Appeal Details
Counselvise Citation
[2011] 134 COUNSELVISE.COM (IT) 3652 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 month(s) 19 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
30-06-2011
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
I
Next Hearing Date
29-06-2011
Assessment Year
2007-2008
Appeal Filed On
10-02-2011
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH I NEW DELHI) BEFORE SMT. DIVA SNGH, JUDICIAL MEMBER AND SHRI B.K. HALDAR, ACCOUNTANT MEMBER I.T.A. NO.813/DEL/2011 ASSESSMENT YEAR : 2007-08 DCIT, M/S JAPFA COMFEED INDIA CIRCLE-4 (1), PVT. LTD., 306-CORPORATE TOWER, NEW DELHI. V. 85-A, ZAMRUDPUR, GK PART-I, NEW DELHI. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AAACJ AAACJ AAACJ AAACJ- -- -1855 1855 1855 1855- -- -B BB B APPELLANT BY : SHRI KISHORE B. SR. DR. RESPONDENT BY : SHRI DALIP KAUL, C.A. ORDER PER B.K. HALDAR, AM: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORD ER OF LD CIT(A)- VII, NEW DELHI DATED 3.12.2010 FOR ASSESSMENT YEAR 2007 -08 WHEREIN LD CIT(A) HAS CANCELLED PENALTY IMPOSED U/S 271(1)( C ) OF THE INCOME TAX ACT, 1961. THE REVENUE HAS TAKEN FOLLOWING GROU NDS OF APPEALS:- 1. THE ORDER OF THE LD CIT(A) IS ERRONEOUS AND CONTRARY TO FACTS AND LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) HAS ERRED IN DELETING THE PENALTY OF `.2,4 4,221/- LEVIED BY THE ASSESSING OFFICER U/S 271(1)( C) OF THE INCOME TA X ACT, 1961. PAGE 2 OF 14 ITA NO813/DEL/2011 3. THE LD CIT(A) HAS IGNORED THE FACT THAT THE ASSESSEE FU RNISHED INACCURATE PARTICULARS OF ITS INCOME BY CLAIMING NON ALLOWABLE EXPENSES ON ACCOUNT OF INCREASE OF SHARE CAPITAL AND BY UNDER VALUING THE SALE PRICE OF PLOT OF LAND SOLD. 4. THE APPELLANT CRAVES LEAVE TO ADD, OR AMEND AND ALTE R ANY GROUNDS OF THE APPEAL RAISED ABOVE AT THE TIME OF HEA RING. 2. THE ASSESSEE FURNISHED RETURN OF INCOME DECLARING TO TAL LOSS OF `.7,67,68,423/- ON 31.10.2007. THE SAME WAS PROCESSED U /S 143(1) ON 25.2.2009 AND SUBSEQUENTLY TAKEN UNDER SCRUTINY. DUR ING THE ASSESSMENT PROCEEDINGS,, IT WAS NOTED BY THE ASSESSING OFFICE R THAT THE ASSESSEE SOLD LAND AT PUNE FOR A CONSIDERATION OF `.1 8 LAKHS AND ACCORDINGLY WORKED OUT LONG TERM CAPITAL LOSS ON SALE OF SUCH PROPERTY. HOWEVER, THE VALUATION OF THE LAND WAS ADOPTED BY STA MP VALUATION AUTHORITY AT `.20 LAKHS. THE ASSESSEE WAS, THEREFORE, AS KED TO SHOW CAUSE AS TO WHY THE CAPITAL LOSS ON SALE OF THE SAID PROP ERTY SHOULD NOT BE WORKED OUT AS PER THE PROVISIONS OF SECTION 50C OF THE ACT. IN RESPONSE, THE ASSESSEE FILED A REVISED COMPUTATION OF CAP ITAL GAINS IN ACCORDANCE WITH SECTION 50C OF THE ACT. THE ASSESSING O FFICER WAS ALSO SATISFIED THAT PENALTY PROCEEDINGS U/.S 271(1)( C) OF T HE ACT IS REQUIRED TO BE INITIATED AS THE ASSESSEE HAS FURNISHED INACCURATE P ARTICULARS OF INCOME WITH REFERENCE TO THE ABOVE. 3. SIMILARLY, IT WAS NOTED BY THE ASSESSING OFFICER THAT THE EXPENSES RELATING TO INCREASE IN AUTHORIZED SHARE CAPITAL WER E AMORTISED DURING THE YEAR AS DEFERRED REVENUE EXPENDITURE. THE ASSESSEE W AS ASKED TO SHOW CAUSE AS TO WHY THE SAME SHOULD NOT BE DISALLOWED AS THE AMOUNT WAS NOT ALLOWABLE IN VIEW OF THE HON'BLE APEX COURTS JUDGMENT IN THE CASE OF BROOKE BOND INDIA LTD. V. CI T (1997) 225 ITR 798 AND HON'BLE DELHI HIGH COURTS JUDGMENT IN THE C ASE OF CIT V. PAGE 3 OF 14 ITA NO813/DEL/2011 HINDUSTAN INSECTICIDES LTD. (2001) 250 ITR 338. IT W AS CONTENDED BY THE ASSESSEE VIDE ITS LETTER DATED 30.11.2009 THAT THE F UNDS RAISED BY INCREASING IN AUTHORIZED SHARE CAPITAL WERE USED FOR EXPANSION OF BUSINESS AND HENCE THE CLAIM WAS ALLOWABLE U/.S 35D(II) OF THE ACT. THE ABOVE CLAIM OF THE ASSESSEE WAS NOT ACCEPTED BY THE ASSESSIN G OFFICER IN VIEW OF THE JUDGMENTS CITED ABOVE AND AN AMOUNT O F `.5,25,554/- WAS DISALLOWED BY THE ASSESSING OFFICER ON THIS ACCOUNT. HE ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1)( C) OF THE A CT WITH REFERENCE TO THE ABOVE. 4. DURING THE PENALTY PROCEEDINGS U/S 271(1)( C) IN I TS REPLY DATED 14.5.2010 THE ASSESSEE REQUESTED THE ASSESSING OFFICER TO DR OP THE SAID PENALTY PROCEEDINGS BY CONTENDING THAT THE OMISSI ONS WERE BONA FIDE IN NATURE AND THEREFORE PENALTY U/S 271(1)( C) OF THE ACT WAS NOT EXIGIBLE. THE ASSESSING OFFICER DID NOT ACCEPT THE AB OVE CONTENTION OF THE ASSESSEE AS ACCORDING TO HIM THE ASSESSEE WAS REQUIRED I N THE FIRST STAGE NOT TO CLAIM SUCH EXPENSES AND WAS ALSO REQUIRED TO WORK OUT CAPITAL GAINS AS PER THE PROVISIONS OF THE ACT. AS THE ABOVE WAS DONE ONLY AFTER THE SAME WAS POINTED OUT BY THE ASSESSING OFFI CER, IT WAS HELD THAT THE ASSESSEE WAS LIABLE TO PENALTY U/S 271(1)( C) OF THE ACT. HE, THEREFORE, IMPOSED MINIMUM PENALTY OF `.2,44,221 /- BEING 100% OF TAX SOUGHT TO BE EVADED. 5. AGGRIEVED THE ASSESSEE FILED THE APPEAL BEFORE THE LD CIT(A) 6. THE SUBMISSIONS OF THE ASSESSEE BEFORE LD CIT(A) WERE AS UNDER:- DURING THE APPELLATE PROCEEDINGS IT WAS SUBMITTED ON BEHALF OF THE APPELLANT, INTER ALIA, THAT PAGE 4 OF 14 ITA NO813/DEL/2011 'DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSEE HAS SUBMITTED COMPUTATION OF INCOME AS DESIRED BY DCIT WHE REIN THE UNINTENTIONAL MISTAKE OF RS. 200000/- BEING THE LESSER CONSIDERATION RECEIVED BY THE ASSESSEE AND SHOWN IN COMPUTATION OF CAPITAL GAINS WAS RECTIFIED / EXPLAINE D. IT IS PERTINENT TO MENTION THAT ASSESSEE HAS IN FACT RECEIVED RS. 18.00 LACS ONLY AGAINST THE CIRCLE RATE OF LLS. 20.00 LACS. ON PERUSAL OF COMPUTATION OF' INCOME READ WITH ASSESSMENT ORDER, IT I S EVIDENT THAT THE INTENTION OF THE ASSESSEE WAS NOT MALAFIDE AND MERE OMISSION TO CLAIM CAPITAL LOSS AT RS. 607926/- INSTEAD O F RS. 407926/(AS ASSESSED BY AO) WAS AN INADVERTENT / UNINTENT IONAL. LEARNED DCIT ASSESSED THE LOSSES FOR THE YEAR AT RS. 762428 69/- BASED ON THE RECTIFIED COMPUTATION OF INCOME FILED. KEEPING IN VIEW THE QUANTUM OF LOSSES FOR THE YEAR AND EXISTING BR OUGHT FORWARD LOSSES, IT CANNOT BE CONCLUDED THAT THE ASSESSEE H AS CONCEALED INCOME OR FILED IN ACCURATE PARTICULARS OF INCOME FOR A NOMINAL AMOUNT OF RS. 2.00 LACS. IT IS PERTINENT TO M ENTION THAT THE ASSESSEE HAS ALSO FAILED TO CLAIM BROKERAGE PAID ON THE SAID DEAL AMOUNT TO RS. 60000/-. MERE OMISSION TO COMPUTE CAPITAL GAINS ON CIRCLE RATE DOES NEITHER AMOUNT TO CONCEALMENT NOR DELIBERATE FURNISH ING OF INACCURATE PARTICULARS OF INCOME UNLESS AND UNTIL THER E IS SOME EVIDENCE TO SHOW OR SOME CIRCUMSTANCES FOUND FROM WHICH IT CAN BE GATHERED THAT THE OMISSION WAS ATTRIBUTABLE TO AN I NTENTION OR DESIRE ON THE PART OF THE ASSESSEE TO HIDE OR CONCEAL TH E INCOME SO AS TO AVOID IMPOSITION OF TAX THEREON. YOUR KIND AT TENTION IS INVITED TO APEX COURT JUDGMENT IN THE CASE OF K C BU ILDERS VS. CIT (2004) 135 TAXMAN 461 (SC) WHEREIN IT WAS HELD, THAT A PENALTY PAGE 5 OF 14 ITA NO813/DEL/2011 MAY BE IMPOSED IF THE ASSESSEE HAS CONSCIOUSLY MADE THE CONCEALMENT OR FURNISHED INACCURATE PARTICULARS OF IN COME. A MERE OMISSION OR NEGLIGENCE WOULD NOT CONSTITUTE A DE LIBERATE ACT OF SUPPRESSIO VERI OR SUGGESTIO FALSI AS HELD IN T. ASH OK PAI VS. CIT 2007 210 CTR (SC) 228. IT HAS ALSO BEEN HELD IN D ILIP N SHROFF VS CIT 2007 161 TAXMAN 221 (SC) THAT THE PENALTY CAN BE IMPOSED IF THE ENTIRETY OF CIRCUMSTANCES REASONABLY POI NT TO THE CONCLUSION THAT THE DISPUTED AMOUNT REPRESENTED INCOME AND THAT THE ASSESSEE HAD CONSCIOUSLY CONCEALED THE PARTICULA RS OF INCOME OR HAD FURNISHED INACCURATE PARTICULARS THEREO F IN THIS CASE ALSO ENTIRETY OF CIRCUMSTANCES SUGGESTS THAT THE AS SESSEE HAD NOT CONSCIOUSLY CONCEALED THE PARTICULARS OF INCOM E. IT WAS MERELY AN OMISSION WHICH WAS ACCORDINGLY RECTIFIED / SU BMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. LD. DCIT HAS ALSO COMPLETED THE ASSESSMENT AND DETERMINED THE LOSSES ON THE RECTIFIED COMPUTATION OF INCOME SUBMITTED DURING THE ASSESSMENT PROCEEDINGS AS IS EVIDENT FROM ASSESSMENT ORDER DATED 21.12.2009. IT HAS ALSO BEEN HELD IN VARIOUS COURTS THAT IN THE COU RSE OF LEVY OF PENALTY, THERE SHOULD ALWAYS BE MENS REA WHICH MEA NS EVIL INTENTION OR KNOWLEDGE OF WRONGFULNESS OF THE ACT TH AT A PERSON COMMITS. THE INTENTION OF THE LEGISLATURE TO LEVY PEN ALTY UNDER SECTION 271 (L)(C) IS THAT THE ASSESSEE IS NOT TO BE PENAL IZED UNLESS THE NECESSARY MENTAL ELEMENT COULD BE SPELT OUT I N HIS ACT FROM THE MATERIAL ON RECORD THAT THE ACT HAS BEEN C OMMITTED WITH EVIL INTENTION. THE DELETION OF WORD 'DELIBERA TELY' FROM THE TEXT OF SECTION 271 (L )(C) OF THE FINANCE ACT 1964 DOES NOT SEEM TO ALTER THE LAW ON THE POINT AS STILL THE EXPRESSION C ONCEALMENT WOULD REQUIRE THE MENTAL ELEMENT TO BE ESTABLISHED. I N OTHER PAGE 6 OF 14 ITA NO813/DEL/2011 WORDS FOR LEVY OF PENALTY THERE SHOULD ALWAYS BE MENS R EA. IN THIS CASE ALSO THE ASSESSEE HAS NOT CONCEALED THE PARTICULARS O F INCOME WITH ANY EVIL INTENTION OR HAVING KNOWLEDGE OF WRONGFULNESS OF THE ACT. IT WAS MERELY AN OMISSION WHICH WAS ACCORDINGLY RECTIFIED / SUBMITTED DURING THE COURSE O F ASSESSMENT PROCEEDINGS. SIMILARLY LD. DCIT HAS LEVIED PENALTY ON DISALLOWANCE U/S 35D AS PER PARA 5 AND 6 OF THE ASSESSMENT ORDER DATED 21.12.2009. IT IS PERTINENT TO MENTION T HAT WHILE INITIATING PENALTY U/S 271 (L)(C) VIDE PARA 08 OF ASSE SSMENT ORDER DATE 21.12.2009 NO MENTION OF INITIATION OF PENALTY HAS BEEN MADE ON PARA 5 AND 6 OF THE ORDER. THE DISALLOWANCE U/S 35D OF THE INCOME TAX ACT HAS BEEN MADE BY INVOKING DELHI H IGH COURT JUDGMENT IN THE CASE OF CIT VS. HINDUSTAN INSECTICIDES L TD. 250 ITR 338 (2001).IN ORDER TO ATTRACT PENALTY PROVISION S OF 271 (L)(C), THERE HAS TO BE CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE. IN THE INSTANT CASE ASSESSEE CLAIMED DEDUCTION ON ACCOUNT OF EXPENDITUR E INCURRED ON INCREASE IN AUTHORIZED SHARE CAPITAL OF THE COMPANY FOR THE PURPOSE OF INFUSION OF MORE CAPITAL FOR BUSINE SS EXPANSION. NO INFORMATION PERTAINING TO THIS EXPENDIT URE WAS FOUND TO BE INCORRECT OR INACCURATE. THE ASSESSEE CANNO T BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. LD. DCIT HAS DISALLOWED THE SAID EXPENDITURE IN VIEW OF THE DELHI HIGH COURT JUDGMENT IN THE CASE OF CIT VS. HINDUSTAN INSECTICIDES L TD. THE DISALLOWANCE HAS BEEN MADE MERELY ON THE INTERPRETATI ON OF ABOVE JUDGMENT. EVEN IF THE ASSESSEE HAS MADE AN INCORRE CT CLAIM IN LAW, IT CANNOT TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS. MERELY BECAUSE THE ASSESSEE CLAIMED DEDUCTI ON WHICH HAS NOT BEEN ACCEPTED BY THE REVENUE, PENALTY PROVISIONS U/S 271 (L)(C) OF INCOME TAX ACT, 1961 CANNOT BE INI TIATED. PAGE 7 OF 14 ITA NO813/DEL/2011 YOUR KIND ATTENTION IS INVITED TO RECENT SUPREME COU RT JUDGMENT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS LTD. (2 010) 230 CTR (SC) 320. IT HAS BEEN HELD THAT MERELY BECAUSE ASSE SSEE CLAIMED DEDUCTION OF EXPENDITURE WHICH HAS NOT BEEN ACCEPTED BY THE REVENUE, PENALTY UNDER SECTION 271 (L)(C) IS N OT ATTRACTED; MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN THE LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING OF INACCURATE P ARTICULARS REGARDING THE INCOME OF THE ASSESSEE. IF THE CONTENTIO N OF THE REVENUE IS ACCEPTED THEN IN CASE OF EVERY RETURN WHER E THE CLAIM MADE IS NOT ACCEPTED BY AD FOR ANY REASON, THE ASSESSEE WOULD ATTRACT PENALTY U/S 271 (L)(C). THAT IS CLEARLY NOT THE INTENTION OF LEGISLATURE. IT IS FURTHER SUBMITTED THA T THE ASSESSEE IS AN HONEST TAX PAYER AND HAS BEEN COOPERATING IN ASSE SSMENT PROCEEDING FOR THE LAST SEVERAL YEARS. THERE ARE NO A DVERSE COMMENTS OR REPORTS AGAINST THE ASSESSEE. ASSESSEE BEING VER Y HONEST HAS NOT EVEN CONTESTED THESE DISALLOWANCES AT ANY APPELLATE FORUM. KEEPING IN VIEW THE ABOVE FACTS, CIRCUMSTANCES, JUDIC IAL PRONOUNCEMENTS AND TRACK RECORD OF THE ASSESSEE LEVY OF PENALTY UNDER SECTION 271 (L)(C) OF INCOME TAX ACT, 1961 WOU LD BE UNJUST AND UNCALLED FOR. ASSESSEE IS A MULTINATIONAL COMPANY AN D ANY LEVY OF PENALTY UNDER THESE CIRCUMSTANCES WILL SHAKE TH E FAITH AND CONFIDENCE OF THE ASSESSEE IN THE INDIAN JUDICIAL SY STEM. IT IS PRAYED THAT THE PENALTY LEVIED BY LEARNED DCIT UNDE R SECTION 271 (L)(C) OF INCOME TAX ACT, 1961 MAY KINDLY BE DE LETED IN 'TOTO PAGE 8 OF 14 ITA NO813/DEL/2011 6. LD CIT(A) AFTER CONSIDERING THE FACTS AND CIRCUMSTA NCES OF THE CASE HELD AS UNDER:- 5.1. IN THE INSTANT CASE, THE ASSESSEE HAD NOT FURNISHED THE INACCURATE PARTICULARS OF HIS INCOME WHEN IT FURNISHED THE RETURN. THERE IS ONLY DIFFERENCE OF OPINION ON THE RELEVANT ISSUES. HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. AJ AIB SINGH & CO. [2002] 253 ITR 630 HAVE OBSERVED THAT MERELY BEC AUSE OF CERTAIN EXPENSES CLAIMED BY THE ASSESSEE ARE DISALLOWED BY AN AUTHORITY, IT CANNOT MEAN THAT PARTICULARS FURNISHED BY THE ASSESSEE WERE WRONG. IT WAS HELD THAT MERE DISALLOWANCE O F EXPENSES PER SE CANNOT MEAN THAT ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME. IT IS REPEATEDLY HELD BY THE COURTS THAT THE PENALTY ON THE GROUND OF CONCEALMENT OF PARTICULARS OR NON-DISCLOSURE OF FULL PARTICULARS CAN BE LEVIED ONLY WHEN IN THE ACCOUNTS/RETURN AN ITEM HAS BEEN SUPPRESSED DISHONESTLY OR THE ITEM HAS BEEN CLAIMED FRAUDULENTLY OR A BOGUS CLAIM HAS BEEN MADE. WHEN THE FACTS ARE CLEARLY DISC LOSED IN THE RETURN OF INCOME, PENALTY CANNOT BE LEVIED AND MERE LY BECAUSE AN AMOUNT IS NOT ALLOWED OR TAXED TO INCOME, AS IT CA NNOT BE SAID THAT THE ASSESSEE HAD FILED INACCURATE PARTICULARS OR CO NCEALED ANY INCOME CHARGEABLE TO TAX. FURTHER, CONSCIOUS CON CEALMENT IS NECESSARY. EVEN IF SOME DEDUCTION OR BENEFIT IS CLAIM ED BY THE ASSESSEE WRONGLY BUT BONA FIDE AND NO MALA FIDE CAN BE ATTRIBUTED, THE PENALTY WOULD NOT BE LEVIED. RELIAN CE IS ALSO PLACED ON THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS P . LTD.(2010) 322 ITR 158 . 5.2. FROM THE DISCUSSION MADE ABOVE, IT CAN BE CONCLUD ED THAT MERE DISALLOWANCE OR ADDITION WILL NOT BE SUFFICIENT FOR LEVY OF PAGE 9 OF 14 ITA NO813/DEL/2011 SPENALTY U/S 271 (L)( C). IN VIEW OF THE ABOVE AND TA KING INTO CONSIDERATION THE FACTS (A) THAT THE APPELLANT HAD DI SCLOSED ALL MATERIAL FACTS AND (B) RAISING A LEGAL CLAIM, EVEN IF IT IS ULTIMATELY FOUND TO BE LEGALLY UNACCEPTABLE, CANNOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME, I HOLD THAT THERE IS NO CASE OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS O F ITS INCOME IN RESPECT OF THE DISALLOWANCES MADE ON ACCOUNT OF (A) CAPITAL GAINS AMOUNTING TO RS.2,OO,OOO/- AND (B) DISALLOWANCE OF RS. 5,25,554/- CLAIMED BY THE ASSESSEE AS DEFERRED REVENUE EXPENDITURE UNDER SECTION 35D OF THE ACT. THEREFORE, IT IS HELD THAT A.O. WAS NOT JUSTIFIED IN IMPOSING PENALTY U/S 271 (1)(C) AMOUNTING TO RS. 2,44,221/-. ACCORDINGLY, THE SAME IS CANCELLED. 7. AGGRIEVED REVENUE HAS FILED THE APPEAL BEFORE THE TRIBUNAL. 8. BEFORE US, LD DR CONTENDED THAT THE CLAIM OF THE ASSESSEE U/S 35D OF THE ACT WAS PATENTLY A WRONG CLAIM IN VIEW OF THE DECISIONS CITED BY THE ASSESSING OFFICER. IN SUCH CIRCUMSTANCES, PEN ALTY U/S 271(1)(C ) IS LEVIABLE. IN SUPPORT OF THE ABOVE PROP OSITION, HE RELIED ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. ESCORT FINANCE LTD. REPORTED IN 328 ITR 44. 9. IT WAS FURTHER CONTENDED BY HIM THAT THE HON'BLE APEX COURTS JUDGMENT IN THE CASE OF RELIANCE PETROPRODUCTS LTD. ( SUPRA) IS DISTINGUISHABLE IN THE FACTS OF THE PRESENT CASE. IN TH E SAID CASE ALL PARTICULARS OF INCOME WERE AVAILABLE AND THERE WAS N O FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. THE ISSUE INVOLVED WAS DEBATABLE AND THEREFORE IT WAS HELD BY THE APEX COURT THAT NO PENA LTY U/S 271(1) ( C) PAGE 10 OF 14 ITA NO813/DEL/2011 WAS EXIGIBLE IN THAT CASE. THE FACTS OF THE PRESENT C ASE ARE NOT THE SAME. IT WAS, THEREFORE, CONTENDED THAT LEVY OF PENAL TY U/S 271(1)( C) MAY PLEASE BE UPHELD. 10. IN THE REJOINDER, IT WAS SUBMITTED BY THE LD AR F OR THE ASSESSEE THAT THE REVISED COMPUTATION FILED BY THE ASSESSEE WHICH IS AVAILABLE IN ASSESSEES PAPER BOOK PAGE 11 WAS ACCEPTED BY THE ASSESSING O FFICER AND THEREFORE NO PENALTY U/S 271(1)(C ) WAS EXIGIBLE. IT WAS ALSO CONTENDED THAT THERE WAS NO INTENTION ON THE PART OF THE ASSESSEE TO CLAIM EXCESS CAPITAL LOSS AS EVEN OTHERWISE THERE WAS HUGE LOSS INCURRED BY THE ASSESSEE. THE RATIO LAID DOWN BY THE HON'BLE APEX COURT IN RELIANCE PETROPRODUCTS LTD., WAS APPLICABLE IN THE FACTS OF THE PRESENT CASE. HE ALSO RELIED ON THE ORDER OF THE LD C IT(A). 11. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. IN THE PRESENT CASE, THE REVENUE HAS NOT BROUGHT ON RECORD AN Y EVIDENCE TO SHOW THAT RELEVANT PARTICULARS REQUIRED FOR COMPUTATI ON OF CAPITAL GAIN/LOSS OR FOR COMPUTATION OF DEDUCTION U/S 35D WERE WRONGLY FURNISHED BY THE ASSESSEE. IT IS NOT THE CASE OF THE REVE NUE THAT THE COPY OF SALE DEED OF THE IMPUGNED PROPERTY WAS NOT AC COMPANIED ALONG WITH THE RETURN OF INCOME OR THAT IN THE CLAI M MADE U/S 35D OF THE ACT, IT WAS NOT MENTIONED BY THE ASSESSEE THAT EXPEN SES INCURRED FOR INCREASING IN THE SHARE CAPITAL OF THE COMPANY W AS INCLUDED THEREIN. THE HON'BLE JURISDICTIONAL HIGH COURTS JUDG MENT IN THE CASE OF CIT V. ESCORTS FINANCE LTD. (SUPRA) THUS SUPPORT THE CASE OF THE REVENUE WHEREIN THE JURISDICTIONAL HIGH COURT HAS OPI NED THAT EVEN IF THERE WAS NO CONCEALMENT OF INCOME OR FURNISHING OF I NACCURATE PARTICULARS BUT ON THE BASIS THEREOF THE CLAIM WHICH W AS MADE WAS EX FACIE BOGUS, IT COULD ATTRACT PENALTY PROVISION. THE HON'BLE COURT WAS ALSO DECIDING LEVIABILITY OF PENALTY U/S 271(1)( C) O F THE ACT IN CASE OF A CLAIM U/S 35D OF THE ACT. ACCORDING TO THE HON'BLE H IGH COURT IN THE CASE OF FALSE CLAIM MADE BY THE ASSESSEE PENALTY U/S 271(1 )( C) OF THE PAGE 11 OF 14 ITA NO813/DEL/2011 ACT COULD BE ATTRACTED AND NOT WHEN MERELY A WRONG CLAIM IS MADE BY THE ASSESSEE. THIS JUDGMENT OF HON'BLE JURISDICTIONAL HIG H COURT WAS PASSED ON 24 TH DAY OF AUGUST, 2009. 12. WE ARE, THEREFORE, NOW REQUIRED TO LOOK INTO TH E ASPECT AS TO WHETHER THE HON'BLE APEX COURTS JUDGMENT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) WHICH WAS DELIVERED ON 17.3.2010, COULD BE CONSIDERED TO HAVE OVER-RULED THE ABOVE JUD GMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT. IN THE SAID JUDGME NT THE HON'BLE APEX COURT HAS EXPLAINED THE NATURE OF THE PROVISION OF SECTION 271(1) ( C) AS WELL AS DEFINED ONE OF THE MOST IMPORTANT EXPR ESSION USED IN THE SAID SECTION NAMELY INACCURATE PARTICULARS. THE AMBIT OF THE PROVISION AS EXPLAINED BY THE HON'BLE APEX COURT IN T HE SAID JUDGMENT HAS UNIVERSAL APPLICATION IRRESPECTIVE OF THE OTHER FA CTS OBTAINED IN A PARTICULAR CASE. IT HAS BEEN CLEARLY HELD BY THE HON 'BLE APEX COURT THAT THE PROVISION OF SECTION 271(1)( C) LAYS DOWN A STRICT LIABILITY I.E. TO SAY THAT UNLESS ALL THE CONDITIONS MENTIONED IN THE SAID SECTION ARE FULFILLED, NO PENALTY U/S 271(1)( C) OF THE ACT WOUL D BE EXIGIBLE. IN THIS CONTEXT, THE EXPRESSION INACCURATE PARTICULARS HAS BE EN EXPLAINED BY THE HON'BLE APEX COURT. BY NOTICING THAT THE MEANI NG OF THE WORD PARTICULAR IS A DETAIL OR DETAILSD (IN PLURAL SENSE), THE DETAIL OF A CLAIM, OR THE SEPARATE ITEMS OF AN ACCOUNT, THE HON'BLE APEX COURT HELD THAT SUBMITTING AN INCORRECT CLAIM IN LAW FOR A PARTICULA R EXPENDITURE CANNOT BE CONSTRUED AS FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. THE HON'BLE COURT ALSO NOTED THE MEANING OF THE WORD INACCURATE WHICH IS AS UNDER:- NOT ACCURATE, NOT EXACT, OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS; AS AN INACCURATE STATEMENT, COPY OR TRANSCRI PTION 13. LEADING THE WORDS PARTICULARS AND INACCURATE IN CONJUNCTION, IT WAS HELD BY THE HON'BLE COURT THAT THE EXPRESSION F URNISHING OF INACCURATE PARTICULARS OF INCOME WOULD MEAN THAT THE DETAILS SUPPLIED PAGE 12 OF 14 ITA NO813/DEL/2011 IN THE RETURN WERE NOT ACCURATE, NOT EXACT OR CORRE CT, NOT ACCORDING TO TRUTH OR ERRONEOUS. IF THE DETAILS SUPPLIED BY THE ASSE SSEE WERE NOT INCORRECT OR ERRONEOUS OR FALSE BUT THE ASSESSEE MERELY M ADE A CLAIM WHICH WAS NOT SUSTAINABLE IN LAW THE SAME WOULD NOT AM OUNT TO FURNISHING OF INACCURATE PARTICULARS REGARDING THE IN COME OF THE ASSESSEE. 14. THE ABOVE OBSERVATION OF THE HON'BLE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA) HAVE UNIVERSA L APPLICATION AND WOULD THUS NULLIFY THE JUDGMENT OF THE HON'BLE JURISD ICTIONAL HIGH COURT IN THE CASE OF ESCORTS FINANCE LTD. (SUPRA). IN THE PR ESENT CASE, IT HAS NOT BEEN SHOWN BY THE REVENUE THAT THE ASSESSEE FURNISHE D INACCURATE PARTICULARS OF INCOME, THE MEANING OF W HICH HAS BEEN EXPLAINED BY THE HON'BLE APEX COURT IN THE CASE OF R ELIANCE PETROPROUCTS PVT. LTD. (SUPRA). IN THIS VIEW OF THE MA TTER, WE HAVE NO HESITATION IN HOLDING THAT IN THE FACTS OF THE PRESEN T CASE, THE RATIO LAID DOWN BY THE HON'BLE APEX COURT IN THE CASE OF RELIAN CE PETROPRODUCTS PVT. LTD. (SUPRA) IS SQUARELY APPLICABLE AND NO PENA LTY U/S 271(1)( C) OF THE ACT IS EXIGIBLE, WE, THEREFORE, UPHOLD THE ORDE R OF THE LD CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE. 15. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. 16. ORDER PRONOUNCED IN THE OPEN COURT ON THE 30 TH DAY OF JUNE, 2011. SD/- SD/- (DIVA SINGH) (B.K. HALDAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 30.62011. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. PAGE 13 OF 14 ITA NO813/DEL/2011 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. (ITAT, NEW DELHI). DATE OF HEARING 29.6.2011 DATE OF DICTATION 29.6.2011 DATE OF ORDER SIGNED BY THE HON'BLE MEMBER. 29.6.2011 DATE OF ORDER SENT TO THE CONCERNED BENCH 30.6.2011 PAGE 14 OF 14 ITA NO813/DEL/2011
