ADIT, New Delhi V. M/s. Rolls Royce Singapore Pte Ltd., New Delhi

ITA 862/DEL/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7418 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 30-06-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 21-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V R SONBHADRA
• Assessee Lawyers: GAURAV GUPTA; S S TOMAR
• Keywords: Business income; Bonafide belief; Permanent establishment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH F NEW DELHI BEFORE : SHRI I.C. SUDHIR , JUDICIAL MEMBER & SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 862 TO 865/DEL./2012 ASSTT. YEAR S : 2001 - 02 TO 2004 - 05 A.C.I.T., CIRCLE 2(1), VS. ROLLS ROYCE SINGAPORE PTE LTD., NEW DELHI. C/O LUTHRA & LUTHRA, A - 16/9, VASANT VIHAR, NEW DELHI. (PAN: AACCR 6335E) (APPELLANT) (RESPONDENT) APPELLANT BY : SH. V.R. SONBHADRA, SR. DR RESPOND ENT BY : SH GAURAV GUPTA, ADVOCATE & SH. S.S. TOMAR, ADVOCATE DATE OF HEARING : 12.08.2016 DATE OF PRONOUNCEMENT : 24 .08.2016 ORDER PER L.P. SAHU, ACCOUNTANT MEMBER: THE SE ARE FOUR APPEALS FILED BY THE REVENUE AGAINST THE COMMON ORDER DATED 31.10.2011 OF LD. CIT(A) - XXIX, NEW DELHI FOR THE ASSESSMENT YEARS 2001 - 02 TO 2004 - 05 RESPECTIVELY CHALLENGING THE CANCELLATION OF PENALTIES, IMPOSED BY THE AO U/S. 271(1)(C) OF THE IT A CT IN EACH OF THESE CASES. THE GROUNDS RAISED IN ALL THESE FOUR APPEALS ARE ALTOGETHER COMMON, THEREFORE, THE GROUNDS OF APPEAL TAKEN IN APPEAL NO. 862/DEL./2012 ARE REPRODUCED HEREUNDER : ITA NO. 862 TO 865/DEL./2014 2 1. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT (A) HA S ERRED IN DELETING THE PENALTY IMPOSED U/S 271(1)(C) HOLDING THAT THE ASSESSEE DID NOT FURNISH INACCURATE PARTICULARS WHEN THE ASSESSEE DISCLOSED ITS BUSINESS INCOME ONLY IN RESPONSE TO NOTICES U/S 148, A MATTER RESTORED FOR VERIFICATION BY HIGH COURT TO AO. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT (A) HAS ERRED IN HOLDING THAT THE ASSESSEE COULD NOT BE HELD LIABLE FOR FURNISHING INACCURATE PARTICULARS OF INCOME EVEN WHEN, HAVING ITSELF RAISED THE INVOICES, IT DID NOT OFFER SAID INCOM E FROM FTS FOR TAXATION ON ACCRUAL BASIS, AN ISSUE WHICH STANDS ACCEPTED BY THE ASSESSEE AND CONFIRMED BY THE HON'BLE ITAT AND DELHI HIGH COURT. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN HOLDING THAT THERE WAS NO DEFAUL T ON THE PART OF THE ASSESSEE FOR FURNISHING INACCURATE PARTICULARS OF INCOME WHEN RECEIPTS FROM INVOICES RAISED BY IT WERE NOT OFFERED TO TAX ON MERCANTILE BASIS AS PER INCOME TAX ACT 1961, AND, THAT THE SAID CLAIM BESIDES BEING INCORRECT IN LAW WAS ALSO MALAFIDE AND, WOULD ATTRACT EXPLANATION 1 TO SECTION 271(1) A VIEW UPHELD BY JURISDICTIONAL HIGH COURT IN THE CASE OF KANCHENJUNJA ADVERTISING (P) LTD IN ITA NO. 944 OF 2011 VIDE ORDER DT. 13 JAN 2011. 4. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CAS E THE CIT(A) HAD ERRED IN DELETING THE PENALTY IMPOSED U/S 271(1)(C) BY HOLDING THAT THERE WAS NO MENS REA ON THE PART OF THE ASSESSEE IN NOT DISCLOSING ITS INCOME FROM FTS ON THE ACCRUAL BASIS WITHOUT APPRECIATING THE DECISION OF THE SUPREME COURT IN THE CASE OF UNION OF INDIA AND OTHERS V/S DHARMENDRA TEXTILES PROCESSORS AND OTHERS(306 ITR 227) IN WHICH IT WAS HELD THAT THE ELEMENT OF MENS REA IS NOT REQUIRED TO BE ESTABLISHED IN THE CASE OF PENALTY FOR CIVIL LIABILITY. 2. SINCE COMMON ISSUE IS INVOLVED IN ALL THESE APPEALS AND THE GROUNDS AND ARGUMENTS ADVANCED BY BOTH THE PARTIES ARE ALSO COMMON, HENCE, ALL THESE APPEALS ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF ITA NO. 862 TO 865/DEL./2014 3 CONVENIENCE AND BREVITY AND TO AVOID REPETITION. WE, THEREFORE, TAKE ITA NO. 682/DEL./2012 FIRST, THE DECISION ON WHICH SHALL ALSO OPERATE WITH RESPECT TO REMAINING THREE APPEALS. 3. THE BRIEF FACTS OF THE CASES ARE THAT THE ASSESSEE , ROLLS ROYCE SINGAPORE PTE. LTD. IS A COMPANY INCORPORATED UNDER THE LAWS OF SINGAPORE. THE ASSESSEE PRIMARILY ENGAGED IN SALE OF SPARE PARTS FOR OIL FIELD EQUIPMENT, ENGINES AND TURBINE COMPRESSOR SYSTEMS, AND ELECTRONIC RETROFIT PROJECTS AS WELL AS SERVICES IN CONNECTION WITH REPAIR AND OVERHAULING OF SUCH EQUIPMENT. DURING THE PERIOD RELEVANT TO ASSESSMENT YEAR, THE ASSESSEE WAS FOLLOWING CASH SYSTEM OF ACCOUNTING IN INDIA AND ACCORDINGLY, THE ASSESSEE FILED ITS RETURN OF INCOME ON 31.12.2003 DECLARING INCOME FROM FTS OF RS.26,07,430/ - U/S. 115A OF THE ACT BASED ON AC TUAL RECEIPT OF SUCH FEES AND SERVICES. THE INCOME OF THE ASSESSEE WAS ASSESSED AT RS.2,36,15,880/ - AS PROFITS ATTRIBUTABLE TO THE PERMANENT ESTABLISHMENT (PE) IN INDIA AGAINST SUPPLY TO INDIAN CUSTOMERS AND RS.96,85,586/ - AS FTS ON ACCRUAL BASIS VIDE ORD ER U/S. 143(3)/147 OF THE ACT. THESE ADDITIONS WERE CHALLENGED IN APPEAL BEFORE THE LD. CIT(A) . THE CIT(A) UPHELD THE ORDER OF THE AO OBSERVING THAT THE FTS SHALL BE TAXABLE ON ACCRUAL BASIS, HOWEVER, THE CIT(A) REDUCED THE ATTRIBUTION OF PROFIT TO THE PE , OF INDIAN SALES. THE ORDER OF CIT(A) WAS FURTHER CHALLENGED IN APPEAL BEFORE ITA NO. 862 TO 865/DEL./2014 4 THE ITAT BY THE ASSESSEE AS WELL AS THE REVENUE. THE ITAT, VIDE ORDER DATED MARCH 19, 2010, DISPOSED THE SAID APPEAL AND UPHELD THE ORDER OF THE CIT(A) REGARDING TAXABILITY OF F TS ON ACCRUAL BASIS. THE TRIBUNAL, HOWEVER, REDUCED THE ATTRIBUTION OF PROFIT FROM 25% TO 10%. THE ORDER OF THE TRIBUNAL WAS CHALLENGED BEFORE THE HON BLE HIGH COURT BY THE ASSESSEE AS WELL AS REVENUE, CHALLENGING THE EXISTENCE OF PE AND ATTRIBUTION OF PRO FIT THERETO. THE ASSESSEE, HOWEVER, DID NOT CHALLENGE THE ORDER OF THE ITAT ON THE ISSUE OF TAXABILITY OF FTS ON ACCRUAL BASIS OR CASH BASIS . THE HON BLE HIGH COURT SET ASIDE THE ISSUE RELATING TO THE EXISTENCE OF PE IN INDIA AND ATTRIBUTION OF PROFITS AN D RESTORED THE SAME TO THE AO FOR FRESH ADJUDICATION. SUBSEQUENTLY , PURSUANT TO THE ORDER OF THE ITAT, THE AO PASSED APPEAL EFFECT ORDERS DATED MAY 2, 2010 AND INITIATED PENALTY PROCEEDINGS, AND THEREAFTER, LEVIED PENALTY UNDER SECTION 271(1)(C)OF THE ACT , KEEPING IN VIEW THE AMOUNT OF INCOME TAXABLE AS FTS ON ACCRUAL BASIS AS AGAINST INCOME OFFERED TO TAX ON CASH BASIS AND THE AMOUNT OF PROFIT ATTRIBUTABLE TO THE PE OF ASSESSEE IN INDIA. DETAILS OF THE PENALTY LEVIED ON THE ABOVE GROUNDS ARE AS UNDER: A.Y. PENALTY LEVIED ON ACCOUNT OF FTS (RS) PENALTY LEVIED ON ACCOUNT OF PE (RS) TOTAL PENALTY LEVIED 2001 - 02 6,83,836 10,11,067 16,94,903 2002 - 03 9,29,437 21,00,148 30,29,585 2003 - 04 20,27,326 11,81,458 32,08,784 ITA NO. 862 TO 865/DEL./2014 5 2004 - 05 12,49,221 50,72,996 63,22,217 4. BEING AGGRIEVED, THE ASSESSEE APPEALED BEFORE THE FIRST APPELLATE AUTHORITY , WHO VIDE IMPUGNED ORDER DELETED THE PENALTY IMPOSED BY THE AO ON BOTH THE ACCOUNTS. THE LD. CIT(A) DELETED THE PENALTY IMPOSED IN RELATION TO PROFIT ATTRIBUTION MADE BY THE AO , AS THE HON'BLE DELHI HIGH COURT HAS REMANDED THE MATTER BACK TO THE AO FOR FRESH ADJUDICATION IN RELATION TO THE DETERMINATION OF PE OF THE ASSESSEE IN INDIA . FOR THIS, HE HAS TAKEN INTO ACCOUNT THE RELEVANT EXTRACTS OF THE JUDGMENT OF THE HIGH COURT IN PARA 4 5 TO 47, WHICH ARE REPRODUCED AT PAGE 4 OF THE IMPUGNED ORDER AND THE PENALTY IMPOSED IN RELATION TO ADDITION ON FTS OR DIFFERENT METHOD OF ACCOUNTING WAS ALSO DELETED BY THE LD. CIT(A) AFTER APPRAISAL OF VARIOUS SUBMISS IONS OF THE ASSESSEE. BEING AGGRIEVED, THE REVENUE HAS COME UP IN THESE APPEALS, WHEREIN THE CANCELLATION OF PENALTY IMPOSED IN RELATION TO ADDITION ON FTS ONLY HAS BEEN CHALLENGED AND FROM THE GROUNDS OF REVENUE IT APPEARS THAT THE DEPARTMENT HAS NOT APPE ALED AGAINST THE ORDER OF C I T ( A), DELETING THE PENALTY IN RELATION TO TAX ON PROFIT ATTRIBUTABLE TO THE PE. 5. THE LD. DR SUBMITTED THAT SINCE THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME, INASMUCH AS THE RECEIPTS ON FTS WERE TO BE OFFERED FOR ITA NO. 862 TO 865/DEL./2014 6 TAXATION ON ACCRUAL BASIS AND NOT ON CASH BASIS, THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE PENALTY SO IMPOSED BY THE AO. IT WAS SUBMITTED THAT THE AO HAD IMPOSED THE PENALTY U/S. 271(1)(C) AFTER APPLYING EXPLANATION 1 TO THE SAID SECTION, WHICH HAS NOT BEEN PROPERLY CONSIDERED BY THE LD. CIT(A). IT WAS SUBMITTED THE PENAL PROCEEDINGS UNDER THE INCOME - TAX ACT ARE INITIATED ON ECONOMIC OFFENCES COMMITTED BY ASSESSEE, WHERE THE ELEMENT OF MENS REA NEED NOT TO BE PROVED AND PENAL PROVISIONS ARE STRICTLY APPLIED IRRESPECTIVE OF THE FACT WHETHER THE CONTRAVENTION WAS MADE BY THE DEFAULTER WITH ANY GUILTY INTENTION OR NOT. FOR THIS PROPOSITION THE AO HAD RELIED ON THE DECISIONS OF HON BLE SUPREME COURT IN UNION OF INDIA AND ORS. VS. DHARMENDRA TEXTILE PROC ESSORS AND OTHERS, 306 ITR 227 (SC) AND SEBI V. SHRIRAM MUTUAL FUND (2006) 5 SCC 361. IT WAS ALSO SUBMITTED THAT THE IMPUGNED ADDITION ON FTS STOOD CONFIRMED UP TO THE STAGE OF TRIBUNAL AND WAS NOT CHALLENGED BEFORE THE HON BLE HIGH COURT BY THE ASSESSEE, HENCE, IMPOSITION OF PENALTY IS LIABLE TO BE SUSTAINED. 6. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT DURING THE RELEVANT ASSESSMENT YEAR, THE ASSESSEE WAS UNDER BONAFIDE BELIEF THAT, AS PER LAW, THE ASSESSEE WAS CORRECTLY FOLLOWING CASH SYSTEM OF ACCOUNTING FOR TAXATION OF FTS AND THEREBY RIGHTLY OFFERING SUCH RECEIPTS FOR ITA NO. 862 TO 865/DEL./2014 7 TAXATION, AS AND WHEN THEY WERE ACTUALLY RECEIVED. IN FACT, THERE WAS NO LOSS OF REVENUE TO THE GOVERNMENT ON ACCOUNT OF SUCH TIMING DIFFERENCE. IN FACT , DUE TO THIS REASON THE ASSESSEE HAS NOT APPEALED FURTHER AGAINST THE ORDER OF TRIBUNAL , UPHOLDING TAXABILITY OF FTS ON ACCRUAL BASIS. IT WAS SUBMITTED THAT ON SUCH DEBATABLE ISSUES, IT CAN HARDLY BE SAID THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICU LARS OF INCOME. FOR THIS, RELIANCE IS PLACED ON THE FOLLOWING DECISIONS : (I). M/S SIEMENS AKTIENGESELLSCHAFT IN ITA NO 124 OF 2010 (II). PIZZA HUT INTERNATIONAL LLC [2012] 54 SOT 425 (DELHI) (III). CSC TECHNOLOGY SINGAPORE PTE. LTD. V. ASST. [2012] DIT 50 SOT 399 (ITAT DELHI) (IV). JOHNSON & JOHNSON V. ASST DIT [2013] 60 SOT 109 (MUMBAI) (V). DCIT V. UHDE GMBH [1996] 54 TTJ 355 (MUMBAI) (VI). NATIONAL ORGANIC CHEMICALS INDUSTRIES [2006] 96 TTJ 765 (MUMBAI) (V). DDIT V SIEMENSAKTIENGESELLSCHAFT: ITA NO.8094 /MUM/2010 (ITAT - MUMBAI) 6.1 IT IS ALSO SUBMITTED THAT NO PENALTY U/S. 271(1)(C) CAN BE LEVIED WHERE THE ASSESSEE HAS GIVEN FULL DISCLOSURE IN THE RETURN OF INCOME. IN THE COMPUTATION OF INCOME FILED WITH THE RETURN OF INCOME IT WAS CLEARLY DISCLOSED THA T THE ASSESSEE IS MAINTAINING ITS BOOKS OF ACCOUNTS ON CASH BASIS. THEREFORE, THERE ARE NO SUNDRY DEBTORS AND SUNDRY CREDITORS AS ON MARCH 31, 2000 . THE ASSESSEE HAS MADE COMPLETE DISCLOSURE AND NOTHING HAS BEEN CONCEALED. IT WAS SUBMITTED THAT IT IS ANO THER MATTER THAT THE ITAT HELD THAT THE FTS SHOULD ITA NO. 862 TO 865/DEL./2014 8 HAVE BEEN TAXED ON ACCRUAL BASIS , BUT THE ASSESSEE HAD DISCLOSED THE TRUE STATE OF AFFAIRS BEFORE THE AO. THE ISSUE WHETHER FTS SHOULD BE TAXED ON ACCRUAL BASIS OR ON CASH BASIS WAS A DEBATABLE ISSUE AND W HERE TWO VIEWS IN RESPECT OF A CLAIM ARE POSSIBLE, NO PENALTY UNDER SECTION 271(1)(C) IS WARRANTED. RELIANCE IN THIS REGARD IS PLACED ON THE FOLLOWING DECISIONS : (I). CIT VS. LIQUID INVESTMENT AND TRADING CO. [IT APPEAL NO. 240 OF 2009, JUDGEMENT DATED 5 - 10 - 2010], (II). RUPAM MERCONTILE LTD. V. DY. CIT [2004] 91 ITD 237 (AHD.) (TM) (III). NAYAN BUILDERS & DEVELOPERS (P.) LTD. V. ITO [IT APPEAL NO. 2379/MUM/2009, ORDER DATED 18 - 3 - 2011, ITAT - MUMBAI]; (IV). YUGAL KISHORE JAJOO V. DY. CIT [IT APPEAL NO. 272/L ND./2011, ORDER DATED 12 2 - 2013, ITAT INDORE]; (V). SMT. RAMILABEN RATILAL SHAH V. ASSTT. CIT [1998] 60 TTJ 171 (AHD). (VI). ADVAITA ESTATE DEVELOPMENT (P.) LTD. V ITO [2013] 40 TAXMANN.COM 142 (MUMBAI - TRIB.) 6.2 IT WAS ALSO SUBMITTED THAT THE ASSESSEE HAD MAINTAINED ALL THE DETAILS OF RECEIPTS AND THE INCOME IN RESPECT OF FEE FROM TECHNICAL SERVICES WAS TAXABLE ON GROSS BASIS AND SUCH RECEIPTS THAT ACCRUED TO THE ASSESSEE IN ONE YEAR WERE OFFERED TO TAX IN THE SUBSEQUENT YEAR S IN WHICH THE AMOUNT WAS AC TUALLY RECEIVED. THEREFORE, THERE HAS BEEN NO LOSS TO THE REVENUE. THE ADDITIONS WERE MADE ONLY ON ACCOUNT OF DIFFERENCE IN METHOD OF ACCOUNTING ADOPTED WITH RESPECT TO TAX ON THE FTS. THE LD. AR HAS RELIED ON FOLLOWING DECISIONS FOR THE PROPOSITION THAT WHERE THERE IS NO LOSS OF REVENUE BUT ONLY ISSUE IS YEAR OF TAXABILITY, NO PENALTY CAN BE IMPOSED : ITA NO. 862 TO 865/DEL./2014 9 I). CIT VS. NAGRI MILLS CO. LTD. (1958) 33 ITR 681 (BOM). (II). CIT V TRIVENI ENGINEERING & INDUSTRIES LTD. (2011) 336 ITR 374, (II(I). CIT V SHRIRAM PISTONS & RINGS LTD., JUDGEMENT DATED 5.5.2008 IN APPEAL NUMBER: ITR 133 / 1991 (IV). CIT V VISHNU INDUSTRIAL GASES P. LTD.: JUDGEMENT DATE 06/05/2008 IN APPEAL NUMBER: ITR NO. 229/1988 (V). IN THE CASE OF CIT V. EXCEL INDUSTRIES LTD. [2013] 358 ITR 295 (SC) 6.3 IT WAS ALSO SUBMITTED THAT MERE MAKING M ERE MAKING AN INCORRECT CLAIM IN THE RETURN CANNOT BE SAID TO HAVE FURNISHED INACCURATE PARTICULARS WHERE ASSES S EE HAD FURNISHED COMPLETE DETAILS IN RESPECT OF THE CLAIM MADE. RELIANCE IN THIS REGARD IS PLACED ON FOLLOWING DECISIONS : (I). CIT V. RELIANCE PETRO PRODUCT (P.) LTD. [2010] 322 ITR 158 (SC) (II). SHERVANJ .HOSPITALITIES LTD. V. CIT [2013] 261 CTR 449 (DELHI) . (III). CIT V. DHARAMPAL PREMCHAND LTD. [2011] 329 ITR 572 (DELHI) (IV). C IT V. SOCIETEX [2013] 212 TAXMAN 73 (DELHI) (MAG.) (V). KARAN RAGHAV EXPORTS (P.) LTD. V. CIT [2012] 349 ITR 112 (DELHI) (MAG.) 6.4 THE LD. AR FURTHER SUBMITTED THAT IT IS WELL ESTABLISHED PRINCIPLE OF LAW THAT PENALTY PROCEEDINGS ARE SEPARATE AND INDEPENDENT FROM ASSESSMENT PROCEEDINGS, AND THE CONSIDERATION IN PENALTY PROCEEDINGS ARE DISTINCT FROM THE MERITS UNDER QUANTUM PROCEEDINGS. IT IS SUBMITTED THAT IT HAS BEEN HELD THAT PENALTY CANNOT BE AN AUTOMATIC CONSEQUENCE OF THE ADDITIONS IN THE QUAN TUM PROCEEDINGS. RELIANCE FOR THIS PROPOSITION IS PLACED ON THE FOLLOWING DECISIONS: (I). T. ASHOK PAI V. CIT [2007] 292 ITR 11 (SC) (II). CIT V. J.K. SYNTHETICS LTD. [1996] 219 ITR 267 (DELHI) ITA NO. 862 TO 865/DEL./2014 10 (III). SHERVANI HOSPITALITIES LTD. V. CIT [2013] 261 CTR 449 (DELHI) (IV). CIT V. ARETIC INVESTMENT (P.) LTD. [2010] 190 TAXMAN 157 (DELHI) 6.5 HE ALSO SUBMITTED THAT THE DELHI HIGH COURT HAS HELD, IN THE CASE OF CIT VS GLOBE SALES CORPORATION [2005] 1 96 CTR 187 (DEL), THAT MERELY BECAUSE CERTAIN ADDITIONS/ ADJUSTMENTS ARE MADE IN THE ASSESSMENT, IT DOES NOT NECESSARILY FOLLOW THAT PENALTY IS TO BE LEVIED. SIMILARLY, IN DEVSONS PVT. LTD . VS CIT [2010] 329 ITR 483 (DEL), THE DELHI HIGH COURT HAS HELD THA T MERELY BECAUSE TAX DEPARTMENT DOES NOT CONCUR WITH THE LEGAL STAND ADOPTED BY THE ASSESSEE, IT WILL NOT BE ENOUGH REASON TO HOLD THAT ASSESSEE IS GUILTY OF CONCEALMENT OF INCOME OR OF FURNISHING INACCURATE DETAILS . IN VIEW OF THESE ARGUMENTS, THE LD. AR URGED FOR DISMISSAL OF REVENUE S APPEALS. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ENTIRE MATERIAL ON RECORD AND WE FIND NO JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). IT IS NOTABLE THAT THE ISSUE IN RESPECT OF ADDITIONS MADE ON ACCOUNT OF ATTRIBUTION OF BUSINESS PROFITS TO ASSESSEE S ALLEGED PE IN INDIA HAS BEEN RESTORED BACK TO THE FILE OF AO. THEREFORE, THE LD. CIT(A) HAS RIGHTLY OBSERVED THAT THE LD. AO SHOULD HAVE HIMSELF MODIFIED THE PENALTY ORDER BY DEL ETING THE AMOUNT OF PENALTY IMPOSED UPON THE ASSESSEE IN RESPECT OF SUCH ADDITIONS WHICH HAVE BEEN SENT BACK TO THE AO FOR FRESH ADJUDICATION, AS PER PROVISIONS OF SECTION 275(1A) OF THE ACT . MOREOVER, THE PENALTY DELETED BY LD. ITA NO. 862 TO 865/DEL./2014 11 CIT(A) ON THIS COUNT HAS NO T BEEN CHALLENGED BY THE REVENUE IN ANY OF THE GROUNDS OF APPEAL BEFORE US. WE, THEREFORE, NEED NOT TO ADDRESS MUCH ON THIS PART OF PENALTY DELETED BY THE LD. CIT(A). 8. AS REGARDS THE DELETION OF PENALTY WITH RESPECT TO ADDITION ON ACCOUNT OF FTS, WE FUR THER DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A). IT IS BORNE OUT ON RECORD THAT THE ASSESSEE HAD MADE TRUE AND COMPLETE DISCLOSURE IN ITS RETURN OF INCOME THAT IT WAS FOLLOWING CASH SYSTEM OF ACCOUNTING WITH RESPECT TO FTS. FURTH ER THERE WAS NO CONCEALMENT OF INCOME. THE PENALTY IS IMPOSED KEEPING IN VIEW THE TAX SOUGHT TO BE EVADED. IN THE INSTANT CASE THE ASSESSEE HAD DULY OFFERED THE INCOME PERTAINING TO THE INVOICES RAISED BY IT DURING THE YEAR IN SUBSEQUENT YEARS AS AND WHEN THE FEE WAS RECEIVED BY ASSESSEE FROM M/S. ONGC AND HENCE, THERE WAS NO LOSS TO THE REVENUE OR EVASION OF TAX. THE ISSUE WHETHER INCOME FROM FTS IS TAXABLE ON ACCRUAL BASIS OR CASH BASIS IS A DEBATABLE ISSUE AND THEREFORE, WHERE TWO VIEWS ARE POSSIBLE, PEN ALTY IS NOT LEVIABLE IF THE ASSESSEE HAS ADOPTED ONE OF THE TWO POSSIBLE VIEWS. IN THIS CONTEXT, THE RELIANCE PLACED BY ASSESSEE IN CATENA OF DECISIONS GOES TO SUPPORT THE CASE OF THE ASSESSEE. IT IS NOTABLE THAT EVERY ADDITION/ADJUSTMENT DOES NOT ENTAIL P ENALTY U/S. 271(1)(C) OF THE ACT UNLESS IT IS PROVED THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR HAS ITA NO. 862 TO 865/DEL./2014 12 FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. HON BLE JURISDICTIONAL HIGH COURT HAS HELD, IN THE CASE OF CIT VS GLOBE SALES CORPORATIO N [2005] 196 CTR 187 (DEL), THAT MERELY BECAUSE CERTAIN ADDITIONS/ ADJUSTMENTS ARE MADE IN THE ASSESSMENT, IT DOES NOT NECESSARILY FOLLOW THAT PENALTY IS TO BE LEVIED. IN THE INSTANT CASE, THERE IS NO AN IOTA OF EVIDENCE TO PROVE THAT THE ASSESSEE HAS CONC EALED OR FURNISHED INACCURATE PARTICULARS OF INCOME ON FTS. HOWEVER, THE DISPUTE WAS WITH RESPECT TO METHOD OF ACCOUNTING ADOPTED BY THE ASSESSEE AND THAT APPLIED BY THE DEPARTMENT. HON BLE DELHI HIGH COURT IN DEVSONS PVT. LTD VS CIT [ SUPRA] HELD THAT MERE LY BECAUSE TAX DEPARTMENT DOES NOT CONCUR WITH THE STAND ADOPTED BY THE ASSESSEE, IT WILL NOT BE ENOUGH REASON TO HOLD THAT ASSESSEE IS GUILTY OF CONCEALMENT OF INCOME OR OF FURNISHING INACCURATE DETAILS . EVEN IF THE CLAIM OF THE ASSESSEE WAS FOUND WRONG U PTO THE STAGE OF TRIBUNAL, SUCH INCORRECT CLAIM IN THE RETURN, IN THE PECULIAR FACTS OF THE PRESENT CASE, CANNOT BE SAID TO PROVE FURNISHING OF INACCURATE PARTICULARS OF INCOME WHERE THE ASSESSEE HAD FURNISHED COMPLETE DETAILS IN RESPECT OF THE CLAIM SO MA DE IN THE RETURN OF INCOME ITSELF. FOR THIS, WE STAND FORTIFIED BY THE DECISION OF HON BLE APEX COURT IN CIT VS. RELIANCE PETROPRODUCT (P) LTD., 322 ITR 158 (SC) AND SEVERAL OTHER DECISIONS OF HON BLE JURISDICTIONAL HIGH COURT RELIED UPON BY THE ASSESSEE. THEREFORE, FOR WANT OF ANY CONTRARY MATERIAL BROUGHT ON RECORD, WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) IN ITA NO. 862 TO 865/DEL./2014 13 DELETING THE PENALTY IMPOSED AGAINST THE ASSESSEE. ACCORDINGLY, ALL THE FOUR APPEALS OF THE REVENUE, HAVING IDENTICAL FACT S AND COMMON GROUNDS OF APPEAL, DESERVE TO BE DISMISSED. 9. IN THE RESULT ALL THE FOUR APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 .08.2016 . SD/ - SD/ - ( I.C. SUDHIR ) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 24 .08.2016 *AKS/ - COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT. R EGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI