The Assisatant Commissioner of Income Tax, Jalandhar V. M/s. Max India Ltd., Nawanshahr

ITA 762/ASR/2013

• Counselvise Citation: 76220914 RSA 2013
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 06-10-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 30-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Wrong claim
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S. KAPOOR, HONBLE ACCOUNTANT MEMBER I.T.A. NOS. 759 TO 762(ASR)/2013 ASSESSMENT YEARS: 2002-03 TO 2005-06 PAN: AABCM1204G THE ASST. COMMISSIONER OF INCOME TAX, RANGE-II, JALANDHAR. VS. M/S. MAX INDIA LTD. BHAI MOHAN SINGH NAGAR, RAIL MAJRA, TEH. BALACCHAUR, DIST:- NAWANSHAHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. TARSEM LAL (DR) RESPONDENT BY: SH. AJAY VOHRA, (SR. ADV.) SH. GAURAV JAIN (ADV.) DATE OF HEARING: 0 6.10.2015 DATE OF PRONOUNCEM ENT: 27.10.2015 ORDER PER T. S. KAPOOR (AM): THESE ARE FOUR APPEALS FILED BY THE REVENUE, AGA INST THE SEPARATE ORDERS OF CIT(A), JALANDHAR, ALL DATED 03.10.2013. THE ONL Y GRIEVANCE RAISED BY REVENUE IN THESE APPEALS IS DELETION OF PENALTY BY LEARNED CIT(A), WHICH WAS IMPOSED BY ASSESSING OFFICER UNDER SECTION 271(1)(C ) OF THE ACT. THESE APPEALS WERE HEARD TOGETHER, THEREFORE, FOR THE SAKE OF CON VENIENCE A COMMON AND CONSOLIDATED ORDER IS BEING PASSED. 2. AT THE OUTSET, THE LEARNED AR INVITED OUR ATTENT ION TO AN ORDER OF AMRITSAR TRIBUNAL IN ITA NO. 94 (ASR)/2011 FOR THE ASST. YEAR 2007-08 IN THE CASE OF ASSESSEE ITSELF, PLACED AT PAPER BOOK PAGE-38 ON WARDS AND SUBMITTED THAT 2. ITA NOS .759 TO 762 (ASR)/2013 ASST. YE ARS 2002-03 TO 2005-06 THE SIMILAR PENALTY ON ACCOUNT OF DISALLOWANCE OF E XPENDITURE UNDER SECTION 14A WAS DELETED BY HONBLE TRIBUNAL IN THE CASE OF ASSESSEE ITSELF FOR ASST. YEAR 2007-08 AND AS REGARDS OTHER ISSUES ON WHICH PENALT Y WAS IMPOSED, THE LEARNED CIT(A) HAS DELETED THE SAME BY HOLDING THAT THE QUANTUM WAS DELETED BY THE HONBLE AMRITSAR TRIBUNAL IN ITA NO.119(ASR) /2011 & IN ITA NO.120(ASR)/2011. THEREFORE, HE HEAVILY PLACED RELI ANCE ON THE ORDER OF CIT(A). 3. THE LEARNED DR, ON THE OTHER HAND, PLACED HIS RE LIANCE ON THE ORDER OF ASSESSING OFFICER. 4. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH OUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE ASSESSEE WAS IMP OSED PENALTY UNDER SECTION 271(1)(C) ON ACCOUNT OF DISALLOWANCES OF EXPENDITUR E UNDER SECTION 14A WHICH WAS COMMON IN ALL THE YEARS. IN ASST. YEAR 2002-03 & 2003-04, THE PENALTY WAS ALSO IMPOSED ON ACCOUNT OF DISALLOWANCE OF LEGA L AND PROFESSIONAL CHARGES, AND IN ASST. YEAR 2004-05 AND 2005-06 THE PENALTY W AS ALOS IMPOSED, ON ACCOUNT OF DISALLOWANCE UNDER SECTION 35D. THE YEAR -WISE BREAK UP OF DISALLOWANCES ON WHICH PENALTY WAS IMPOSED IS AS DE TAILED BELOW: ASST. YEAR 2002-03 2003-04 2004-05 2005-06 DISALLOWANCE U/S 14A 4,52,94,905/- 10,00,000/- 5,84,00,000/- 4,48,00,000 /- DISALLOWANCE OF LEGAL & PROFESSIONAL EXPENSES. 1,25,27,450/- 15,44,209/- __ __ DISALLOWANCE UNDER SECTION 35D __ __ 60,022/- 60,024/- 3. ITA NOS .759 TO 762 (ASR)/2013 ASST. YE ARS 2002-03 TO 2005-06 THE LEARNED CIT(A) HAS DELETED THE PENALTIES EXCEPT ON DISALLOWANCES UNDER SECTION 35D OF THE ACT., IN VARIOUS ASST. YEARS BY HOLDING AS UNDER: IN ITA NO.759(ASR)/2013 FOR THE ASST. YEAR 2002-03 5.2 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSE SSING OFFICER MADE IN THE PENALTY ORDER AS WELL AS THE WRITTEN SUBMISSIONS FI LED BY THE ASSESSEE COMPANY AS REPRODUCED ABOVE. I HAVE ALSO CONSIDERED THE VAR IOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE ASSESSEE COMPANY AS WELL AS OTHER MATERIAL BROUGHT ON RECORD. IT HAS ALSO BEEN NOTICED THAT TH E HONBLE ITAT, AMRITSAR BENCH, AMRITSAR HAS DELETED THE ADDITION OF RS.1,25 ,27,450/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE OUT OF LEGAL AND PROFESSIONAL EXPENSES AND ALSO REDUCED THE ADDITION MADE ON ACCO UNT OF DISALLOWANCE UNDER SECTION 14A OF THE INCOME TAX ACT, 1961 FROM RS.4,5 2,94,905/- TO RS.20,00,000/- VIDE THEIR ORDER DATED 08.03.2013 IN QUANTUM APPEAL FILED BY THE ASSESSEE COMPANY AGAINST ORDER OF THE LEARNED C IT(A). AS THE BASIS FOR LEVY OF PENALTY HAS GONE, THE PENALTY ON THE AMOUNT OF A DDITIONS/DISALLOWANCES OF RS.1,25,27,450/- AND RS.4,32,94,905/- (RS.4,52,94,9 05/- MINUS RS.20,00,000/-), WHICH STANDS DELETED IN SECOND APP EAL BY THE HONBLE ITAT, WILL NOT SURVIVE AND IT, THEREFORE, DIRECTED TO BE DELETED. IT HAS FURTHER BEEN NOTICED THAT THE ISSUE WITH REGARD TO LEVY OF PENAL TY U/S 271(1)(C ) OF THE INCOME TAX ACT, 1961 ON THE AMOUNT OF DISALLOWANCE/ ADDITI ONS MADE UNDER SECTION 14A OF THE INCOME TAX ACT, 1961 IS ALSO SQUARELY CO VERED IN FAVOUR OF THE ASSESSEE COMPANY BY THE ORDER OF THE HONBLE ITAT, AMRITSAR BENCH, AMRITSAR DATED 19.03.2013 IN ITA NO.94(ASR)/2011 FOR THE ASS T. YEAR 2007-08 IN THE CASE OF THE ASSESSEE COMPANY ITSELF. THE RELEVANT PARAS OF THE ORDER OF THE HONBLE JURISDICTIONAL ITAT DATED 19.03.2013 ARE NOT BEING REPRODUCED HERE FOR THE SAKE OF CONVENIENCE AND REPETITION AS THESE HAVE AL READY BEEN REPRODUCED BY THE ASSESSEE COMPANY IN ITS WRITTEN SUBMISSIONS DAT ED 04.06.2013. RESPECTFULLY THE ORDER OF THE HONBLE ITAT, AMRITSA R BENCH, AMRITSAR DATED 19.03.2013 IN ITA NO. 94(ASR)/2011 FOR THE A.Y 2007 -08 IN THE CASE OF ASSESSEE COMPANY ITSELF, I ALSO DELETED THE PENALTY ON THE A MOUNT OF DISALLOWANCE UNDER SECTION 14A OF THE INCOME TAX ACT, 1961 WHICH HAS B EEN SUSTAINED/CONFIRMED 4. ITA NOS .759 TO 762 (ASR)/2013 ASST. YE ARS 2002-03 TO 2005-06 IN SECOND APPEAL. IN OTHER WORDS, PENALTY ON THE BA LANCE ADDITION/DISALLOWANCE OF RS.20,00,000/- IS ALSO DELETED. 5.3 IN THE ABOVE STATED FACTS AND IN THE CIRCUMSTANCES OF THE CASE, IT IS HELD THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN LEVY ING THE PENALTY UNDER SECTION 271(1) OF THE INCOME TAX ACT, 1961 AND IS TO DELET ED THE ENTIRE PENALTY OF RS.2,06,42,580/-. MOREOVER, THE RATIO OF DECISION O F THE HONBLE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LIMITED [(2 010) 189 TAXMAN 332(SC) IS SQUARELY APPLICABLE TO THE FACTS OF THE CASE OF THE ASSESSEE COMPANY. IN THE RESULT, GROUNDS OF APPEAL NO.2,3,4,4.1&4.2 ARE, THE REFORE, ALLOWED. IN ITA NO.760(ASR)/2013 FOR THE ASST. YEAR 2003-04 5.2 I HAVE CONSIDERED THE OBSERVATIONS OF THE AS SESSING OFFICER AS MADE IN THE PENALTY ORDER AS WELL AS THE WRITTEN SUBMISSIONS FI LED BY THE ASSESSEE COMPANY AS REPRODUCED ABOVE. I HAVE ALSO CONSIDERED THE VAR IOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE ASSESSING OFFICER AS WELL AS BY THE ASSESSEE COMPANY AND OTHER MATERIAL BROUGHT ON RECORD. IT HA S BEEN NOTICED THAT THE HONBLE ITAT, AMRITSAR BENCH, AMRITSAR HAS DELETED THE ADDITION OF RS.15,44,209/- MADE BY THE ASSESSING OFFICER ON ACC OUNT OF DISALLOWANCE OUT OF LEGAL AND PROFESSIONAL EXPENSES VIDE THEIR ORDER DA TED 08.03.2013 IN QUANTUM APPEAL FILED BY THE ASSESSEE COMPANY AGAINST ORDER OF THE LEARNED CIT(A). AS THE VERY BASIS FOR LEVY OF PENALTY ON THE ADDITIONS/DIS ALLOWANCES DELETED BY THE HONBLE ITAT HAS GONE, THE PENALTY ON THE AMOUNT OF ADDITIONS/DISALLOWANCES OF RS.15,44,209/-, WHICH STANDS DELETED IN SECOND APPE AL BY THE HONBLE ITAT, WILL NOT SURVIVE AND IS, THEREFORE, DIRECTED TO BE DELETED. 5.3 IT HAS FURTHER BEEN NOTICED THAT THE ISSUE WITH REGARD TO LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 ON THE AMOUNT OF DISALLOWANCE/ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY LEARNED CIT(A) UNDER SECTION 14A OF THE INCOME TAX ACT, 196 1 IS ALSO SQUARELY COVERED IN FAVOUR OF THE ASSESSEE COMPANY BY THE ORDER OF T HE HONBLE ITAT, AMRITSAR BENCH AMRITSAR DATED 19.03.2013 IN ITA NO.94(ASR)/2 011 FOR THE ASST. YEAR2007-08 IN THE CASE OF THE ASSESSEE COMPANY ITS ELF. THE RELEVANT PARAS OF THE ORDER OF THE HONBLE JURISDICTIONAL ITAT DATED 19.03.2013 ARE NOT BEING 5. ITA NOS .759 TO 762 (ASR)/2013 ASST. YE ARS 2002-03 TO 2005-06 REPRODUCED HERE FOR THE SAKE OF CONVENIENCE AND REP ETITION AS THESE HAVE ALREADY BEEN REPRODUCED BY THE ASSESSEE COMPANY IN ITS WRITTEN SUBMISSIONS DATED 04.06.2013. AS THE FACTS AND CIRCUMSTANCES OF THE CASE OF THE ASSESSEE COMPANY FOR THE ASST. YEAR 2007-08 ARE SIMILAR TO T HAT OF THE YEAR UNDER CONSIDERATION, THE RATIO OF THE DECISION OF HONBLE JURISDICTIONAL ITAT DATED 19.03.2013 IN THE CASE OF THE ASSESSEE COMPANY ITSE LF IS SQUARELY APPLICATION TO THE YEAR UNDER CONSIDERATION. RESPECTFULLY FOLLOWIN G THE ORDER OF THE HONBLE ITAT, AMRITSAR BENCH, AMRITSAR DATED 19.03.2013 IN ITA NO. 94(ASR)/2011 FOR THE ASST. YEAR 2007-08 IN THE CASE OF THE ASSESSEE COMPANY ITSELF, I ALSO DELETE THE PENALTY ON THE AMOUNT OF DISALLOWANCE UNDER SEC TION 14A OF THE INCOME TAX ACT, 1`961 WHICH HAS BEEN SUSTAINED/CONFIRMED IN FI RST APPEAL. IN OTHER WORDS, PENALTY ON THE ADDITION/DISALLOWANCE OF RS.10,00,00 0/- IS ALSO DELETED. 5.4 IN THE ABOVE STATED FACTS AND IN THE CIRCUMST ANCES OF THE CASE, THE ENTIRE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTI ON 271(1) (C ) OF THE INCOME TAX ACT, 1961 IS, THEREFORE, DIRECTED TO BE DELETED . IN THE RESULT, GROUNDS OF APPEAL NO. 2,3,4,4.1&4.2 ARE, THEREFORE, ALLOWED. IN ITA NO.761(ASR)/2013 FOR THE ASST. YEAR 2004-05 5.2 I HAVE CONSIDERED THE OBSERVATIONS OF THE AS SESSING OFFICER AS MADE IN THE PENALTY ORDER AS WELL AS THE WRITTEN SUBMISSION S FILED BY THE ASSESSEE COMPANY AS REPRODUCED ABOVE. I HAVE ALSO CONSIDERED THE VARIOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE ASSESSING OFFICER AS WELL AS BY THE ASSESSEE COMPANY AND OTHER MATERIAL BROUGHT ON RECORD. IT HA S ALSO BEEN NOTICED THAT THE HONBLE ITAT, AMRITSAR BENCH, AMRITSAR HAS REDU CED THE QUANTUM OF ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT O F DISALLOWANCE UNDER SECTION 14A OF THE INCOME TAX ACT,1961 AND FURTHER ENHANCED BY THE LEARNED CIT(A) FROM RS.5,84,00,000/- TO RS. 8,80,000/- VIDE THEIR ORDER DATED 08.0- 3.2013(SUPRA) IN QUANTUM APPEAL FILED BY THE ASSESS EE COMPANY AGAINST ORDER OF THE LEARNED CIT(A). AS THE VERY BASIS FOR LEVY O F PENALTY ON THE AMOUNT OF ADDITION/DISALLOWANCES OF RS.,5,75,20,000/-(RS.5,84 ,00,000/- MINUS RS.8,80,000/-), WHICH STANDS DELETED IN SECOND WHIC H STANDS DELETED IN SECOND APPEAL BY THE HONBLE ITAT, WILL NOT SURVIVE AND IS , THEREFORE, DIRECTED TO BE DELETED. 6. ITA NOS .759 TO 762 (ASR)/2013 ASST. YE ARS 2002-03 TO 2005-06 5.3 IT HAS FURTHER BEEN NOTICED THAT THE ISSUE WITH REGARD TO LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 ON THE AMOUNT OF DISALLOWANCE/ADDITION MADE UNDER SECTION 14A OF THE INCOME TAX ACT, 1961 IS ALSO SQUARELY COVERED IN FAVOUR OF THE ASSESSEE COM PANY BY THE ORDER OF THE HONBLE ITAT, AMRITSAR BENCH, AMRITSAR DATED 19.03. 2013 IN ITA NO.94(ASR)2011 FOR THE ASST. YEAR.2007-08 IN THE CA SE OF THE ASSESSEE COMPANY ITSELF. THE RELEVANT PARAS OF THE ORDER OF THE HON BLE JURISDICTIONAL ITAT DATED 19.03.2013 ARE NOT BEING REPRODUCED HERE FOR THE SA KE OF CONVENIENCE AND REPETITION AS THESE HAVE ALREADY REPRODUCED HERE FO R THE SAKE OF CONVENIENCE AND REPLETION AS THESE HAVE ALREADY BEEN REPRODUCED BY THE ASSESSEE COMPANY IN ITS WRITTEN SUBMISSIONS DATED 04.06.2013. AS THE FACTS AND CIRCUMSTANCES RELATING TO LEVY OF PENALTY ON THE AMOUNT OF ADDITI ON/DISALLOWANCE UNDER SECTION 14A OF THE INCOME TAX ACT, 1961 IN THE CASE OF THE ASSESSEE COMPANY FORT THE ASST. YEAR 2007-08 ARE SIMILAR TO THAT OF THE YEAR UNDER CONSIDERATION, THE RATIO OF THE DECISION OF HONBLE JURISDICTIONAL ITAT DATE D 19.03.2013 IN THE CASE OF THE ASSESSEE COMPANY ITSELF FOR THE ASST. YEAR 2007 -08 IS SQUARELY APPLICABLE TO THE YEAR UNDER CONSIDERATION. RESPECTFULLY FOLLOWIN G THE ORDER OF THE HONBLE ITAT, AMRITSAR BENCH, AMRITSAR DATED 19.03.2013 IN ITA NO.94(ASR)/2011 FOR THE ASST. YEAR 2007-08 IN THE CASE OF THE ASSESSEE COMPANY ITSELF, I ALSO DELETE THE PENALTY ON THE AMOUNT OF DISALLOWANCE UNDER SEC TION 14A OF THE INCOME TAX ACT, 1961 WHICH HAS BEEN SUSTAINED/CONFIRMED IN SEC OND APPEAL. IN OTHER WORDS, PENALTY ON THE REMAINING ADDITION/DISALLOWAN CE OF RS.8,80,000/- IS ALSO DELETED. 5.4 THE ADDITIONS OF RS.60,024/- MADE BY THE ASSESS ING OFFICER ON ACCOUNT OF DISALLOWANCE UNDER SECTION 35D OF THE INCOME TAX ACT, 1961, WHICH REPRESENTS AMOUNT PAID TO ROC FOR THE PURPOSE OF IN CREASING SHARE CAPITAL OF THE ASSESSEE COMPANY, HAS NOT BEEN CONTESTED BY THE ASSESSEE COMPANY EVEN BEFORE THE CIT(A). IT HAS BEEN SUBMITTED THAT THE A SSESSEE COMPANY HAS MADE THE CLAIM INADVERTENTLY WITHOUT ANY MALAFIDE INTENT ION. IN MY OPINION, THE ISSUE WITH REGARD TO CLAIM OF EXPENSES RELATING TO INCREA SE IN SHARE CAPITAL HAS ALREADY BEEN SETTLED LONG TIME BACK BY THE HONBLE APEX COURT AND THE EXPENSES HAVE BEEN HELD TO BE CAPITAL IN NATURE AND AS SUCH THESE EXPENSES ARE NOT ALLOWABLE AS REVENUE EXPENSES. EVEN AFTER THAT THE ASSESSEE COMPANY HAS 7. ITA NOS .759 TO 762 (ASR)/2013 ASST. YE ARS 2002-03 TO 2005-06 CLAIMED EXPENSES WHICH ARE NOT ALLOWABLE AS PER SET TLED POSITION OF LAW. IT MEANS THAT THE ASSESSEE COMPANY HAS MADE A FALSE CL AIM WILL BE CERTAINLY TANTAMOUNT TO FILING OF INACCURATE PARTICULARS OF I NCOME BY THE ASSESSEE COMPANY. MOREOVER, THE ISSUE REGARDING CLAIM OF EXP ENSES UNDER REFERENCE CANNOT BE SAID TO BE DISPUTED ONE IN VIEW OF HONBL E APEX COURTS DECISIONS IN VARIOUS CASES INCLUDING RELIED UPON BY THE ASSESSIN G OFFICER. THEREFORE, THE PENALTY LEVIED BY THE ASSESSING OFFICER IS HELD TO BE JUSTIFIED AND IS CONFIRMED ON THE ADDITION/DISALLOWANCE OF RS.60,024/-. 5.5 IN THE ABOVE STATED FACTS AND IN THE CIRCUMSTAN CES OF THE CASE, THE PENALTY UNDER SECTION 271(1) (C) OF THE INCOME TAX ACT,1961 ON AN AMOUNT OF RS,5,84,00,000/-, REPRESENTING DISALLOWANCE MADE BY THE ASSESSING OFFICER AS PER PROVISIONS OF SECTION 14A OF THE INCOME TAX ACT ,1961 AND FURTHER ENHANCED BY LEARNED CIT(A), IS DIRECTED TO BE DELETED. HOWEV ER, THE ASSESSING OFFICER IS HELD TO BE JUSTIFIED IN LEVYING PENALTY ON THE ADDI TION/DISALLOWANCE OF RS.60,024/- AND PENALTY IS HEREBY CONFIRMED ON THIS ADDITION/DISALLOWANCE. IN THE RESULT, GROUNDS OF APPEAL NO.2 IS PARTLY ALLOWE D AND GROUNDS OF APPEAL NO.3, 3.1 &3.2 ARE ALLOWED. IN ITA NO.762(ASR)/2013 FOR THE ASST. YEAR 2005-06 5.2 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSE SSING OFFICER AS MADE IN THE PENALTY ORDER AS WELL AS WRITTEN SUBMISSIONS FI LED BY THE ASSESSEE COMPANY AS REPRODUCED ABOVE. I HAVE ALSO CONSIDERED THE VAR IOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE ASSESSING OFFICER AS WELL AS BY THE ASSESSEE COMPANY AND OTHER MATERIAL BROUGHT ON RECORD. IT HA S ALSO BEEN NOTICED THAT THE HONBLE ITAT, AMRITSAR BENCH, AMRITSAR HAS REDU CED THE QUANTUM OF ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT O F DISALLOWANCE UNDER SECTION 14A OF THE INCOME TAX ACT, 1961 AND FURTHER ENHANCED BY THE LEARNED CIT(A) FROM RS.4,48,00,000/- TO 8,20,000/- VIDE THE IR ORDER DATED 08.03.2013(SUPRA) IN QUANTUM APPEAL FILED BY THE AS SESSEE COMPANY AGAINST ORDER OF THE LEARNED CIT(A). AS THE VERY BASIS FOR LEVY OF PENALTY HAS GONE, THE PENALTY ON THE AMOUNT OF ADDITION/DISALLOWANCE OF R S.4,39,80,000/- (RS.4,48,00,000/- MINUS RS.8,20,000/-), WHICH STAND S DELETED IN SECOND APPEAL BY THE HONBLE ITAT, WILL NOT SURVIVE AND IS, THERE FORE, DIRECTED TO BE DELETED. 8. ITA NOS .759 TO 762 (ASR)/2013 ASST. YE ARS 2002-03 TO 2005-06 5.3 IT HAS FURTHER BEEN NOTICED THAT THE ISSUE WITH REGARD TO LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 ON THE AMOUNT OF DISALLOWANCE/ADDITION MADE UNDER SECTION 14A OF THE INCOME TAX ACT, 1961 IS ALSO SQUARELY COVERED IN FAVOUR OF THE ASSESSEE COM PANY BY THE ORDER OF THE HONBLE ITAT, AMRITSAR BENCH, AMRITSAR DATED 19.03. 2013 IN ITA NO.94(ASR)/2011 FOR THE ASST. YEAR2007-08 IN THE CA SE OF THE ASSESSEE COMPANY ITSELF. THE RELEVANT PARAS OF THE ORDER OF THE HON BLE JURISDICTIONAL ITAT DATED 19.03.2013 ARE NOT BEING REPRODUCED HERE FOR THE SA KE OF CONVENIENCE AND REPLETION AS THESE HAVE ALREADY BEEN REPRODUCED BY THE ASSESSEE COMPANY IN ITS WRITTEN SUBMISSIONS DATED 04.06.2013. AS THE FACTS AND CIRCUMSTANCES RELATING TO LEVY OF PENALTY ON THE AMOUNT OF ADDITION/DISALL OWANCE UNDER SECTION 14A OF THE INCOME TAX ACT, 1961 IN THE CASE OF THE ASSESSE E COMPANY FOR THE ASST. YEAR 2007-08 ARE SIMILAR TO THAT OF THE YEAR UNDER CONSI DERATION, THE RATIO OF THE DECISION OF HONBLE JURISDICTIONAL ITAT DATED 19.03 .2013 IN THE CASE OF THE ASSESSEE COMPANY ITSELF FOR THE ASST. YEAR 2007-08 IS SQUARELY APPLICABLE TO THE YEAR UNDER CONSIDERATION. RESPECTFULLY FOLLOWING TH E ORDER OF THE HONBLE ITAT, AMRITSAR BENCH, AMRITSAR DATED 19.03.2013 IN ITA NO .94(ASR)/2011 FOR THE ASST. YEAR 2007-08 IN THE CASE OF THE ASSESSEE COMP ANY ITSELF, I ALSO DELETE THE PENALTY ON THE AMOUNT OF DISALLOWANCE UNDER SECTION 14A OF THE INCOME TAX ACT, 1961 WHICH HAS BEEN SUSTAINED/CONFIRMED IN SEC OND APPEAL. IN OTHER WORDS, PENALTY ON THE REMAINING ADDITION/DISALLOWAN CE OF RS.8,20,000/- IS ALSO DELETED. 5.4 THE ADDITION OF RS.60,024/- MADE BY THE ASSESS ING OFFICER ON ACCOUNT OF DISALLOWANCE UNDER SECTION 35D OF THE INCOME TAX AC T,1961, WHICH REPRESENTS AMOUNT PAID TO ROC FOR THE PURPOSE OF INCREASING SH ARE CAPITAL OF THE ASSESSEE COMPANY, HAS NOT BEEN CONSIDERED BY THE ASSESSEE CO MPANY EVEN BEFORE THE CIT(A). IT HAS BEEN SUBMITTED THAT THE ASSESSEE COM PANY HAS MADE THE CLAIM INADVERTENTLY WITHOUT ANY MALAFIDE INTENTION. IN MY OPINION, THE ISSUE WITH REGARD TO CLAIM OF EXPENSES RELATING TO INCREASE IN SHARE CAPITAL HAS ALREADY BEEN SETTLED LONG TIME BACK BY THE HONBLE APEX COU RT AND THE EXPENSES HAVE BEEN SETTLED LONG TIME BACK BY THE HONBLE APEX COU RT AND THE EXPENSES HAVE BEEN HELD TO BE CAPITAL IN NATURE AND AS SUCH THESE EXPENSES ARE NOT ALLOWABLE AS REVENUE EXPENSES. EVEN AFTER THAT THE ASSESSEE C OMPANY HAS CLAIMED 9. ITA NOS .759 TO 762 (ASR)/2013 ASST. YE ARS 2002-03 TO 2005-06 EXPENSES WHICH ARE NOT ALLOWABLE AS PER SETTLED POS ITION OF LAW. IT MEANS THAT THE ASSESSEE COMPANY HAS MADE A FALSE CLAIM WHICH C ANNOT BE CONSIDERED AS AN INADVERTENT ERROR AND MAKING A FALSE CLAIM WILL CERTAINLY TANTAMOUNT TO FILING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE COMPANY. MOREOVER, THE ISSUE REGARDING CLAIM OF EXPENSES UNDER REFERENCE C ANNOT BE SAID TO BE DISPUTED ONE IN VIEW OF HONBLE APEX COURTS DECISIONS IN VA RIOUS CASES INCLUDING RELIED UPON BY THE ASSESSING OFFICER. THEREFORE, THE PENAL TY LEVIED BY THE ASSESSING OFFICER IS HELD TO BE JUSTIFIED AND IS CONFIRMED ON THE ADDITION/DISALLOWANCE OF RS.60,024/-. 5.5 IN THE ABOVE STATED FACTS AND IN THE CIRCUMSTAN CES OF THE CASE, THE PENALTY UNDER SECTION 271(1) OF THE INCOME TAX ACT ,1961 ON AN AMOUNT OF RS.4,48,00,000/-, REPRESENTING DISALLOWANCE MADE BY THE ASSESSING OFFICER AS PER PROVISIONS OF SECTION 14A OF THE INCOME TAX ACT 1961 AND FURTHER ENHANCED BY LEARNED CIT(A), IS DIRECTED TO BE DELETED. HOWEV ER, THE ASSESSING OFFICER IS HELD TO BE JUSTIFIED LEVYING PENALTY ON THE ADDITIO N/DISALLOWANCE OF RS.60,024/- AND PENALTY IS HEREBY CONFIRMED ON THIS ADDITION/DI SALLOWANCE. IN THE RESULT, GROUNDS OF APPEAL NO.2 IS PARTLY ALLOWED AND GROUND S OF APPEAL NO.3, 3.1 & 3.2 ARE ALLOWED. WE FIND THAT THE LEARNED CIT(A) HAS FOLLOWED THE TR IBUNAL ORDER IN ITA NO. 94(ASR)/2011 FOR THE ASST. YEAR 2007-08 IN THE CASE OF ASSESSEE COMPANY ITSELF FOR DELETING THE PENALTY ON ACCOUNT OF DISALLOWANCE UNDER SECTION 14A. THE RELEVANT FINDINGS OF HONBLE TRIBUNAL ORDER IN ITA NO. 94(ASR)/2011 FOR ASST. YEAR.2007-08 AS CONTAINED IN PARA 18 ONWARDS ARE RE PRODUCED BELOW: 18. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE FACTS OF THE CASE. WE ARE OF THE VIEW THAT PENALTY LEVIED U/S 271(1)(C) O F THE ACT WAS ON THE FACTS OF THE CASE AND THE LAW HAS RIGHTLY BEEN DELETED BY TH E LD. CIT(A). THERE IS NO DISPUTE THAT THE INFORMATION AND DETAILS IN RESPECT OF EXEMPT INCOME AND EXPENSES INCURRED DURING THE RELEVANT YEAR WERE AVA ILABLE IN THE AUDITED ACCOUNTS FILED WITH THE A.O. THE SAID INFORMATION A ND DETAILS HAVE NOT BEEN 10. ITA NO S.759 TO 762 (ASR)/2013 ASST. YE ARS 2002-03 TO 2005-06 FOUND BY THE AO TO BE FALSE OR FACTUALLY INCORRECT. THE AO MADE DISALLOWANCE U/S 14A ON ESTIMATE BASIS AND FOR COMPUTING DISALLO WANCE ON SUCH BASIS, HE RESORTED TO THE APPLICABILITY OF PROVISIONS OF RULE 8D OF THE I.T. RULES. THE AO HAS OTHERWISE NOT ESTABLISHED ANY PROXIMATE NEXUS B ETWEEN EXEMPT INCOME AND THE EXPENDITURE INCURRED WHICH HE WAS REQUIRED TO DO HAVING REGARD TO THE DECISIONS OF HONBLE MUMBAI HIGH COURT IN THE CASE OF GODREJ & BOYCE CO. LTD (SUPRA) AND AND HONBLE DELHI HIGH COURT IN THE CAS E OF MAXOPP INVESTMENT LTD. (SUPRA) REFERRED TO HEREINABOVE. 19. THE LD. COUNSEL FOR THE ASSESSEE IS RIGHT IN S TATING THAT RULE 8D HAS BEEN HELD BY THE HONBLE COURTS TO BE NOT APPLICABLE TO THE ASSESSMENT YEAR 2007-08 AND THE VERY FOUNDATION OF LEVY OF PENALTY IN THE P RESENT CASE I.E. RULE 8D FOR MAKING DISALLOWANCE U/S 14A IN THE ASSESSMENT YEAR UNDER CONSIDERATION STANDS DEMOLISHED AND THEREFORE, PENALTY CANNOT SUR VIVE THE DECISION OF THE ITAT, DELHI BENCH IN THE CASE OF IN TIDEWATER MARIN E INTERNATIONAL INC. VS. DCIT (SUPRA) SUPPORTS THE CASE OF THE ASSESSE. 20. IT IS TRITE LAW THAT NO PENALTY CAN BE LEVIED IN THE CASE OF ESTIMATED ADDITIONS/DISALLOWANCES . REFERENCE IS MADE IN THIS REGARD TO THE DECISION OF THIS BENCH IN THE CASE OF ITO VS. SUKHAMRIT SINGH: ITA NO.451(ASR)/2011.IN THE PRESENT CASE, SINCE RULE 8D WAS NOT APPLICABLE, THE AO HAS CONSIDERED AS HAVING MADE DISALLOWANCE U/S 14A ON ESTIMATE BASIS. THE RETURN FILED BY THE ASSESSEE OFFERING NO DISALLOWANCE U/S 14A IS DEMONS TRATIVE OF THE ASSESSEES STAND THAT NO EXPENDITURE INCURRED U/S 14A OF THE A CT IS DISALLOWABLE UNDER THAT SECTION. THE HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS (P) LTD (SUPRA) OBSERVED THAT IN SO FAR AS LEVY OF PENALTY U/S 271(1)(C) IS CONCERNED, FURNISHING OF INACCURATE PARTICULARS WOU LD DEPEND UPON THE RETURN FILED BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE A SSESSEE CAN FURNISH PARTICULARS OF HIS INCOME AND WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. THEREFORE, WHAT IS RELEV ANT IS WHETHER IN THE RETURN THERE WAS FURNISHING OF INACCURATE PARTICULARS OF I NCOME OR NOT. THE LETTER DATED DECEMBER 11, 2009 TO WHICH REPEATED REFERENCE WAS M ADE BY THE LD. DR IS OF LITTLE CONSEQUENCE AND THE ISSUE HAS TO BE DECIDED WITH REFERENCE TO PARTICULARS 11. ITA NO S.759 TO 762 (ASR)/2013 ASST. YE ARS 2002-03 TO 2005-06 FILED IN THE RETURN OF INCOME. IN ANY CASE, THE ABO VE LETTER ONLY INDICATES THAT THE ASSESSEE WAS OF THE VIEW WHILE NO DISALLOWANCE WAS CALLED FOR IN THE ABSENCE OF PROXIMATE NEXUS BETWEEN THE EXPENDITURE INCURRED AND THE EXEMPT INCOME, AT THE BEST DISALLOWANCE, IF ANY, BECAUSE OF SOME I NVOLVEMENT OF TREASURY DEPARTMENT IN THE INVESTMENT ACTIVITY IF AT ALL COU LD BE MADE ON ESTIMATE BASIS, WHICH MAY NOT BE APPROPRIATE IN THE PRE-RULE 8D SCE NARIO. IN OUR VIEW, NOTHING TURNS ON THE AFORESAID LETTER OF THE ASSESSEE, SINC E THE DISALLOWANCE HAS BEEN MADE BY THE AO ON ESTIMATE BASIS AND PRESUMPTION AN D IF THE ASSESSEE HAD OFFERED ANY AMOUNT OF DISALLOWANCE U/S 14A ON ESTIM ATION, VARIATION IN SUCH ESTIMATION CANNOT BE A GROUND FOR LEVY OF PENALTY U /S 271(1)(C) OF THE ACT. 21. THE CONTENTION OF THE LD. DR THAT THE ASSESSEE HAD ACCEPTED THE DISALLOWANCE MADE U/S 14A OF THE ACT TO THE EXTENT SUSTAINED BY THE LD. CIT(A) IN THE EARLIER YEARS AND THEREFORE, ASSESSEE WAS AW ARE THAT THE ITA 16 NO.94(ASR)/2011 DISALLOWANCE MADE U/S 14A OF THE AC T WAS CALLED FOR BUT STILL DID NOT OFFER ANY DISALLOWANCE IS NOT FACTUALLY COR RECT, SINCE IN THOSE YEARS, ASSESSEE HAS CHALLENGED THE DISALLOWANCE SUSTAINED U/S 14A BEFORE THE TRIBUNAL. 22. THE ASSESSEES CASE IS ALSO COVERED BY THE DECI SION OF HONBLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS (P) LTD (SUPRA), WHEREIN TOO PENALTY WAS LEVIED ON DISALLOWANCE U/S 14A AND IT WAS THE C ASE OF THE A.O. TO FIND OUT THAT THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME BY NOT OFFERING ANY AMOUNT FOR DISALLOWANCE UNDER THAT SECTION. THE HON BLE SUPREME COURT WHILE HOLDING THAT THE PENALTY WAS NOT LEVIABLE MADE THE FOLLOWING PERTINENT OBSERVATIONS IN THAT CASE: A GLANCE AT THIS PROVISION WOULD SUGGEST THAT IN O RDER TO BE COVERED THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF I NCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURA TE PARTICULARS OF HIS INCOME. PRESENT IS NOT THE CASE OF CONCEALMENT OF T HEINCOME. THAT IS NOT THE CASE OF THE REVENUE EITHER. HOWEVER, THE LD. CO UNSEL FOR REVENUE SUGGESTED THAT BY MAKING INCORRECT CLAIM FOR THE EX PENDITURE ON INTEREST THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS O F THE INCOME. AS PER LAW LEXICON, THE MEANING OF THE WORD PARTICULARS IS A DETAIL OR DETAILS (IN PLURAL SENSE); THE DETAILS OF A CLAIM, OR THE S EPARATE ITEMS OF AN ACCOUNT. THEREFORE, THE WORD PARTICULARS USED IN THE SECTION 271(1)(C) OF 12. ITA NO S.759 TO 762 (ASR)/2013 ASST. YE ARS 2002-03 TO 2005-06 THE ACT WOULD EMBRACE THE MEANING OF THE DETAILS OF THE CLAIM MADE. IT IS AN ADMITTED POSITION IN THE PRESENT CASE THAT NO IN FORMATION GIVEN IN THE RETURN WAS FOUND TO BE INCORRECT OR INACCURATE. IT IS NOT AS IF ANY STATEMENT MADE OR ANY DETAIL SUPPLIED WAS FOUND TO BE FACTUALLY INCORRECT. HENCE, AT LEAST, PRIMA FACIE THE ASSESSE E CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. THE LD. COUNS EL ARGUED THAT SUBMITTING AN INCORRECT CLAIM IN LAW FOR THE EXPEND ITURE ON INTEREST WOULD AMOUNT TO GIVING INACCURATE PARTICULARS OF SU CH INCOME. WE DO NOT THINK THAT SUCH CAN BE THE INTERPRETATION OF THE CO NCERNED WORDS. THE WORDS ARE PLAIN AND SIMPLE IN ORDER TO EXPOSE THE A SSESSEE TO THE PENALTY. UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY ANY STRETCH OF IMAG INATION, MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISH ING INACCURATE PARTICULARS. IN CIT VS. ATUL MOHAN BINDAL [2009] 9 SCC 589, WHERE THIS COURT WAS CONSIDERING THE SAME PROVISION, THE COURT OBSERVED THAT THE A.O. HAS TO BE SATISFIED THAT A PERSON HAS CONCEALE D THE PARTICULARS OF SUCH INCOME. WE ARE NOT CONCERNED IN THE PRESENT CA SE WITH THE MENS REA. HOWEVER, WE HAVE TO ONLY SEE AS TO WHETHER IN THIS CASE, AS A MATTER OF FACT, THE ASSESSEE HAS GIVEN INACCURATE PARTICUL ARS. IN WEBSTERS DICTIONARY, THE WORD INACCURATE HAS BEEN DEFINED AS:- NOT ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING T O TRUTH, ERRONEOUS, AS AN INACCURATE STATEMENT, COPY OR TRANSCRIPT. WE HAVE ALREADY SEEN THE MEANING OF THE WORD PARTI CULARS IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORDS CONJUNCTIO N, THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT A CCURATE, NO EXACT OF CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. WE MU ST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DET AILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT O R ERRONEOUS OR FALSE. SUCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY U/S 271(1)(C) OF THE ACT. A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO F URNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. IT WAS TRIED TO BE SUGGESTE D THAT SECTION 14A OF THE ACT SPECIFICALLY EXCLUDED THE DEDUCTIONS IN RES PECT OF THE EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO INCOME WHIC H DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT. IT WAS FURTHER P OINTED OUT THAT THE DIVIDENDS FROM THE SHARES DID NOT FORM THE PART OF THE TOTAL INCOME. IT WAS, THEREFORE, REITERATED BEFORE US THAT THAT THE AO HA D CORRECTLY REACHED THE CONCLUSION THAT SINCE THE ASSESSEE HAD CLAIMED EXCE SSIVE DEDUCTIONS KNOWING THAT THEY ARE INCORRECT; IT AMOUNTED TO CON CEALMENT OF INCOME. IT WAS TRIED TO BE ARGUED THAT THE FALSEHOOD IN ACC OUNTS CAN TAKE EITHER OF THE TWO FORMS (I) AN ITEM OF RECEIPT MAY BE SUPPRES SED FRAUDULENTLY; (II) AN ITEM OF EXPENDITURE MAY BE FALSELY (OR IN AN EXA GGERATED AMOUNT) CLAIMED, AND BOTH TYPES ATTEMPT TO REDUCE THE TAXAB LE INCOME AND THEREFORE, BOTH TYPES AMOUNT TO CONCEALMENT OF PART ICULARS OF ONES 13. ITA NO S.759 TO 762 (ASR)/2013 ASST. YE ARS 2002-03 TO 2005-06 INCOME AS WELL AS FURNISHING OF INACCURATE PARTICUL ARS OF INCOME. WE DO NOT AGREE AS THE ASSESSEE HAD FURNISHED ALL THE DETAILS OF ITS EXPENDITURE AS WEL L AS INCOME IN ITS RETURN, WHICH DETAILS, IN THEMSELVES, WERE NOT FOUN D TO BE INACCURATE NOR COULD BE VIEWED AS THE CONCEALMENT OF INCOME ON ITS PART. IT WAS UP TO THE AUTHORITIES TO ACCEPT ITS CLAI IN THE RETURN OR NOT. MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, WHICH CLAIM W AS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE THAT BY ITSELF WO ULD 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 CLAI M MADE IS NOT ACCEPTED BY A.O. FOR ANY REASON, THE ASSESSEE WILL INVITE PENALTY U/S 271(1)(C). THAT IS CLEARLY NOT THE INTENDMENT OF TH E LEGISLATURE. IN THIS BEHALF THE OBSERVATIONS OF THIS COURT MADE IN SREE KRISHNA ELECTRICALS V. STATE OF TAMIL NADU [2009] 23 VST 24 9 AS REGARDS THE PENALTY ARE, APPOSITE. IN THE AFOREMENTIONED DECISI ON WHICH PERTAINED TO THE PENALTY PROCEEDINGS IN TAMIL NADU GENERAL SALES TAX ACT, THE COURT HAD FOUND THAT THE AUTHORITIES BELOW HAD FOUND THAT THERE WERE SOME INCORRECT STATEMENTS MADE IN THE RETURN. HOWEVER, T HE SAID TRANSACTIONS WERE REFLECTED IN THE ACCOUNTS OF THE ASSESSEE. THI S COURT, THEREFORE, OBSERVED: SO FAR AS THE QUESTION OF PENALTY IS CONCERNED, THE ITEMS WHICH WERE NOT INCLUDED IN THE TURNOVER WERE FOUND INCORP ORATED IN THE APPELLANTS ACCOUNT BOOKS. WHERE CERTAIN ITEMS WHIC H ARE NOT INCLUDED IN THE TURNOVER, ARE DISCLOSED IN THE DEAL ERS OWN ACCOUNT BOOKS AND THE ASSESSING AUTHORITIES INCLUDE THESE I TEMS IN THE DEALERS TURNOVER DISALLOWING THE EXEMPTION, PENALT Y CANNOT BE IMPOSED. THE PENALTY LEVIED STANDS SET ASIDE. THE SITUATION IN THE PRESENT CASE IS STILL BETTER A S NO FAULT HAS BEEN FOUND WITH THE PARTICULARS SUBMITTED BY THE ASSESSEE IN ITS RE TURN. THE TRIBUNAL AS WELL AS THE COMMISSIONER OF INCOME- TAX (APPEALS) AND THE HIGH COURT HAVE CORRECTLY REACHED THIS CONCLUSI ON AND THEREFORE, THE APPEAL FILED BY THE REVENUE HAS NO MERITS AND IS DISMISSED . 23. WE ARE OF THE VIEW THAT THE AFORESAID DECISION SQUARELY APPLIES TO THE FACTS OF THE PRESENT CASE. EVEN IF IT IS ASSUMED TH AT THE ASSESSEE MADE INCORRECT CLAIM OF THE EXPENDITURE BY NOT OFFERING ANY AMOUNT OF DISALLOWANCE U/S 14A, THE FACT REMAINS THAT THERE WAS NO FILING OF INACCU RATE PARTICULARS OF INCOME SINCE THERE WAS NOT FACTUAL INACCURACY IN THE INFOR MATION OR DETAILS REGARDING VARIOUS EXPENSES FILED ALONGWITH THE RETURN OF INCO ME/ OR DURING THE ASSESSMENT PROCEEDINGS. THERE IS, IN FACT, NO SUCH FINDING IN THE ASSESSMENT ORDER. AS HELD BY THE HONBLE SUPREME COURT THAT ME RE MAKING OF THE CLAIM 14. ITA NO S.759 TO 762 (ASR)/2013 ASST. YE ARS 2002-03 TO 2005-06 WHICH IS NOT SUSTAINABLE IN LAW, WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME AND SUCH CLAIM MADE IN THE RE TURN CANNOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS. 23.1 FURTHER, MERELY BECAUSE NO APPEAL WAS FILED B Y THE ASSESSEE AGAINST AOS ORDER DOES NOT LEAD TO ANY ADVERSE INFERENCE T HAT THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME RELATION TO ADDITI ON/DISALLOWANCE MADE BY THE A.O. THERE IS SUFFICIENT AUTHORITY FOR THE PROPOSIT ION TO WHICH REFERENCE HAS BEEN MADE BY THE LD. COUNSEL FOR THE ASSESSEE HEREI N ABOVE. 23.2 ACCORDINGLY, WE ARE OF THE VIEW THAT PENALTY LEVIED UNDER SECTION 271(1)(C) IS NOT SUSTAINABLE AND WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A), WHO HAS RIGHTLY CANCELLED THE PENALTY LEVIED BY THE A.O . THUS, ALL THE GROUNDS OF THE REVENUE ARE DISMISSED. AS REGARDS DELETION OF QUANTUM OF LEGAL AND PROFES SIONAL EXPENSES ARE CONCERNED, THE HONBLE TRIBUNAL VIDE ITS ORDER DATE D 08.03.2013 IN ITA NO.119(ASR)/2011 AND IN ITA NO.120(ASR)/2011 IN A C ONSOLIDATED ORDER HAS DELETED THE SAME VIDE PARA 64 IN ASST. YEAR 2002-20 03 & PARA 85 IN ASST. YEAR 2003-04. THE ASSESSEE HAD CLAIMED TO HAVE PAID AN A MOUNT OF RS.1,25,27,450/- IN ASST. YEAR 2002-03 AND RS.15,44 ,209/- IN ASST. YEAR 2003-04 TO MAX UK LIMITED FOR PROVIDING VARIOUS BUS INESS SUPPORT SERVICES WHICH THE ASSESSING OFFICER HAD DISALLOWED. THE GRO UND OF APPEAL IN ITA NO.119(ASR)2011 & ITA NO.120(ASR)/2011 ALONG WITH T HEIR ADJUDICATION ARE REPRODUCED BELOW. ITA NO.119(ASR)/2011 FOR ASST. YEAR 2002-03 GROUND NO.3- THAT THE LEARNED CIT(A) ERRED ON FACT S AND IN LAW IN CONFIRMING THE DISALLOWANCE OF LEGAL AND PROFESSIONAL EXPENSES OF RS.1.25,27,450/- MADE 15. ITA NO S.759 TO 762 (ASR)/2013 ASST. YE ARS 2002-03 TO 2005-06 BY THE AO BEING THE RETAINERSHIP FEES PAID TO MAX U K LIMITED FOR PROVIDING VARIOUS BUSINESS SUPPORT SERVICES. 64. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. WE FIND THAT THE IMPUGNED PAYMENT HAS BEEN MADE PUR SUANT TO AGREEMENT ENTERED INTO BETWEEN THE ASSESSEE AND THE FOREIGN P ARTY. IT IS NOT THE CASE OF THE AO AND LD. CIT(A) THAT THE AFORESAID AGREEMENT IS B OGUS AND THAT THE PAYMENT HAS NOT BEEN MADE BY THE ASSESSEE TO THE AFORESAID PARTY. THE NATURE OF SERVICES RENDERED BY THE FOREIGN PARTY IS ALSO SUPP ORTED WITH INVOICE RAISED BY THE SAID PARTY AND THE AGREEMENT. IN OUR VIEW, CONS IDERING THAT THE NATURE OF SERVICES PROVIDED BY THE FOREIGN PARTY, WHICH WERE IN THE NATURE OF LIAISON SERVICES, IT IS DIFFICULT FOR THE ASSESSEE TO PROVI DE EVIDENCE OF RENDERING OF SUCH SERVICES. THE ASSESSE HAS, IN FACT, POINTED OUT IT IS ABLE TO ACHIEVE THE EXPORT TURNOVER OF RS. 29 CRORES WHICH PRIMA FACIE DEMONS TRATE THAT THE SERVICES WERE RENDERED BY THE FOREIGN PARTY. THE AO APART FROM AL LEGING THAT NO DOCUMENTARY EVIDENCE COULD BE FURNISHED BY THE ASSESSEE HAS NO T PROVIDED ANY EVIDENCE LIKE OBTAINING CONFIRMATION FROM THE FOREIGN PARTY ETC., BEFORE MAKING DISALLOWANCE AFTER THE INITIAL ONUS PLACED ON THE ASSESSE BY BR INGING ON RECORD THE AGREEMENT WITH FOREIGN PARTY AND INVOICE RAISED BY THAT PARTY WAS DISCHARGED BY THE ASSESSEE. 64.1. IN VIEW OF THE MATTER FOR THE AFORESAID CUMUL ATIVE REASONS, WE REVERSE THE ACTION OF THE AO/LD. CIT(A) IN DISALLOWING THE AFORESAID EXPENDITURE AND ACCORDINGLY, WE DIRECT THE DELETION OF THE SAID DI SALLOWANCE. THUS, GROUND NO.3 OF THE ASSESSEE IS ALLOWED. ITA NO.120(ASR)/2011 FOR ASST. YEAR 2003-04 85. IN GROUND OF THE ASSESSEE, THE ASSESSEE HAS CH ALLENGED THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE DISALLOWANCE OF RS. 1 5 LACS ON ACCOUNT OF LEGAL AND PROFESSIONAL FEE PAID TO MAX UK LIMITED. 85.1 THE AFORESAID GROUND OF APPEAL IS IDENTICAL TO GROUND OF APPEAL NO.3 IN ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2002-03 W HERE WE HAVE DECIDED THE AFORESAID ISSUE IN FAVOUR OF THE ASSESSEE AND HAS A LLOWED THE GROUND RAISED BY THE ASSESSEE IN THE ASSESSMENT YEAR 2002-03. BOTH T HE PARTIES ALSO DID NOT 16. ITA NO S.759 TO 762 (ASR)/2013 ASST. YE ARS 2002-03 TO 2005-06 ADDRESS ANY ADDITIONAL ARGUMENT WITH RESPECT TO THE AFORESAID GROUND IN THE PRESENT APPEAL AND AGREED THAT THE FACTS OF THIS GR OUND ARE IDENTICAL TO THE GROUND OF APPEAL FOR THE ASSESSMENT YEAR 2002-03. A CCORDINGLY, FOLLOWING OUR OWN ORDER FOR THE ASSESSMENT YEAR 2002-03 IN ASSESS EES OWN CASE DECIDED HEREINABOVE, THE DISALLOWANCE MADE IN THE ASSESSMEN T ORDER IS DIRECTED TO BE DELETED. THUS, OF APPEAL OF THE ASSESSEE IN THE PRE SENT YEAR IS ALLOWED. 5. THE LEARNED DR COULD NOT CONTROVERT THE ABOVE F ACTS AND THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDERS OF LEARNED CIT (A), WHO HAS FOLLOWED THE TRIBUNAL ORDERS IN THE CASE OF ASSESSEE ITSELF. IN VIEW OF THE ABOVE, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. 6. IN THE RESULT, THE APPEALS FILED BY THE REVENUE AR E DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH OCTOBER, 2015. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTA NT MEMBER DATED: 27.10.2015. /PK/ PS. COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: M/S MAX INDIA LTD. NAWANSHAHAR. 2. THE ASST. COMMISSIONER OF INCOME TAX, RANGE-II, JAL ANDHAR. 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.