BENNETT COLEMAN & CO. LTD, MUMBAI V. ACIT 1(1), MUMBAI

ITA 9081/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1738 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 1997-1998
• Appeal Filed On: 28-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S VENKATRAMA N
• Keywords: Depreciation; Wrong claim; Bad and doubtful debts; Revised return; Revenue expenditure; Capital expenditure
• Section: 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , ! '# $ $ $ $ '% &', ( '# ') BEFORE SHRI DINESH KUMAR AGARWAL, JM AND SHRI SANJAY ARORA, AM './ I.T.A. NO. 9081/MUM/2010 ( ! , -, ! , -, ! , -, ! , -, / / / / ASSESSMENT YEAR : 1997-98) M/S BENNETT, COLEMAN & CO. LTD., THE TIMES OF INDIA BUILDING, DR. D.N. ROAD, FORT, MUMBAI 400 001. / VS. ASSTT. COMMISSIONER OF INCOME-TAX- RANGE 1(1), ROOM NO. 579, AAYAKAR BHAVAN, M.K. MARG, MUMBAI - 400020. #. ( './ PAN : AAACB4373Q ( ./ / // / APPELLANT ) .. ( 01./ / RESPONDENT ) ./ 2 3 ' / APPELLANT BY : SHRI S. VENKATRAMAN 01./ 2 3 ' / RESPONDENT BY : SHRI MOHIT JAIN ' 2 4( / // / DATE OF HEARING : 04-02-2013 5&- 2 4( / DATE OF PRONOUNCEMENT : 15-02-2013 / O R D E R PER DINESH KUMAR AGARWAL, JM. : THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER DTD. 2-9-2010 PASSED BY THE LD. CIT(A)- 1, MUMBAI FOR TH E ASSESSMENT YEAR 1997- 98. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE COMPANY IS ENGAGED IN THE BUSINESS OF PRINTING & PUBLISHING OF NEWSPAPERS AND PERIODICALS , GUARANTEEING, MONEY LENDING, EXPORTS, TELECASTING & BROADCASTING ON TV AND ITA NO.9081/MUM/2010 2 RADIO. IT FILED THE RETURN DECLARING TOTAL INCOME OF RS. 1 58,12,88,918.00. THE A.O. AFTER PROCESSING THE RETURN U/S 143 (1) OF THE INCOME TAX ACT, 1961 (THE ACT), SELECTED THE CASE FOR SCRUTINY AND ACCORDINGL Y ISSUED STATUTORY NOTICES U/S 143(2) AND 142(1) OF THE ACT. THE ASSESSEE HAS ALSO FILED REVISED RETURN OF INCOME AT TOTAL INCOME OF RS. 158,01,27,570.00 HOW EVER, THE ASSESSMENT AFTER MAKING CERTAIN ADDITIONS AND DISALLOWANCES IN CLUDING DISALLOWANCES OF REPAIR EXPENSES RS. 58,92,803.00 WAS COMPLETED AT A N INCOME OF RS. 1,659,031,250.00 VIDE ORDER DTD. 30-3-2000 PASSED U /S 143(3) OF THE ACT. ON APPEAL, THE LD. CIT(A) WHILE RESTRICTED THE SAID DI SALLOWANCE AT RS. 52,33,041.00 PARTLY ALLOWED THE APPEAL. WHILE COMP LETING THE ASSESSMENT, THE A.O. ALSO INITIATED PENALTY PROCEEDING U/S 271(1)(C ) OF THE ACT. ACCORDINGLY, THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY PENALTY U/S 271(1)(C) OF THE ACT SHOULD NOT BE IMPOSED. IN RESPONSE, THE ASSESSEE AF TER REFERRING TO THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT AND CERT AIN DECISIONS SUBMITTED THAT SINCE THE A.O. HAS NOT RECORDED HIS SATISFACTION IN THE ASSESSMENT ORDER BEFORE INITIATING THE PENALTY PROCEEDING, THE PENALTY IS N OT LEVIABLE. ON MERITS, IT WAS, INTER ALIA, SUBMITTED AS UNDER:- OUT OF THE GROUNDS TAKEN UP BY THE ASSESSEE COMPANY IN ITS APPEAL AGAINST THE ORDER OF CIT(A) TO HONBLE ITAT, MUMBAI, ONLY F OLLOWING DISALLOWANCES WHICH WERE NOT PRESSED BY US HAVE BEEN CONFIRMED BY IT VIDE ORDER NO. ITA NO. 3543/MUM/02 : GR. NO. GROUNDS AMOUNT (RS) 3 DISALLOWANCE OF RENT, REPAIRS, RATES, TAXES AND DEPRECIATION RELATING TO GUESTHOUSE U/S 37(4) 25,61,055 9(A) FURNITURE AND FIXTURE REPAIRS 20,00,000 (B) BUILDING REPAIRS 25,60,429 (C) ELECTRICAL REPAIRS 6,72,612 ITA NO.9081/MUM/2010 3 AGAINST GROUND NO.3 THE ASSESSEE COMPANY HAS MADE F ULL AND COMPLETE DISCLOSURE ABOUT THIS CLAIM VIDE NOTE NO. 6 IN NOTE S TO COMPUTATION OF INCOME ATTACHED WITH THE RETURN, WHICH STATES AS UNDER: REPAIRS, RATES AND TAXES AMOUNTING TO RS.53,809/- A ND DEPRECIATION AMOUNTING TO RS.25,07,246/-. I.E A TOTAL OF RS..25, 61,055/- PERTAINING TO GUEST HOUSE AS PER EXHIBIT NO.4 OF TAX AUDIT REPORT ARE NOT GOVERNED BY SECTION 37(4). THEY ARE GOVERNED BY SECTION 30/31/3 2 OF THE INCOME TAX ACT. HENCE THEY ARE NOT CONSIDERED FOR DISALLOWANCE UNDER SECTION 37(4). THE CONTENTION IS PURELY LEGAL AND ON THE RATIO OF BOMBAY HIGH COURT JUDGMENT IN THE CASE OF CHASE BRIGHT STEEL LTD V/S CIT (42 TAXMAN 142) AND CENTURY SPINNING AND MANUFACTURING CO. LTD V/S CIT (189 1TR 660). WE SUBMIT THAT RS.25,61,055/- SHOULD NOT BE D ISALLOWED U/S 37(4). AGAINST GROUND NO.9(A), (B) &(C) THE ASSESSEE COMPA NY HAS MADE FULL AND COMPLETE DISCLOSURE ABOUT THIS CLAIM VIDE NOTE NO. 16 IN NOTES TO COMPUTATION OF INCOME ATTACHED WITH THE RETURN, WHICH STATES AS UNDER: SINCE THE QUESTION WHETHER A REPAIR EXPENDITURE IS REVENUE OR CAPITAL IS A HIGHLY DEBATABLE ONE, THE ADMISSIBILITY AS REVENU E EXPENDITURE OF AMOUNT DEBITED, AS REPAIRS WILL BE DISCUSSED AT THE TIME OF ASSESSMENT. THUS AS CAN BE SEEN FROM THE ABOVE MENTIONED NOTE I N THE COMPUTATION OF INCOME ACCOMPANYING THE RETURN, THAT ASSESSEE HAS V OLUNTARILY MADE FULL DISCLOSURE IN RESPECT OF THE DEDUCTION CLAIMED. AFO RESAID WOULD AMPLY BRING OUT THE FACT THAT AT BEST THESE ARE DISPUTED CLAIMS MAD E WITH FULL DISCLOSURE AND THAT THESE HAVE NOT BEEN DETECTED OR UNEARTHED DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS TO SAY THAT THERE HAS BEEN C ONCEALMENT OR NON DISCLOSURE OF INFORMATION. WE THEREFORE SUBMIT THAT NO PENALTY IS LEVIEBLE IN THE SAID CIRCUMSTANCES. THE RELIANCE WAS ALSO PLACED ON THE FOLLOWING JUDGM ENTS: - CIT V. AJAIB SINGH & CO. [2002] 253 ITR 630 (PUNJ . & HAR.). - CIT V. SKYLINE AUTO PRODUCTS (P.) LTD. [2004] 271 ITR 335 : [2005] 142 TAXMAN 558 (MP). IT WAS, THEREFORE, PRAYED THAT THE PENALTY PROCEEDI NG MAY BE DROPPED. HOWEVER, THE A.O. AFTER APPLYING THE PROVISIONS OF EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT AND CERTAIN DECISIONS HELD THA T THE ASSESSEE HAS FURNISHED IN-ACCURATE PARTICULARS OF INCOME LEADING TO CONCEA LMENT OF INCOME ON THE FOLLOWING ADDITIONS:- ITA NO.9081/MUM/2010 4 ITEM NO . PARTICULARS AMOUNT (RS) 1 DISALLOWANCE OF GUEST HOUSE EXPENSES U/S 37(4) OF THE I.T. ACT, 1961 47,54,758.00 2 ADDITION UNDER INCOME FROM HOUSE PROPERTY 2,62,92 0.00 3 DISALLOWANCE OF BAD DEBTS WRITTEN OFF 1,161,47,54 6.00 4 REPAIR EXPENDITURE DISALLOWED AS CAPITAL EXPENDITURE 52,33,041.00 AND ACCORDINGLY THE A.O. ON THE ABOVE DISALLOWANCES /ADDITIONS, HAS IMPOSED PENALTY OF RS. 1,13,51,253.00 VIDE ORDER DTD. 29-8- 2008 PASSED U/S 271(1)(C) OF THE ACT. ON APPEAL, THE LD. CIT(A) WHILE DELETI NG THE PENALTY IMPOSED BY THE A.O. ON ACCOUNT OF DISALLOWANCE OF GUEST HOUSE EXPE NSES RS. 47,54,758.00, ADDITION UNDER INCOME OF HOUSE PROPERTY RS. 2,62,92 0.00 AND DISALLOWANCE OF BAD DEBTS WRITTEN OFF RS. 1,61,47,546.00, HOWEVER, CONFIRMED THE PENALTY IMPOSED BY THE A.O. IN RESPECT OF DISALLOWANCE OF R EPAIR EXPENSES RS. 52,33,041.00 TREATED AS CAPITAL EXPENDITURE AND ACC ORDINGLY PARTLY ALLOWED THE APPEAL. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING IN ALL THE GROUNDS THE SUSTEN ANCE OF PENALTY ON THE DISALLOWANCE OF REPAIR EXPENDITURE TREATED AS CAPIT AL EXPENDITURE RS. 52,33,041.00. 4. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE, AT THE OUTSET, SUBMITS THAT THE ASSESSEE IN ITS NOTE NO. 16 APPEAR ING AT PAGE 3 OF COMPUTATION OF INCOME ATTACHED WITH THE RETURN OF I NCOME FOR THE A.Y. 1997- 98 HAS MENTIONED AS UNDER:- ITA NO.9081/MUM/2010 5 SINCE THE QUESTION WHETHER A REPAIR EXPENDITURE IS REVENUE OR CAPITAL IS A HIGHLY DEBATABLE ONE, THE ADMISSIBILITY AS REVENUE EXPENDITURE OF AMOUNT DEBITED, AS REPAIRS WILL BE DISCUSSED AT THE TIME O F ASSESSMENT. THE LD. COUNSEL FOR THE ASSESSEE AFTER READING THE OBSERVATIONS AND FINDINGS OF THE A.O. APPEARING IN PARA 11 TO 11.6 OF THE IMPUGN ED ASSESSMENT ORDER AND THE OBSERVATIONS AND FINDINGS OF THE LD. CIT(A) IN PARA 13 TO 13.3 OF THE APPELLATE ORDER IN QUANTUM APPEAL ALLOWING PART REL IEF TO THE ASSESSEE FURTHER SUBMITS THAT THE TRIBUNAL IN THE APPEAL FILED BY TH E ASSESSEE ON THIS ISSUE HAS REJECTED THE GROUND OF THE ASSESSEE FOR THE REASON THAT THE SAME WAS NOT PRESSED BY THE ASSESSEE VIDE PARA 9 OF ITS COMMON O RDER IN ITA NO. 3543/MUM/2002 AND OTHERS FOR A.Y. 1997-98 DTD. 30- 6-2008. HE FURTHER SUBMITS THAT THE TRIBUNAL IN ASSESSEES OWN CASE FO R ASSESSMENT YEARS 1993- 94, 1998-99 AND 1999-2000 HAS DELETED THE SIMILAR P ENALTY ON THE SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE IN VIEW OF THE DISCLOSURE MADE BY THE ASSESSEE IN ITS NOTES FORMING PART OF THE COMPUTATI ON OF INCOME ATTACHED WITH THE RETURN OF INCOME FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN CIT VS. RELIANCE PETROPRODUCTS PVT. LTD. (2010) 322 ITR 158 (SC). HE ALSO PLACED ON RECORD THE COPY OF THE SAID ORDERS OF THE TRIBUNAL. HE, THEREFORE, SUBMITS THAT SINCE THE FACTS AND CIRCUMSTANCES OF T HE CASE ARE SIMILAR, THEREFORE, IN VIEW OF THE TRIBUNAL ORDERS IN ASSESS EES OWN CASE, THE PENALTY IMPOSED BY THE A.O. AND SUSTAINED BY THE LD. CIT(A) BE DELETED. 5. ON THE OTHER HAND, THE LD. D.R. WHILE RELYING ON THE ORDERS OF THE A.O. AND THE LD. CIT(A) SUBMITS THAT THE COST OF PAINTIN GS OF MR. TYEB MEHTA WORTH ITA NO.9081/MUM/2010 6 RS. 20 LACS CANNOT BE SAID, IN ANY WAY, TO BE OF RE VENUE NATURE, THEREFORE, TO THIS EXTENT THE ORDER PASSED BY THE LD. CIT(A) SUST AINING THE PENALTY BE UPHELD. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE WHILE FURNISHING THE RETURN OF INCOME HAS MADE FULL DISCL OSURE ABOUT THE REPAIR EXPENSES VIDE POINT NO. 16 APPEARING AT PAGE 3 OF N OTES FORMING PART OF COMPUTATION OF INCOME ATTACHED WITH THE RETURN OF I NCOME FOR A.Y. 1997-98 WHICH AT THE COST OF REPETITION READS AS UNDER:- SINCE THE QUESTION WHETHER A REPAIR EXPENDITURE IS REVENUE OR CAPITAL IS A HIGHLY DEBATABLE ONE, THE ADMISSIBILITY AS REVENUE EXPENDITURE OF AMOUNT DEBITED, AS REPAIRS WILL BE DISCUSSED AT THE TIME O F ASSESSMENT. HOWEVER, IN THE ASSESSMENT PROCEEDING THE A.O. HAS MADE THE DISALLOWANCE OF BUILDING REPAIR, FURNITURE AND FIXTURE REPAIR AND O THER REPAIR EXPENSES RS. 58,92,803.00 AS CAPITAL EXPENDITURE. ON APPEAL, TH E LD. CIT(A) WHILE PARTLY ALLOWING RELIEF, HOWEVER, REDUCED THE DISALLOWANCE TO 52,33,041.00 AS AGAINST RS. 58,92,803.00 MADE BY THE A.O. SINCE THE ASSESS EE DID NOT PRESS THE ABOVE ISSUE BEFORE THE TRIBUNAL, THE TRIBUNAL DISMISSED T HE SAID GROUND RAISED BY THE ASSESSEE BEING NOT PRESSED. WE FURTHER FIND TH AT ON SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE, THE TRIBUNAL IN ASSESSEE S OWN CASE IN DCIT VS. BENNETT COLEMAN & CO. LTD. IN ITA NO. 1189/MUM/2009 FOR A.Y. 1993-94 DTD. 30-4-2010 WHILE RELYING ON THE ORDER OF THE HONBLE SUPREME COURT IN RELIANCE ITA NO.9081/MUM/2010 7 PETROPRODUCTS PVT. LTD. (SUPRA) HAS DELETED THE PEN ALTY VIDE FINDING RECORDED IN PARA 28 OF THE ORDER AS UNDER:- 28. FROM THE DECISION OF THE HONBLE SUPREME COURT (SUPRA), IT IS CLEAR THAT WHEN THE INFORMATION AND DETAILS GIVEN B Y THE ASSESSEE IS NOT FOUND TO BE INCORRECT OR INACCURATE, THE ASS ESSEE CANNOT BE HELD OF GUILTY OF FURNISHING INACCURATE PARTICULARS AND RESULTING LEVY OF PENALTY. RESPECTFULLY FOLLOWING THE DECISI ON OF THE DECISION OF THE SUPREME COURT (SUPRA), WE FIND THAT, IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, THE PENALTY IS N OT JUSTIFIED. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 7. AGAIN THE TRIBUNAL IN BENNETT, COLEMAN & CO. LTD . VS. ACIT AND VICE VERSA IN ITA NO. 3709 & 4984/MUM/2011 FOR A.Y. 1998 -99 ORDER DTD. 27-7-2012 HAS DELETED THE PENALTY AND HAS HELD AS U NDER (PARA 27):- 27. WE HAVE CAREFULLY CONSIDERED SUBMISSIONS OF LD REPRESENTATIVES OF PARTIES AND ORDERS OF AUTHORITIES BELOW. WE AGREE WITH LD C IT(A) THAT MERE DISALLOWANCE OF CLAIM OF THE ASSESSEE DOES NOT GIVE A BASIS FOR LEVY OF PENALTY U/S.271(1)(C) OF THE ACT . IT IS NOT A CASE OF THE DEPARTMENT THAT A SSESSEE HAS CLAIMED THE SAID EXPENDITURE FOR AVOIDING TAX. THE ASSESSEE PLACED A LL RELEVANT FACTS IN THE RETURN FILED AND MADE ITS CLAIM BONAFIDE AS REVENU E EXPENDITURE. NOTHING IS AVAILABLE ON RECORD TO SHOW THAT THE BELIEF OF THE ASSESSEE AND THE EXPLANATION OF THE ASSESSEE WERE FALSE AND INHERENTLY IMPOSSIBL E. EVEN AN ERRONEOUS CLAIM FOR DEDUCT ION CANNOT WARRANT PENALTY UNLESS AND UN TIL IT IS PROVED THAT THE CLAIM IS MADE WITH DISHONEST INTENTION. THEREFORE, WE AGREE WITH LD A.R. THAT THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISION DT .30.4.2010 OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 1993-94(SUPRA) AS WELL AS THE DECISION OF HONBLE APEX COURT IN THE CASE OF R ELIANCE PETROPRODUCTS PVT LTD. (SUPRA). HENCE, WE UPHOLD THE ORDER OF LD CIT( A) AND REJECT GROUND NO.1 OF THE APPEAL TAKEN BY THE DEPARTMENT . 8. YET AGAIN, THE TRIBUNAL IN BENNETT, COLEMAN & CO . LTD. VS. ACIT AND VICE VERSA IN ITA NO. 3710/4979/MUM/2011 FOR A.Y. 1999-2 000 DTD. 27-7-2012 DELETED THE PENALTY VIDE PARA 22 OF THE ORDER AS UN DER:- 22. WE HAVE CONSIDERED SUBMISSIONS OF LD REPRESENT ATIVES OF PARTIES AND ORDERS OF AUTHORITIES BELOW. WE AGREE WITH LD CIT(A ) THAT MERE DISALLOWANCE OF CLAIM OF THE ASSESSEE DOES NOT GIVE A BASIS FOR LEV Y OF PENALTY U/S.271(1)(C) OF THE ACT. IT IS NOT THE CASE OF THE DEPARTMENT THAT ASSESSEE HAS CLAIMED THE SAID EXPENDITURE ONLY TO AVOID TAX. WE OBSERVE THAT ASSE SSEE PLACED ALL RELEVANT ITA NO.9081/MUM/2010 8 FACTS IN THE RETURN FILED AND MADE ITS CLAIM BONAFI DE AS REVENUE EXPENDITURE. NOTHING IS AVAILABLE ON RECORD TO SHOW THAT BELIEF OF THE ASSESSEE AND THE EXPLANATIONS OF THE ASSESSEE WERE FALSE AND INHEREN TLY IMPOSSIBLE. EVEN AN ERRONEOUS CLAIM FOR DEDUCTION CANNOT WARRANT PENALT Y UNLESS AND UNTIL IT IS PROVED THAT CLAIM IS MADE WITH DISHONEST INTENTION AS OBSERVED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 1993-94 VIDE ORDER DATED 30.4.2010 IN I.T.A. NO.1189/M/2009 AND ALSO BY THE HOBBLE APEX COURT I N THE CASE OF RELIANCE PETROPRODUCTS PVT LTD. (SUPRA). THEREFORE, WE HOLD THAT LD CIT(A) HAS RIGHTLY DELETED THE PENALTY LEVIED BY AO U/S.271(1)(C) OF T HE ACT ON THE SAID AMOUNT OF RS.15,80,169 WHICH WAS CLAIMED BY THE ASSESSEE AS R EVENUE EXPENDITURE BUT HELD IT TO BE A CAPITAL EXPENDITURE. IN THIS REGARD , WE ARE ALSO SUPPORTED BY THE ORDERS OF HONBLE DELHI HIGH COURT IN THE CASE OF A URIC INVESTMENT AND SECURITIES LTD AND BHARTESH JAIN (SUPRA) THAT MERE CHANGE OF HEAD OF INCOME DOES NOT WARRANT LEVY OF PENALTY U/S.271(1)(C) OF T HE ACT AS DISCUSSED HEREINABOVE IN PARA 17. HENCE, WE UPHOLD THE ORDER OF LD CIT(A) BY REJECTING GROUND OF APPEAL TAKEN BY DEPARTMENT. 9. AS REGARDS THE PLEA RAISED BY THE LD. D.R. THAT THE PAINTINGS OF MR. MEHTA WORTH RS. 20 LACS CANNOT BE SAID IN ANY WAY TO BE O F REVENUE NATURE, WE ARE OF THE VIEW THAT THERE IS NO DISPUTE THAT THE ASSESSEE HAS DISCLOSED ALL THE MATERIAL FACTS IN ITS RETURN ALONG WITH NOTE FORMIN G PART OF COMPUTATION OF INCOME (SUPRA). IT IS NOT THE CASE OF THE REVENUE THAT THE SAID DISCLOSURE MADE BY THE ASSESSEE DOES NOT INCLUDE THE AMOUNT OF RS. 20 LACS OF PURCHASE OF PAINTINGS OR THE DISCLOSURE MADE BY THE ASSESSEE WA S FOUND TO BE FALSE OR UNTRUE OR INCOMPLETE. THE CLAIM MADE BY THE ASSESS EE MAY HAVE BEEN REJECTED BUT IT CANNOT BE SAID THAT THE SAME WAS NOT PLAUSIB LE OR LEGALLY TENABLE. THE BONAFIDE OF THE CLAIM HAS NOT BEEN DOUBTED BY THE R EVENUE AUTHORITIES AT ANY STAGE. 10. THE QUESTION WHETHER PENALTY SHOULD BE IMPOSED UNDER SECTION 271(1)(C) WHEN A DEBATABLE AND ARGUABLE LEGAL ISSUE IS DECIDE D AGAINST THE ASSESSEE AND THE ASSESSEE HAD DISCLOSED FULL AND CORRECT FACTS I S NO LONGER RES INTEGRA . THE ITA NO.9081/MUM/2010 9 COURTS IN SEVERAL JUDGMENTS HAVE DRAWN A DISTINCTIO N BETWEEN A FALSE CLAIM, WHICH CANNOT BE COUNTENANCED AND CLAIMS, WHICH ARE MADE ON THE BASIS OF LEGAL PROVISIONS WHICH ARE DEBATABLE AND QUITE PLAU SIBLE. 11. THE HONBLE APEX COURT IN CIT VS. RELIANCE PETR OPRODUCTS PVT. LTD. (2010) 322 ITR 158 (SC) AFTER CONSIDERING VARIOUS D ECISIONS INCLUDING DILIP N. SHROFF VS. JCIT (2007) 291 ITR 519(SC) AND UNION OF INDIA VS. DHARAMENDRA TEXTILE PROCESSORS (2008) 306 ITR 277(SC) HAS OBSER VED AND HELD (PAGE 158 HEAD NOTES) AS UNDER: A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME- TAX ACT, 1961, SUGGESTS THAT IN ORDER TO BE COVERED BY IT, T HERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICU LARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTI ON 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INF ORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS IN ORDER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY CO VERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRE TCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISH ING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHIN G WOULD DEPEND UPON THE RETURN FILED Y THE ASSESSEE, BECAUSE THAT IS TH E ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INC OME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABIL ITY COULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FA LSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271( 1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITS ELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INC OME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FU RNISHING INACCURATE PARTICULARS. 12. THE HONBLE DELHI HIGH COURT IN THE CASE OF DEV SONS (P). LTD. V. CIT [2010] 329 ITR 483 HAS HELD THAT WHEN A LEGAL ISSUE ARISES FOR CONSIDE RATION, ITA NO.9081/MUM/2010 10 WHICH IS DEBATABLE BUT THE CLAIM MADE BY THE ASSESS EE IS NOT ACCEPTED, THERE IS NO JUSTIFICATION TO INVOKE THE PENALTY PROVISION S UNDER SECTION 271(1)(C). DIVERGENT LEGAL VIEWS ON LEGAL INTERPRETATION OF A STATUTE CAN TAKE PLACE, BUT IT IS NOT NECESSARY THAT THERE SHOULD BE UNIFORMITY OR CONSENSUS OF OPINION ON THE ASPECTS OF LAW. ASSESSEE CANNOT BE FAULTED AND PENALTY SHOULD NOT BE IMPOSED BECAUSE THE ASSESSEE HAD TAKEN A PARTICULAR STAND POINT, UNLESS THERE ARE GROUNDS OR REASONS TO SHOW THAT THE ASSESSEE HA D NOT DISCLOSED ALL THE FACTS BEFORE THE DEPARTMENTAL AUTHORITIES CONCERNED . 13. RECENTLY THE HONBLE DELHI HIGH COURT IN KARAN RAGHAV EXPORT S P. LTD. VS. CIT (2012) 349 ITR 112 (DELHI) AFTER CONSIDERI NG VARIOUS DECISIONS INCLUDING THE DECISION IN CIT VS. ZOOM COMMUNICATIO N P. LTD. (2010) 327 ITR 510 (DELHI) HAS HELD AS UNDER:- HELD, ALLOWING THE APPEAL, THAT THE CLAIM MADE BY THE ASSESSEE MIGHT HAVE BEEN REJECTED, BUT IT COULD NOT BE SAID THAT THE CL AIM WAS NOT PLAUSIBLE OR LEGALLY TENABLE. THERE WAS NO ALLEGATION THAT THE Q UANTUM OF DEPRECIATION WAS INCORRECTLY COMPUTED. PENALTY COULD NOT BE IMPOSED . 14. IN THE ABSENCE OF ANY OTHER CONTRARY MATERIAL O R DISTINGUISHING FEATURE BROUGHT ON RECORD BY THE REVENUE TO SHOW THAT THE C LAIM OF DEDUCTION MADE BY THE ASSESSEE WAS NOT BONAFIDE OR BOGUS, WE RESPECTF ULLY FOLLOWING THE RATIO OF THE ABOVE DECISIONS AND THE CONSISTENT VIEW HOLD TH AT THERE IS NO CONCEALMENT ON THE PART OF THE ASSESSEE WHICH MAY CALL FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT AND ACCORDINGLY THE PENALTY IMPOSED BY THE A.O. AND SUSTAINED BY THE LD. CIT(A) IS DELETED. THE GROUNDS TAKEN BY THE AS SESSEE ARE, THEREFORE, ALLOWED. ITA NO.9081/MUM/2010 11 15. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. 6 47 ! ,64 2 #4 8 2 %4 9: ORDER PRONOUNCED IN THE OPEN COURT ON 15-02-2013. . 2 5&- ( 7 15-02-2013 & 2 A SD/- SD/- (SANJAY ARORA) (DINE SH KUMAR AGARWAL) ( '# / ACCOUNTANT MEMBER ! '# / JUDICIAL MEMBER MUMBAI; DATED 15-02-2013 .!.'./ R.K. , SR. PS 2 0!4BC C-4 2 0!4BC C-4 2 0!4BC C-4 2 0!4BC C-4/ COPY OF THE ORDER FORWARDED TO : 1. ./ / THE APPELLANT 2. 01./ / THE RESPONDENT . 3. D () / THE CIT(A)- 8, MUMBAI 4. D / CIT - 4, MUMBAI 5. CGA 0!4! , , / DR, ITAT, MUMBAI B BENCH 6. AH, I / GUARD FILE. '1C4 0!4 // TRUE COPY // ' ' ' ' / BY ORDER, J JJ J/ // /'9 % '9 % '9 % '9 % (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI