAPITAL GOODS. (IV) DISALLOWANCE OF RS.14,500/ - U/S.37 BEING PENALTY PAID TO SALES TAX AND EXCISE DEPARTMENT. THE APPELLANT RESERVES ITS RIGHT TO ADD, AMEND, ALTER OR MODIFY ANY OF THE GROUNDS STATED HEREINABOVE EITHER BEFORE OR AT THE TIME OF HEARING. 2. T HE INTERCONNECTED ISSUE RAISED BY THE ASSESSEE IN ALL THE GROUNDS OF APPEAL IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE PENALTY LEVIED BY THE AO UNDER SECTION 271 ( 1 )(C) OF THE ACT ON ADDITION OF RS. 4,05,328/ - . 3. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE PRESENT CASE IS A PRIVATE LIMITED COMPANY AND ENGAGED MANUFACTURING OF PHARMA PRODUCTS . T HE ASSESSMENT FOR THE YEAR UND ER CONSIDERATION WAS COMPLETED UNDER SECTION 143( 3 ) OF THE ACT ORDER DATED 15 - 03 - 2013 AFTER INTER - ALIA MAKING CERTAIN ADDITIONS TO THE TOTAL INCOME OF THE ASSESSEE AS DETAILED UNDER: (A) DISALLOWANCES OF CONSOLIDATED TAX OF RS. 91,726/ - UNDER SECTION 43B (B) DISA LLOWANCES OF RS. 2,97,572/ - UNDER SECTION 36(1)(V) ON ACCOUNT OF DELAYED PAYMENT OF PF/ESI (C) DISALLOWANCES OF INTEREST EXPENSES OF RS. 1,530/ - BEING CAPITAL IN NATURE (D) DISALLOWANCES OF RS. 14,500/ - ON ACCOUNT OF PENALTY TO SALES TAX AND EXCISE DEPARTMENT 3.1 T HE AO DURING THE ASSESSMENT PROCEEDINGS INITIATED THE PENALT Y PROCEEDINGS UNDER SECTION 271( 1 )(C) OF THE ACT ON ACCOUNT OF FURNISHING I N ACCURATE PARTICULAR OF INCOME/ CONCEALMENT OF INCOME WITH RESPECT TO THE ABOVE ADDITIONS. ACCORDINGLY, THE AO SUBS EQUENTLY ISSUED NOTICE UNDER SE CTION 274 READ ITA NO.739/AHD/2018 ASSTT. YEAR 2010 - 11 3 WITH SECTION 271( 1 )(C) OF THE ACT , DATED 15 - 03 - 2013 PROPOSING THE PENALTY FOR THE ADDITIONS AS DISCUSSED ABOVE. 4. THE ASSESSEE IN RESPONSE TO SUCH NOTICE MADE ITS SUBMISSION AS ELABORATED BELOW: A. REGARDI NG THE DISALLOWANCE OF CONSOLIDATED TAX OF RS. 91,726.00 UNDER SECTION 43B OF THE ACT. I. IT HAS CLAIMED AN EXPENDITURE OF RS. 10 ,99,789/ - TOWARDS THE CONSOLIDATED TAX IN ITS PROFIT AND LOSS ACCOUNT WHICH WAS PAID BEFORE FILING THE INCOME TAX RETURN WIT HIN THE DUE DATE AS SPECIFIED UNDER SECTION 139( 1 ) OF THE ACT EXCEPT FOR THE SUM OF RS. 91,7 26 / - WHICH WAS PAID AFTER THE DUE DATE OF FILING THE INCOME T AX R ETURN. THE ASSESSEE FURTHER SUBMITTED THAT THE TAX AUDITOR IN ITS TAX AUDIT REPORT HAS NOT MADE ANY DISALLOWANCE QUA THE CONSOLIDATED EXPENSES PAID AFTER THE DUE DATE. ACCORDINGLY THE ASSESSEE INADVERTENTLY CLAIMED THE DEDUCTION OF RS. 9 1 , 726 / - IN THE YEAR UNDER CONSIDERATION. II. THE ASSESSEE ALSO CLAIMED THAT THE AO HAS NOT ALLOWED THE DEDUCTION OF RS. 9 1 , 726 / - IN THE SUBSEQUENT ASSESSMENT YEAR IN WHICH THE PAYMENT WAS MADE AS P ER THE PROVISIONS OF SECTION 4 3B OF THE ACT. III. ACCORDINGLY, THE ASSESSEE ARGUED THAT IT HAS CLAIMED THE DEDUCTION FOR THE CONSOLIDATED TAX EXPENSES UNDER THE BONA FIDES BE LIEVE. B. REGARDING THE DISALLOWANCE OF RS. 2,97,572.00 UNDER SECTION 36(1)(V) OF THE ACT ON ACCOUNT OF DELAYED PAYMENT OF ESI AND PF I. THE ASSESSEE SUBMITTED THAT THE DEDUCTION WAS CLAIMED UNDER THE BONA FIDES BELIEVE AFTER PLACING RELIANCE ON THE JU DGMENT OF HON BLE DELHI HIGH COURT IN ITA NO.739/AHD/2018 ASSTT. YEAR 2010 - 11 4 THE CASE OF AIMIL LTD REPORTED IN 188 TAXMAN 265. THEREFORE, THE ASSESSEE SHOULD NOT BE VISITED WITH THE PENALTY. C. REGARDING THE DISALLOWANCE OF INTEREST EXPENSES OF RS. 1530.00 BEING CAPITAL IN NATURE I. THE ASSES SEE UNDER THE BONA FIDES BELIEVE CLAIMED THE INTEREST EXPENSES INCURRED ON THE MONEY BORROWED FOR THE ACQUISITION OF CAPITAL ASSET AS REVENUE EXPENDITURE. AS SUCH, ALL THE DETAILS OF THE INTEREST EXPENSES WERE DULY DISCLOSED IN THE FINANCIAL STATEMENTS. TH EREFORE THERE CANNOT BE ANY PENALTY ON ACCOUNT OF CONCEALMENT OF INCOME. D. REGARDING THE DISALLOWANCE OF RS. 14,500.00 ON ACCOUNT OF PENALTY PAYMENT TO SALES TAX AND EXCISE DEPARTMENT I. THE ASSESSEE CLAIMED THAT IT HAS INCURRED THE IMPUGNED EXPENSES IN THE COURSE OF THE BUSINESS WHICH WERE WRONGLY CLASSIFIED AS PENALTY UNDER THE ACCOUNTING HEAD. THEREFORE IT CLAIMED THAT THE DEMAND RAISED BY THE SALES TAX AND EXCISE DEPARTMENT FOR THE AMOUNT OF TAX HAS BEEN TREATED AS PENALTY INADVERTENTLY. ACCORDINGLY THE ASSESSEE CLAIMED THAT THERE CANNOT BE ANY PENALTY ON SUCH AMOUNT ON ACCOUNT OF CONCEALMENT OF INCOME. 5. HOWEVER, THE AO DISAGREED WITH THE CONTENTION OF THE ASSESSEE AND LEVIED THE PENALTY BEING 100% OF THE AMOUNT OF TAX SOUGHT TO BE EVADED ON ABOVE ADDITION OF RS. 4,05,328/ - ONLY. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A). 6 . THE ASS ESSEE BEFORE THE LEARNED CIT (A) SUBMITTED AS UNDER: A. REGARDING THE DISALLOWANCE OF CONSOLIDATED TAX OF RS. 91,726.00 UNDER SECTION 43B OF THE ACT ITA NO.739/AHD/2018 ASSTT. YEAR 2010 - 11 5 I. THE ASSESSEE BEFORE THE LEARNED CIT (A) SUBMITTED THAT IT HAS CLAIMED THE DEDUCTION FOR THE CONSOLIDATED TAX PAID AFTER THE DUE DATE OF FILING THE INCOME TAX RETURN UNDER THE BONA FIDES BELIEVE. MOREOVER, IT HAS NOT CLAIMED ANY DEDUCTION FOR SUCH EXPENSES IN THE SUBSEQUENT YEAR. II. HOWEVER, THE LEARNED CIT (A) DISREGARDED THE CONTENTION OF THE ASSESSEE BY OBSERVING THAT THE ASSESSEE HAS CONCEALED THE PARTICULAR OF INCOME BY CLAIMING THE DEDUCTION FOR THE CONSOLIDATED AMOUNT OF TAX WHICH WAS NOT ELIGIBLE FOR DEDUCTION AS PER THE PROVISIONS OF SECTION 43B OF THE ACT. B. REGARDING THE DISALLOWANCE OF RS. 2,97,572.00 UNDER SECTION 36(1)(V) OF THE ACT ON ACCOUNT OF DELAYED PAYMENT OF ESI AND PF I. THE ASSESSEE BEFORE THE LEARNED CIT (A) CLAIMED THAT THE DED UCTIBILITY OF EMPLOYEE S CONTRIBUTION TOWARDS THE ESI/PF IS DEBATABLE ISSUE. AS SUCH CERTAIN HON BLE HIGH COURTS HAVE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THEREFORE, THE ASSESSEE SHOULD NOT BE VISITED WITH THE PENALTY ON ACCOUNT OF CONCEALMENT OF I NCOME. II. HOWEVER THE LEARNED CIT(A) DISREGARDED WITH THE CONTENTION OF THE ASSESSEE BY OBSERVING THAT THE JURISDICTIONAL HIGH COURT HAS DECIDED THE ISSUE AGAINST THE ASSESSEE IN THE CASE OF CIT VS. GUJARAT STATE ROAD TRANSPORT CORPORATION REPORTED IN 4 1 TAXMAN.COM 100. ACCORDINGLY, HE CONFIRMED THE ORDER OF THE AO. C. REGARDING THE DISALLOWANCE OF INTEREST EXPENSES OF RS. 1530.00 BEING CAPITAL IN NATURE ITA NO.739/AHD/2018 ASSTT. YEAR 2010 - 11 6 I. THE ASSESSEE SUBMITTED THAT THERE IS NOTHING ON RECORD SUGGESTING THAT THE ASSESSEE HAS CONCEALED THE INCOME/FURNISHED INACCURATE PARTICULAR OF INCOME BY CLAIMING THE INTEREST EXPENSES AS REVENUE IN NATURE. II. HOWEVER THE LEARNED CIT (A) DISREGARDED THE CONTENTION OF THE ASSESSEE BY OBSERVING THAT SUCH INTEREST EXPENSES BEING CAPITAL NATURE CANNOT BE CLAIMED AS DEDUCTION IN THE PROFIT AND LOSS ACCOUNT. ACCORDINGLY, THE LEARNED CIT (A) UPHELD THE ORDER OF THE AO. D. REGARDING THE DISALLOWANCE OF RS. 14,5 00.00 ON ACCOUNT OF PENALTY PAYMENT TO SALES TAX AND EXCISE DEPARTMENT I. THE ASSESSEE BEFORE THE LD. CIT - A SUBMITTED THAT IT HAS INCURRED THE IMPUGNED EXPENSES IN THE COURSE OF THE BUSINESS WHICH WERE WRONGLY CLASSIFIED AS PENALTY UNDER THE ACCOUNTING HE AD. THE ASSESSEE F URTHER SUBMITTED THAT THE CONTRARY VIEW TAKEN BY THE AO FOR MAKING THE ADDITION DOES ATTRACT THE PENALTY. II. HOWEVER, THE LEARNED CIT (A) DISREGARDED THE CONTENTION OF THE ASSESSEE BY OBSERVING THAT THE PENALTIES CLAIMED BY THE ASSESSE E ARE NOT ALLOWABLE DEDUCTION. THUS THE ASSESSEE BY CLAIMING THE DEDUCTION HAS FURNISHED INACCURATE PARTICULAR OF INCOME/CONCEALED PARTICULAR OF INCOME. ACCORDINGLY THE LEARNED CIT (A) UPHELD THE ORDER OF THE AO. BEING AGGRIEVED BY THE ORDER OF THE LEARN ED CIT (A), THE ASSESSEE IS IN APPEAL BEFORE US. 7. THE LEARNED AR BEFORE US REITERATED THE SUBMISSIONS AS MADE BEFORE THE AUTHORITIES BELOW WHEREAS THE LEARNED DR BEFORE US VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. ITA NO.739/AHD/2018 ASSTT. YEAR 2010 - 11 7 8 . WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. NOW, WE PROCEED TO ADJUDICATE EACH ADDITION/ITEMS WITH RESPECT TO WHICH THE PENALTY WAS LEVIED. A. REGARDING THE DISALLOWANCE OF CONSOLIDATED TAX OF RS . 91,726.00 UNDER SECTION 43B OF THE ACT. I. ADMITTEDLY, THE AMOUNT OF CONSOLIDATED TAX WAS NOT ELIGIBLE FOR DEDUCTION AS PER THE PROVISIONS OF SECTION 43B OF THE ACT. BUT, THE SAME WAS ELIGIBLE FOR DEDUCTION ON PAYMENT BASIS IN THE SUBSEQUENT ASSESSMEN T YEAR AS THE PAYMENT MADE BY THE ASSESSEE FALLS IN THE SUBSEQUENT ASSESSMENT YEAR. HOWEVER, NEITHER THE ASSESSEE NOR THE AO HAS CLAIMED/ALLOWED THE DEDUCTION IN THE SUBSEQUENT ASSESSMENT YEAR. II. UNDISPUTEDLY, THE CLAIM MADE BY THE ASSESSEE IN THE PROF IT AND LOSS ACCOUNT WAS NOT THE FALSE CLAIM. AS SUCH, THE CLAIM MADE BY THE ASSESSEE WAS DISALLOWED BY THE OPERATION OF LAW I.E. UNDER THE PROVISION OF SECTION 43B OF THE ACT. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT SUCH CLAIM OF THE ASSESSEE CAN BE REGARDED AS A WRONG CLAIM BUT THE SAME CANNOT BE EQUATED WITH THE CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULAR OF INCOME. THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEE CANNOT BE VISITED WITH THE PENALTY ON ACCOUNT OF CONCEALMENT OF INCOME. B. REGARDING THE DISALLOWANCE OF RS. 2,97,572.00 UNDER SECTION 36(1)(V) OF THE ACT ON ACCOUNT OF DELAYED PAYMENT OF ESI AND PF I. THE ASSESSEE IN THE PRESENT CASE HAS FILED HIS REVISED RETURN OF INCOME DA TED 18 - 04 - 2011 CLAIMING THE DEDUCTION OF THE AFORE SAID AMOUNT WHEREAS THE JUDG MENT OF HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. GUJARAT STATE ROAD TRANSPORT CORPORATION (SUPRA) WAS RENDERED DATED 26 - 12 - 2013. THUS IT IS EVIDENT THAT, THE ASS ESSEE WAS NOT AWARE OF THE JUDG MENT RELIED BY THE L EARNED ITA NO.739/AHD/2018 ASSTT. YEAR 2010 - 11 8 CIT (A) WHILE IMPOSING THE PENALTY ON ACCOUNT OF CONCEALMENT OF INC OME. WE ALSO NOTE THAT THE JUDG MENT OF HON BLE DELHI HIGH COURT IN THE CASE OF AIMIL LTD WAS IN FAVOUR OF THE ASSESSEE WHICH WAS RENDERED DATED 23 - 12 - 2009 I.E. BEFORE FILING THE RETU RN OF INCOME BY THE ASSESSEE. ACCORDINGLY, WE FIND THAT THE ASSESSEE HAS CLAIMED THE DEDUCTION UNDER THE BONA FIDES BELIEVE. HENCE, WE HOLD THAT THE ASSESSEE CANNOT BE VISITED WITH THE PENALTY IN THE GIVEN FACTS AND CIRCUMSTANCES ON ACCOUNT OF CONCEALMENT OF INCOME. C. REGARDING THE DISALLOWANCE OF INTEREST EXPENSES OF RS. 1530.00 BEING CAPITAL IN NATURE I. THE PROVISIONS OF SECTION 36(1)(III) MANDATES TO MAKE THE DISALLOWANCE OF THE INTEREST EXPENSES INCURRED ON THE ACQUISITION OF ASSETS IN CONNECTION WI TH THE EXPANSION/EXTENSION OF EXISTING BUSINESS PROVIDED SUCH ASSET WAS NOT PUT TO USE. THE RELEVANT PROVISION AS APPLICABLE FOR THE YEAR UNDER CONSIDERATION READS AS UNDER: OTHER DEDUCTIONS. 36. (1) THE DEDUCTIONS PROVIDED FOR IN THE FOLLOWING CLAUSES SHALL BE ALLOWED IN RESPECT OF THE MATTERS DEALT WITH THEREIN, IN COMPUTING THE INCOME REFERRED TO IN SECTION 28 ( I ) ******* ( IA ) ******** [( IB ) ** ***** ( II ) ******* ( III ) THE AMOUNT OF THE INTEREST 25 PAID IN RESPECT OF CAPITAL 25 BORROWED FOR THE PURPOSES OF THE BUSINESS 25 OR PROFESSION : PROVIDED THAT ANY AMOUNT OF THE INTEREST PAID, IN RESPECT OF C APITAL BORROWED FOR ACQUISITION OF AN ASSET FOR EXTENSION OF EXISTING BUSINESS OR PROFESSION (WHETHER CAPITALISED IN THE BOOKS OF ACCOUNT OR NOT); FOR ANY PERIOD BEGINNING FROM THE DATE ON WHICH THE CAPITAL WAS BORROWED FOR ACQUISITION OF THE ASSET TILL THE DATE ON WHICH SUCH ASSET WAS FIRST PUT TO USE, SHALL NOT BE ALLOWED AS DEDUCTION .] II. FROM THE ORDER OF THE AUTHORITIES BELOW, WE NOTE THAT THERE IS NO ALLEGATION THAT THE IMPUGNED INTEREST EXPENSE WAS INCURRED IN CONNECTION WITH THE EXTENSION OF THE EXISTING BUSINESS OF THE ASSESSEE. THEREFORE, THE MERE CLAIM OF INT EREST EXPENSES AS REVENUE IN NATURE CANNOT BE EQUATED WITH THE CONCEALMENT/ INACCURATE PARTICULAR OF INCOME. AS SUCH, THE ASSESSEE HAS DISCLOSED ALL THE ITA NO.739/AHD/2018 ASSTT. YEAR 2010 - 11 9 MATERIAL FACTS IN THE FINANCIAL STATEMENTS AND FURTHERMORE ITS CLAIM WAS NOT FOUND TO BE FALSE. THUS WE HOLD THAT, THE ASSESSEE HAS CLAIMED DEDUCTION FOR SUCH INTEREST EXPENSES UNDER THE BONA FIDES BELIEVE AND THEREFORE THERE CANNOT BE ANY PENALTY ON ACCOUNT OF CONCEALMENT OF INCOME. D. REGARDING THE DISALLOWANCE OF RS. 14,500.00 ON ACCOUNT OF PENALTY PAYMENT TO SALES TAX AND EXCISE DEPARTMENT I. ADMITTEDLY, THE PENALTIES LEVIED ON ACCOUNT OF CONTRAVENTION OF THE PROVISIONS OF LAW ARE NOT ALLOWABLE FOR DEDUCTION. BUT THE PENALTY WHICH IS COMPENSATORY IN NATURE CAN BE CLAIMED AS BUSINESS EXPENSES. HOWEV ER, WE NOTE THAT THERE IS NO SUCH FINDING GIVEN BY THE AUTHORITIES BELOW ON SUCH ASPECT. MOREOVER, WE NOTE THAT THE ASSESSEE HAS FURNISHED ALL THE REQUISITE DETAILS IN ITS FINANCIAL STATEMENTS AND THEREFORE IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED PARTICULAR OF INCOME. AS SUCH THE ASSESSEE HAS CLAIMED THE DEDUCTION UNDER THE BONA FIDES BELIEVE. II. IN VIEW OF THE ABOVE WE HOLD THAT THE PENALTY CAN BE LEVIED WHERE THE ASSESSEE HAS CONCEALED THE PARTICULAR OF INCOME/FURNISHED INACCURATE PARTICULAR OF INCOME. HOWEVER, FROM THE PRECEDING DISCUSSION WE NOTE THAT NONE OF THE DEDUCTION CLAIMED BY THE ASSESSEE HAS BEEN HELD AS FALSE. THUS AT THE MOST, THE CLAIM MADE BY THE ASSESSEE CAN BE WRONG/INACCURATE CLAIMS WHICH CANNOT BE TREATED AS CONCEALMENT/INAC CURATE PARTICULAR OF INCOME. IN HOLDING SO WE FIND SUPPORT AND GUIDE FROM THE JUDGMENT OF HON BLE SUPREME COURT IN CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. REPORTED IN 322 ITR 158 WHERE IT WAS HELD AS UNDER: THE WORD 'PARTICULARS' MUST MEAN THE DETAILS SUPPLIED IN THE RETURN , WHICH ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. IN THE INSTANT CASE, THERE WAS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. S UCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)( C ). A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS REGARDING THE INCOME OF THE AS SESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. ITA NO.739/AHD/2018 ASSTT. YEAR 2010 - 11 10 III. WE ALSO NOTE THAT THERE WAS NO MALA - FIDE INTENTION OF THE ASSESSEE TO FURNISH THE INACCURATE/ CONCEAL THE PARTICULARS OF INCOME. SO THERE CANNOT BE ANY PENALTY IN THE PRESENT FACTS AND CIRCUMSTANCES. IN HOLDING SO WE DRAW SUPPORT FROM THE ORDER OF ITAT PUNE BENCH IN THE CASE OF KANBAY SOFTWARE INDIA PVT. LTD. 122 TTJ 721 WHEREIN IT WAS HELD AS UNDER: WHETHER OR NOT A PERSON HAS ACTED BONA FIDE REFLEC TS THE STATE OF HIS MIND IN RESPECT OF HIS CONDUCT, AND, THEREFORE, THE ASSESSEE HAS HIS INHERENT LIMITATIONS IN ESTABLISHING THIS ASPECT OF THE MANNER. ALL THAT THE ASSESSEE CAN DO IS TO EXPLAIN THE CIRCUMSTANCES IN WHICH HE HAS ACTED IN A PARTICULAR MANN ER AND SET OUT THE RELATED FACTS. THE EXPLANATION FOR BONA FIDES , AT THE COST OF REPETITION, NEEDS TO BE CONSIDERED IN A FAIR AND OBJECTIVE MANNER AND IN THE LIGHT OF HUMAN PROBABILITIES. AS LONG AS THE EXPLANATION GIVEN BY THE ASSESSEE IS IN THE LIGHT OF THE HUMAN PROBABILITIES, THERE ARE NO FACTUAL ERRORS OR INCONSISTENCIES, AND IT IS SUPPORTED BY REASONABLE SUPPORTING EVIDENCES REGARDING FACTUAL ELEMENTS EMBEDDED THEREIN, IF ANY, THE BONA FIDES SHOULD BE TAKEN AS PROVED. THE ASSESSEE'S EXPLANATION REGARD ING BONA FIDES OF THE CLAIM DOES NOT SUFFER FROM ANY APPARENT CONSISTENCIES OR FACTUAL ERRORS AND IT IS QUITE IN TUNE WITH THE HUMAN PROBABILITIES. THERE IS NO GOOD REASON TO REJECT THE SAME AS UNACCEPTABLE FOR THE PURPOSE OF MAKING OF THE CLAIM OF DEDUCTI ON BEING COVERED BY THE DEEMING FICTION UNDER EXPLANATION 1 TO SECTION 271(1)( C ). 8 .1 IN VIEW OF THE ABOVE, WE DISAGREE WITH THE FINDING OF THE AUTHORITIES BELOW. ACCORDINGLY WE SET ASIDE THE FINDING OF THE LEARNED CIT (A) WITH THE DIRECTION TO THE AO TO DELETE THE PENALTY IMPOSED BY HIM. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWE D. 9 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. O RDER PRONOUNCED IN THE COURT ON 23 /01 / 2020 AT AHMEDABAD. - SD - - SD - (RAJPAL YADAV ) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (TRUE COPY) A HMEDABAD; DATED 23 / 01/2020 MANISH