Hewitt Associates (India) Pvt. Ltd.., Gurgaon V. DCIT, New Delhi

ITA 989/DEL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6954 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 12-04-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 18-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Assessee Lawyers: ABHIJIT ROY
• Keywords: Depreciation; Additional evidence; Bad and doubtful debts; Difference of opinion; Onus to prove; Revised return; Provision of bad debts; Bonafide mistake
• Section: 143(3)

Judgement Text

1 ITA NO. 98 9/DEL/2013 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER & SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.-989/DEL/2013 ( ASSESSMENT YEAR: 2003-04) HEWITT ASSOCIATES (INDIA) PVT. LTD. HEWITT TOWER, SECTOR-42, DLF CITY, PHASE-V, GURGAON. AABCH1599D VS DCIT CIRCLE 12(1), ROOM NO. 398, C.R. BUILDING, I.P. ESTATE, NEW DELHI. ASSESSEE BY SH. ABHIJIT ROY, FCA REVENUE BY SH. T.VASANTHAN, SR. DR ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER : THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 17-12-2012 PASSED BY THE LD . CIT (APPEALS) X, MEERUT FOR AY 2003-04 WHEREIN, THE LD . FIRST APPELLATE AUTHORITY HAS PARTLY ALLOWED THE ASSESSEE S APPEAL DATE OF HEARING 12.04.2016 DATE OF PRONOUNCEMENT 08.07.2016 2 ITA NO. 98 9/DEL/2013 AND HAS UPHELD THE IMPOSITION OF PENALTY U/S 271(1) (C ) OF THE INCOME TAX ACT, 1961 (THE ACT) TO THE TUNE OF RS. 1,80,45,826/-. 2. ON GOING THROUGH THE PENALTY ORDER IT IS SEEN TH AT THE PENALTY HAS BEEN IMPOSED ON THREE ADDITIONS AS UNDE R: (I) THE A.O. HAS OBSERVED THAT DURING THE YEAR THE ASS ESSEE COMPANY HAD WRITTEN OFF SUNDRY BALANCE OF RS.274.16 LAKHS AND HAD ALSO PROVIDED FOR PROVISION OF BAD DEBTS OF RS. 106.09 LAKHS. THE ASSESSEE HAD ALSO SHOWN LOSS ON SALE OF F IXED ASSETS OF RS. 10.40 LAKHS, BUT IN THE COMPUTATION O F THE TAXABLE INCOME, THESE AMOUNTS WERE NOT ADDED BACK B Y THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDIN GS, THE ASSESSEE APPLIED FOR RECTIFICATION BY FILING A LETT ER DATED 06-12- 2005. THE A.O. HELD THAT THIS ATTEMPT BY THE ASSES SEE COMPANY TO RECTIFY THE MISTAKE WAS NOT ACCEPTABLE AS THE PRESCRIBED CONDITIONS FOR REVISING THE RETURN OF IN COME WERE NOT COMPLIED BY THE ASSESSEE AND THE AMOUNT OF RS. 116.49 LAKHS WAS ADDED TO THE INCOME OF THE ASSESSEE. SUBS EQUENTLY PENALTY U/S 271(1)(C) OF THE ACT WAS IMPOSED ON THIS ADDITION. 3 ITA NO. 98 9/DEL/2013 (II) THE A.O. HAS FURTHER POINTED OUT THAT THE ASSESSEE ITSELF HAS ACCEPTED THAT THERE WAS NO EVIDENCE OR GROUNDS T O SUBSTANTIATE THE DEBTORS WRITTEN OFF AMOUNTING TO RS .63.96 LAKHS (OUT OF A TOTAL OF RS.274.16 LAKHS) AND CLAIM ED AS BAD DEBTS. THE A.O. HELD THAT IN VIEW OF THE BOARD'S CI RCULAR AND VARIOUS JUDICIAL PRONOUNCEMENTS, AN AMOUNT OF RS.63 .96 LAKHS HAD BEEN DISALLOWED U/S 143(3) OF THE ACT AND SUBSEQUENTLY PENALTY U/S 271(1)(C) OF THE ACT WAS IM POSED ON THIS ADDITION. (III) THE A.O. FURTHER POINTED OUT THAT AN AMOUNT OF RS.23,22,957/- WAS BOOKED UNDER THE HEAD LEGAL AND PROFESSIONAL EXPENSES FOR PURCHASE AND UP-GRADATION OF SOFTWARE, THESE AMOUNTS WERE ACTUALLY CAPITAL IN NAT URE AND ACCORDINGLY, THE AMOUNT OF RS.17,42,218/- WAS DISALL OWED AS A REVENUE EXPENSE WHILE DEPRECIATION @25% WAS ALLOWED . SUBSEQUENTLY PENALTY U/S 271(1) (C) OF THE ACT WAS I MPOSED ON THIS ADDITION. 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE FIRST APPELLATE AUTHORITY. WITH REGARD TO THE ADDITION OF RS.116.49 4 ITA NO. 98 9/DEL/2013 LAKHS, THE ASSESSEE HAD STATED BEFORE THE LD. CIT ( A) THAT IT WAS A BONAFIDE MISTAKE WHICH COULD BE RECTIFIED AND ACCORDINGLY, THE PENALTY WAS NOT IMPOSABLE. HOWEVER , THE LD. CIT(A) WAS OF THE OPINION THAT THE ONUS OF ESTABLISH ING THAT THERE WAS A BONAFIDE MISTAKEN WAS ON THE ASSESSEE AND THAT KEEPING IN VIEW THE DECISIONS OF CIT VS. ZOOM COMMUNICATIONS P. LTD. 191 TAXMAN 179 (DEL) AND CIT VS. ESCORTS FINANCE LTD 328 ITR 44 (DEL), IT WAS CLEAR T HAT IN THIS CASE THE ASSESSEE HAD NOT PROVIDED TRUE AND COMPLE TE PARTICULARS OF INCOME AND THAT IT WAS ONLY AFTER TH E CASE BEING EXAMINED UNDER SCRUTINY THAT THE ASSESSEE MADE AN APPLICATION FOR RECTIFICATION AND CAME FORWARD WITH T HE SUBMISSION THAT THIS AMOUNT HAD ESCAPED THE COMPUTA TION OF INCOME. ACCORDINGLY, THE IMPOSITION OF PENALTY ON A MOUNT OF RS.1,16,49,826/- WAS CONFIRMED. WITH REGARD TO PENAL TY ON ADDITION OF RS.63.96 LAKHS, THE LD. CIT (A) OPINED THAT EVEN AT THE TIME OF ASSESSMENT THE ASSESSEE HAD NOT BEEN IN A POSITION TO PROVIDE DOCUMENTS AND DETAILS OF THE BA D DEBTS CLAIMED TO HAVE BEEN WRITTEN OFF DURING THE YEAR. TH E LD. CIT (A) FURTHER OPINED THAT EVEN THOUGH THE ASSESSEE HA D RELIED 5 ITA NO. 98 9/DEL/2013 UPON THE FACT THAT IN SOME YEARS THE AMOUNT HAD BEE N ALLOWED BY THE CIT (A)/ITAT, THE DETAILS OF THE BAD DEBTS W ERE NOT AVAILABLE AND THE SAME WERE NOT PROVIDED TO THE ASS ESSING OFFICER FOR THE YEAR UNDER APPEAL AND THAT THE AMOU NT HAD BEEN DISALLOWED AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. THE LD. CIT (A) ALSO NOTED THAT THE ITAT HAD HELD I N THE ASSESSEES OWN CASE THAT SUCH DEBTS WERE NOT ALLOWABL E CONSIDERING THE FACT THAT THE NATURE OF DEBTS WAS NO T CLEAR AS TO THEY BEING CAPITAL DEBTS OR TRADING DEBTS. ACCO RDINGLY, THE IMPOSITION OF PENALTY ON THIS ADDITION WAS ALSO CONF IRMED. ON THE THIRD ADDITION ON WHICH THE PENALTY WAS IMPOSED WA S OF RS. 17,42,218/- AND THIS DISALLOWANCE HAD BEEN MADE BY THE ASSESSING OFFICER BY TREATING THE SOFTWARE EXPENSES AS CAPITAL IN NATURE. ON THIS ISSUE THE LD. CIT (A) OPINED THA T THE ISSUE OF DISALLOWING SOFTWARE EXPENSES AS BEING CAPITAL IN NATURE WAS A MATTER ATTRACTING DIFFERENT LEGAL OPINIONS. AC CORDINGLY, UNDER THE CIRCUMSTANCES THE BENEFIT OF DOUBT HAD TO BE GIVEN TO THE ASSESSEE WITH REGARD TO THIS DISALLOWANCE AND THAT IT COULD NOT BE HELD THAT THE ASSESSEE HAD DELIBERATEL Y AND WILLFULLY EVADED TAX AND THAT SINCE DIFFERENT VIEWS W ERE 6 ITA NO. 98 9/DEL/2013 POSSIBLE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN IMPOSING THE PENALTY AND ACCORDINGLY, THE PENALTY WAS DIRECT ED TO BE DELETED ON THIS PARTICULAR ADDITION. 4. AGGRIEVED, THE ASSESSEE IS NOW IN APPEAL BEFORE T HE TRIBUNAL AND HAS RAISED THE FOLLOWING GROUNDS OF APPEAL 1. THE LEARNED CIT(A) ERRED IN IGNORING THE VOLUNTARY REVISION OF THE COMPUTATION BY THE APPELL ANT, AND UPHOLDING THE LEVY OF PENALTY ON TWO ITEMS OF BONA FIDE MISTAKE OF OVERSIGHT IN EARLIER INADVERTE NTLY NOT ADDING BACK IN THE COMPUTATION OF INCOME PROVISION FOR DOUBTFUL DEBTS:RS.1,06,09,212/- AND PROFIT ON SALE OF FIXED ASSETS:RS.10,40,614/-'. 2. THE LEARNED CIT(A) ALSO ERRED IN CONFIRMING THE LEVY OF PENALTY ON THE DISALLOWANCE OF RS.63.96 LAK HS MADE IN SUNDRY BALANCES WRITTEN OFF, FAILING TO APPRECIATE THAT THERE WAS NO UNANIMITY OF OPINION WITHIN THE DEPARTMENT ITSELF FROM ONE ASSESSMENT YE AR TO ANOTHER REGARDING THE ALLOWABILITY OF THE BALAN CES WRITTEN OFF, AND THAT, ON IDENTICAL FACTS, ITS ALL OWANCE HAD BEEN UPHELD BY THE LEARNED CIT(A), HONBLE ITAT AND THE HONBLE DELHI HIGH COURT IN THE IMMEDIATELY PRECEDING A.Y 2002-03. 7 ITA NO. 98 9/DEL/2013 3. THE APPELLANT BEGS LEAVE TO ADD, AMEND, MODIFY OR CHANGE ITS GROUNDS OF APPEAL BEFORE THE FINAL HEARING. 5. THE LD. AR SUBMITTED THAT THE DISPUTED PENALTY O N THE FIRST ISSUE RELATES TO THE OMISSION IN ADDING BACK THE BY PROVISION FOR BAD DEBTS AND LOSS ON SALE OF FIXED A SSETS. IT IS A ROUTINE ADDITION THAT OUGHT TO HAVE BEEN MADE THE PROFESSIONALS ENTRUSTED WITH THE WORK OF PREPARING THE COMPUTATION OF INCOME. THE MISTAKE WAS SOUGHT TO BE SUO MOTO RECTIFIED IN NOV 2005 ITSELF, EVEN WHEN THE ASSESSMENT PROCEEDINGS WERE AT A VERY PRELIMINARY STAGE, THE ASST. ORDER HAVING BEEN PASSED ON 29.3.06. IT WAS A BONA FIDE MISTAKE OF OVERSIGHT, NOT WARRANTING THE LEVY OF PENALTY U/ S 271(1) (C). AS RECENTLY HELD BY THE HONBLE APEX COURT IN PRICE WATERHOUSE COOPERS (P) LTD. V CIT (2012) 25 TAXMANN.COM 400 (SC), THAT IT WOULD BE UNJUSTIFIED TO LEVY PENALTY FOR FILING INACCURATE PARTICULARS ON SUCH AN APPARENT & BONA FIDE 8 ITA NO. 98 9/DEL/2013 COMPUTATION ERROR OF THIS NATURE, OF NOT ADDING BACK PROVISION FOR GRATUITY IN THE CASE OF THE RETURN OF A REPUTED PROFESSIONAL FIRM OF C.AS. 6. ON THE ISSUE OF LEVY OF PENALTY ON UNSUBSTANTIATED BAD DEBTS WRITTEN OFF, IT WAS SUBMITTED THAT BOTH THE A.O AND THE LD. CIT (A) HAD DISALLOWED THE AMOUNTS PERTAINING TO SUNDRY BALANCES/ DEBTORS ON THE GROUNDS OF THE SAME NOT HAVING BEEN ESTABLISHED AS HAVING BECOME IRRECOVERABLE, AND THE DETAILS OF THE BALANCES NOT BEING PROVIDED/DEBTS NOT BEING IDENTIFIABLE. THE LD. AR SUBMITTED THAT AS REGARDS THE FIRST LIMB IS OF THE DISALLOWANCE, RELIANCE IS PLACED ON THE DECISION OF THE APEX COURT IN THE CASE OF TRF LTD. V CIT(2010) 323 ITR 397( SC) WHERE IT HAS BEEN CONCLUSIVELY HELD THAT FOR THE PURPOSES OF SECTION 36(1)(VII)/36(2) IT IS NOT NECESSARY FOR THE ASSESS E TO ESTABLISH THAT DEBT, IN FACT, HAS BECOME IRRECOVERABLE, IT IS ENOUGH IF BAD DEBTS IS WRITTEN 9 ITA NO. 98 9/DEL/2013 OFF IN THE BOOKS OF ACCOUNT. THIS VIEW HAS BEEN FOLLOWED THEREAFTER. AS REGARDS THE SECOND LIMB I.E . THE DETAILS AND IDENTITY OF THE DEBTORS, THE LD. AR PLACED RELIANCE ON THE JUDGEMENT OF THE HONBLE DELHI HIGH COURT DATED 12.4.10 IN THE CASE OF CIT V MODI TELECOMMUNICATIONS LTD. 325 ITR 291 (DELHI WHEREIN IT WAS FOUND THAT OLD BALANCES RELATING TO ERSTWHILE CUSTOMERS TO WHOM PAGERS HAD BEEN SOLD WERE NO LONGER IDENTIFIABLE/ TRACEABLE, AND HAD BEEN WRITTEN OFF AS BAD DEBTS BY THE ASSESSEE. THE COURT HELD THAT INSPITE OF THE NON-IDENTIFIABILITY OF THE DEBTORS, THE WRITING OFF OF THE BAD DEBT WAS PRIMA FACIE EVIDENCE ON THE PART OF THE ASSESSE AND IT WAS SUFFICIENT COMPLIANCE WITH THE AMENDED PROVISIONS. IT WAS FURTHER SUBMITTED THAT IN THE ASSESSEES CASES FOR DIFFERENT ASSESSMENT YEARS, THERE IS NO UNANIMITY OF VIEWS FOR DISALLOWING THE SUNDRY BALANCES WRITTEN OFF BETWEEN THE A.O, THE LEARNED CIT (A) AND THE ITAT ITSELF INTER SE AND FROM YEAR TO YEAR. THE LD. AR ALSO PLACED A CHART 10 ITA NO. 9 89/DEL/2013 SHOWING THAT THERE IS NO CONCLUSIVE FINDING BY ANY AUTHORITY (EXCEPT THE HONBLE HIGH COURT FOR THE A.Y 2002-03), AS TO THE AMOUNT WAS DISALLOWABLE AND EVEN IF SO, FOR WHAT REASON. THE LD. AR PLACED RELIANCE ON CIT V BACARDI MARTINI INDIA LTD (2007)288 ITR 585(DELHI), AND READ OUT PARA15 THEREOF WHICH READS AS UNDER; THERE ARE CASES WHERE EXPENDITURE IS DISALLOWED BY THE ASSESSING OFFICER AND IT IS ALLOWED BY THE CIT (A). IT IS AGAIN DISALLOWED BY THE ITAT AND IN APPEAL ALLOWED BY THE HIGH COURT AND MAY BE DISALLOWED BY THE SUPREME COURT. MERELY BECAUSE THERE IS DIFFERENCE OF OPINION FOR ALLOWING OR DISALLOWING THE EXPENDITURE BETWEEN THE ASSESSEE AN D ASSESSING OFFICER, IT CANNOT BE SAID THAT ASSESSEE HAD INTENTION TO CONCEAL THE INCOME. 7. IT WAS FURTHER SUBMITTED THAT A PARTIAL DISALLOWANCE FROM THE BAD DEBTS WRITTEN OFF DOES NO T WARRANT LEVY OF PENALTY U/S 271(1)(C). THE LD. AR SUBMITTED THAT THE JUSTIFICATION FURNISHED FOR THE WRITE-OFF TO THE TUNE OF RS.210.20 LACS, FOR WHICH DETAILS WERE READILY AVAILABLE TO THE ASSESSEE AT T HE 11 ITA NO. 9 89/DEL/2013 TIME OF ASSESSMENT, WAS ACCEPTED BY THE AO. AS REGARDS THE DETAILS FOR THE BALANCE RS. 63.96 LACS, THEY COULD NOT BE READILY PRODUCED DUE TO THE ANTIQUITY OF THE TRANSACTIONS AND THE ASSESSEE NOT BEING ABLE TO RECOVER ALL PAST DOCUMENTS AND RECORD S FROM THE ARCHIVED RECORDS FROM ITS PREMISES WHICH HAD BEEN SHIFTED AND SPLIT A FEW TIMES. THIS DID NO T MEAN THAT THE TRANSACTIONS OF INCOME RESULTING IN THESE DEBTORS HAD NOT OCCURRED IN THE PAST YEARS WITH THE PRESENT COMPANY AND THE FIRM AND PREDECESSOR COMPANY WHOSE BUSINESS IT HAD TAKEN OVER. IT WAS FURTHER SUBMITTED THAT THE GLOBAL WRIT E- OFF POLICY UNIFORMLY ADOPTED BY THE COMPANY FROM YEAR TO YEAR BEING CONSISTENTLY THE SAME, AND THE GENUINENESS OF THE WRITE-OFFS FOR RS.210.20 LACS HAVING BEEN ACCEPTED, THE SAME WOULD APPLY TO THE BALANCE OF RS.63.96 LACS AS WELL. THE ONLY INABILIT Y TO READILY PROVIDE DOCUMENTS AND DETAILS OF THE SAME F OR THE ABOVE-STATED REASONS DOES NOT COLOUR THE WRITE- OFFS AS BEING A SUBJECT MATTER OF CONCEALMENT. 12 ITA NO. 9 89/DEL/2013 8. IT WAS FURTHER SUBMITTED THAT THE ITAT DECIDED AG AINST THE ASSESSEE IN THE QUANTUM APPEAL ON THIS ISSUE. HOWEVE R, FOR THE EARLIER AY 2002-03, THE ITAT HAS UPHELD THE ALL OWANCE BY THE LD. CIT(A) OF THE ENTIRE AMOUNT OF WRITE OFF OF BAD DEBTS AS CLAIMED AT RS. 93,40,308/- BY THE ASSESSEE AND THE HONBLE DELHI HIGH COURT IN ITA NO. 1332/2009 DT. 10.12.200 9, TOO UPHELD THE FINDINGS OF THE ITAT, ALLOWING THE WRITE O FF OF THE ENTIRE AMOUNT OF WRITE-OFF OF RS. 93.40 LACS U/S 36 (1)(VII) READ WITH SECTION 36(2). IT WAS SUBMITTED THAT THE ENTIRE QUESTION OF ALLOWABILITY OF THE WRITE OFF OF BAD DEBTS HAS HINGE D UPON IN INTERPRETING THE LEGAL NUANCES REGARDING THE TEST O F APPLICATION OF SECTION 36(1)(VII) READ WITH SEC. 36(2) OF THE AC T. THERE IS NO DISPUTE REGARDING THE FACTS, NOR IS ANYWHERE IN THE RELEVANT ORDERS THE QUESTION OF FILING IMPROPER OR INCOMPLET E PARTICULARS OF INCOME RAISED BY THE AO OR THE LD. C IT (A). 9. IN RESPONSE, THE LD. DR SUBMITTED THAT THE PEN ALTY HAS BEEN IMPOSED PURELY ON FACTS AND THAT NO LEGAL ISSU ES ARE INVOLVED. IT WAS ALSO SUBMITTED THAT THE CASE LAWS R ELIED UPON BY THE ASSESSEE WERE DISTINGUISHABLE ON FACTS. IT WA S 13 ITA NO. 9 89/DEL/2013 SUBMITTED THAT THE ITAT HAD ALSO CONFIRMED THE DISA LLOWANCE PERTAINING TO THE WRITE OFF OF DEBTS IN THE QUANTUM APPEAL AND HENCE THE PENALTY WAS RIGHTLY IMPOSED. IT WAS FURTHE R SUBMITTED THAT THE ASSESSEE HAD FAILED TO PROVE ITS BONA FIDES AFTER REPEATED OPPORTUNITIES AND THEREFORE THE PENA LTY HAD BEEN RIGHTLY IMPOSED. IT WAS ALSO SUBMITTED THAT TH E REVISED COMPUTATION SUBMITTED BY THE ASSESSEE CANNOT BE TAK EN AS A SUBSTITUTE FOR REVISED RETURN AND THAT EVEN THE OFF ER FOR REVISION WAS MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHEN THE SAME WAS DETECTED BY THE A.O. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. IT IS UNDISPUTED THAT THE ASSE SSEE HAD OMITTED TO ADD BACK RS. 106.09 LACS BEING PROVISION FOR BAD DEBTS AND RS. 10.40 LACS BEING LOSS ON SALE OF FIXE D ASSETS TO THE TAXABLE INCOME IN THE COMPUTATION SHEET. THE AS SESSEES CLAIM IS THAT THE MISTAKE WAS BONAFIDE AND THE ASSES SEE FILED A REVISED COMPUTATION AS SOON AS THE OMISSION WAS DISC OVERED DURING THE ASSESSMENT PROCEEDINGS AND HENCE THE PEN ALTY WAS NOT LEVIABLE. ON THE OTHER HAND, IT IS THE DEPARTME NTS 14 ITA NO. 9 89/DEL/2013 CONTENTION THAT SINCE THE OMISSION WAS SOUGHT TO BE RECTIFIED ONLY AFTER DETECTION, THE BONA FIDES OF THE ASSESSE E CANNOT BE ACCEPTED. THE ENTIRE CASE OF THE DEPARTMENT ON THIS ISSUE IS THAT THE ASSESSEE HAD FAILED TO SUBSTANTIATE ITS BO NA FIDES. IT IS ALSO SEEN THAT THE PENALTY ORDER HAS BEEN PASSED RE LYING ENTIRELY UPON THE ASSESSMENT ORDER AND THERE HAS BE EN NO DISCUSSION ON HOW THE BONA FIDES OF THE ASSESSEE WERE BEING DOUBTED WITHOUT ANY FINDING TO THE EFFECT. THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. V . STATE OF ORISSA 83 ITR 26 HAD LAID DOWN THE POSITION OF LAW B Y HOLDING THAT THE ASSESSING OFFICER IS NOT BOUND TO LEVY PEN ALTY AUTOMATICALLY SIMPLY BECAUSE THE QUANTUM ADDITION H AS BEEN SUSTAINED. ALSO IN CASE OF CIT V. KHODAY ESWARA (83 ITR 369) (SC), INCIDENTALLY REPORTED IN SAME ITR VOLUME, IT IS HELD THAT PENALTY CANNOT BE LEVIED SOLELY ON BASIS OF REASONS GIVEN IN ORIGINAL ORDER OF ASSESSMENT. THE HONBLE SUPREME C OURT HAS RECENTLY REITERATED THE LAW IN CASE OF DILIP N. SHRO FF V. JT. CIT [2007] 291 ITR 519 BY HOLDING IN PARA 62 THAT FINDI NG IN ASSESSMENT PROCEEDINGS CANNOT AUTOMATICALLY BE ADOP TED IN PENALTY PROCEEDINGS AND THE AUTHORITIES HAVE TO CON SIDER THE 15 ITA NO. 9 89/DEL/2013 MATTER AFRESH FROM DIFFERENT ANGLE. IT IS CLEAR FROM THE ASSESSMENT ORDER ITSELF THAT NEITHER ANY INFORMATIO N WAS CONCEALED NOR ANY INACCURATE PARTICULARS WERE FURNI SHED. THE ASSESSMENT ORDER ITSELF SAYS THAT THE AMOUNT WAS CLE ARLY SHOWN IN THE PROFIT AND LOSS ACCOUNT. THE MOMENT THE MISTAKE WAS BROUGHT TO THE NOTICE OF ASSESSEE, IT S OUGHT TO RECTIFY THE SAME. THE TERM INACCURATE PARTICULARS IS NOT DEFINED. EVEN IF THE EXPLANATIONS ARE TAKEN RECOURS E TO, A FINDING HAS TO BE ARRIVED AT HAVING REGARD TO CLA USE (A) OF EXPLANATION THAT THE ASSESSING OFFICER IS REQUIRE D TO ARRIVE AT A FINDING THAT THE EXPLANATION OFFERED BY THE AS SESSEE, IN THE EVENT HE OFFERS ONE, WAS FALSE. HE MUST BE FOUND TO HAVE FAILED TO PROVE THAT SUCH EXPLANATION IS NOT ONLY N OT BONA FIDE BUT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE INCOME WERE NOT DISCLOSED BY HIM. THUS, APART FROM HIS EXPLANATION BEING NOT BONA FIDE, IT SHOULD HAVE BEE N FOUND AS A FACT THAT HE HAS NOT DISCLOSED ALL THE FACTS, WHIC H WERE MATERIAL TO THE COMPUTATION OF HIS INCOME. THE EXPL ANATION MUST BE PRECEDED BY A FINDING AS TO HOW AND IN WHAT M ANNER HE FURNISHED THE PARTICULARS OF HIS INCOME. IT IS B EYOND ANY 16 ITA NO. 9 89/DEL/2013 DOUBT OR DISPUTE THAT FOR THE SAID PURPOSE THE ASSE SSING OFFICER MUST ARRIVE AT A SATISFACTION IN THIS BEHAL F. THE PRIMARY BURDEN OF PROOF IS ON THE REVENUE. THE STAT UTE REQUIRES A SATISFACTION ON THE PART OF THE ASSESSIN G OFFICER: HE IS REQUIRED TO ARRIVE AT A SATISFACTION SO AS TO SH OW THAT THERE IS PRIMARY EVIDENCE TO ESTABLISH THAT THE ASSESSEE HAD CONCEALED THE AMOUNT OR FURNISHED INACCURATE PARTIC ULARS AND THIS ONUS IS TO BE DISCHARGED BY THE DEPARTMENT. W HILE CONSIDERING WHETHER THE ASSESSEE HAS BEEN ABLE TO DI SCHARGE HIS BURDEN THE ASSESSING OFFICER SHOULD NOT BEGIN WI TH THE PRESUMPTION THAT HE IS GUILTY. SINCE THE BURDEN OF PROOF IN PENALTY PROCEEDINGS VARIES FROM THAT IN THE ASSESSM ENT PROCEEDINGS, A FINDING IN THE ASSESSMENT PROCEEDING S THAT A PARTICULAR RECEIPT IS INCOME CANNOT AUTOMATICALLY B E ADOPTED, THOUGH A FINDING IN THE ASSESSMENT PROCEEDINGS CONS TITUTES GOOD EVIDENCE IN THE PENALTY PROCEEDINGS. IN THE PE NALTY PROCEEDINGS THE AUTHORITIES MUST CONSIDER THE MATTE R AFRESH AS THE QUESTION HAS TO BE CONSIDERED FROM A DIFFERE NT ANGLE. IT IS IMPORTANT TO KEEP IN MIND THE FUNDAMENTAL LEGAL PROPOSITION THAT ASSESSMENT PROCEEDINGS ARE NOT CON CLUSIVE. 17 ITA NO. 9 89/DEL/2013 ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE SEPARATE AND DISTINCT. FINDINGS IN ASSESSMENT PROCEEDINGS DO NT OPERATE AS RES JUDICATA IN PENALTY PROCEEDINGS. FOR THIS PROPOSITION RELIANCE IS PLACED ON THE DECISION IN C IT VS. DHARAMCHAND L. SHAH (1993) 204 ITR 462 (BOM). IN VI JAY POWER GENERATORS LTD VS. ITO (2008)6 DTR 64 (DEL) I T WAS HELD THAT IT IS WELL SETTLED THAT THOUGH THEY CONSTITUTE GOO D EVIDENCE DO NOT CONSTITUTE CONCLUSIVE EVIDENCE IN PENALTY PR OCEEDINGS. DURING PENALTY PROCEEDINGS, THERE HAS TO BE REAPPRA ISAL OF THE VERY SAME MATERIAL ON THE BASIS OF WHICH THE ADDITIO N WAS MADE AND IF FURTHER MATERIAL IS ADDUCED BY THE ASSE SSEE IN THE COURSE OF THE PENALTY PROCEEDINGS, IT IS ALL THE MO RE NECESSARY THAT SUCH FURTHER MATERIAL SHOULD ALSO BE EXAMINED IN AN ATTEMPT TO ASCERTAIN WHETHER THE ASSESSEE CONCEALED HIS INCOME OR FURNISHED INACCURATE PARTICULARS. THUS, U NDER PENALTY PROCEEDINGS ASSESSEE CAN DISCHARGE HIS BURD EN BY RELYING ON THE SAME MATERIAL ON THE BASIS OF WHICH A SSESSMENT IS MADE BY CONTENDING THAT ALL NECESSARY DISCLOSURE S WERE MADE AND THAT ON THE BASIS OF MATERIAL DISCLOSED TH ERE CANNOT BE A CASE OF CONCEALMENT OF INCOME OR FURNISHING IN ACCURATE 18 ITA NO. 9 89/DEL/2013 PARTICULARS OF INCOME. FURTHER IF THERE IS ANY MATE RIAL OR ADDITIONAL EVIDENCE WHICH WAS NOT PRODUCED DURING ASSESSMENT PROCEEDINGS SAME CAN BE PRODUCED IN PENA LTY PROCEEDINGS AS BOTH ASSESSMENT AND PENALTY PROCEEDI NGS ARE DISTINCT AND SEPARATE. IN CIT VS. M/S SIDHARTHA ENT ERPRISES (2009) 184 TAXMAN 460 (P & H)(HC) IT WAS HELD THAT T HE JUDGMENT IN DHARMENDRA TEXTILE CANNOT BE READ AS LA YING DOWN THAT IN EVERY CASE WHERE PARTICULARS OF INCOME A RE INACCURATE, PENALTY MUST FOLLOW. EVEN SO, THE CONCEP T OF PENALTY HAS NOT UNDERGONE CHANGE BY VIRTUE OF THE S AID JUDGMENT. PENALTY IS IMPOSED ONLY WHEN THERE IS SOME ELEMENT OF DELIBERATE DEFAULT. IN PRICE WATERHOUSECOOPERS (P.) LTD. V. CIT [2012] 25 TAXMANN.COM 400/211 TAXMAN 40, THE HON'BLE APEX COURT HELD THAT CALIBRE AND EXPERTISE OF ASSESSEE HAVE LITTLE TO DO WITH INADVERTENT ERROR. IN THAT CASE THE ASSESSEE-FIRM ENGAGED IN PROVIDING MULTI-DISCIPLINA RY MANAGEMENT CONSULTANCY SERVICES FILED ITS RETURN OF INCOME ALONG WITH TAX AUDIT REPORT. A PROVISION TOWARDS PAYM ENT OF GRATUITY WAS CLAIMED AS A DEDUCTION WHICH WAS NOT ALLO WABLE, THEREBY LEADING TO UNDERASSESSMENT OF INCOME. THE A SSESSING 19 ITA NO. 9 89/DEL/2013 OFFICER IMPOSED A PENALTY UNDER SECTION 271(1)( C ). THE CIT (A) UPHELD THE LEVY OF THE PENALTY; ITAT PARTIALLY REDU CED IT, TAKING A VIEW THAT THE ASSESSEE HAD MADE A MISTAKE WHICH COU LD BE DESCRIBED AS A SILLY MISTAKE. 11. THE ORDER OF THE TRIBUNAL WAS UPHELD BY THE HO NBLE HIGH COURT. ON FURTHER APPEAL, THE HON'BLE APEX COU RT OBSERVED AS FOLLOWS: ' THE CONTENTS OF THE TAX AUDIT REPORT SUGGEST THAT T HERE IS NO QUESTION OF THE ASSESSEE CONCEALING ITS INCOME. THERE IS ALSO NO QUESTION OF THE ASSESSEE FURNISHING ANY INA CCURATE PARTICULARS. IT APPEARS THAT ALL THAT HAS HAPPENED IN THE PRESENT CASE IS THAT THROUGH A BONA FIDE AND INADVE RTENT ERROR, THE ASSESSEE WHILE SUBMITTING ITS RETURN, FA ILED TO ADD THE PROVISION FOR GRATUITY TO ITS TOTAL INCOME. THI S CAN ONLY BE DESCRIBED AS A HUMAN ERROR WHICH WE ARE ALL PRONE T O MAKE. THE CALIBER AND EXPERTISE OF THE ASSESSEE HAS LITTL E OR NOTHING TO DO WITH THE INADVERTENT ERROR. THAT THE ASSESSEE SHOULD HAVE BEEN CAREFUL CANNOT BE DOUBTED, BUT THE ABSENCE OF DUE CARE, IN A CASE SUCH AS THE PRESENT, DOES NOT MEAN THAT THE ASSESSEE IS GUILTY OF EITHER FURNISHING INACCURATE PARTICULARS OR ATTEMPTING TO CONCEAL ITS INCOME.' 20 ITA NO. 9 89/DEL/2013 12. THE HON'BLE BOMBAY HIGH COURT IN CIT V. SOMANY EVERGREEN KNITS LTD. [2013] 35 TAXMANN.COM 529 HELD THAT EXCESS DEPRECIATION ORIGINALLY CLAIMED WAS ON ACCOUN T OF BONA FIDE AND INADVERTENT MISTAKE ON THE PART OF THE RESPOND ENT- ASSESSEE. THE TRIBUNAL RIGHTLY HELD THAT MISTAKE SH OULD NOT BE VISITED WITH PENALTY. DURING THE ASSESSMENT PROCEEDI NGS, THE MISTAKE WAS NOTICED AND CORRECTED BY THE RESPONDENT - ASSESSEE. ON THE ABOVE FACTS, THE TRIBUNAL CONCLUDE D THE CLAIM FOR DEDUCTION MADE BY THE RESPONDENT-ASSESSEE WAS O N ACCOUNT OF A BONA FIDE MISTAKE AND IN SUCH CIRCUMSTANCES THE LEVYING OF PENALTY WAS NOT JUSTIFIED. 13. AT THIS JUNCTURE IT MAY BE APPOSITE TO REFER TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT V. RELIANCE PETROPRODUCTS (P.) LTD . [2010] 322 ITR 158/189 TAXMAN 322, WHEREIN THE COURT WHILE INTERPRETING THE PROVISIONS O F SECTION 271(1)( C ) OF THE ACT, HAS HELD THAT A GLANCE AT THE SAID PROVISION WOULD SUGGEST THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INC OME OF THE 21 ITA NO. 9 89/DEL/2013 ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE OF HIS INCOME. IN THE FACTS OF THAT CASE, THE COURT FOUND THAT IT WAS NOT A CASE OF CONCEALMEN T OF THE PARTICULARS OF THE INCOME, NOR WAS IT THE CASE O F THE REVENUE EITHER. HOWEVER, THE COUNSEL FOR THE REVENU E SUGGESTED THAT BY MAKING AN INCORRECT CLAIM FOR THE EXPENDITURE ON INTEREST, THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME. THE COU RT OBSERVED THAT IT HAD TO ONLY SEE AS TO WHETHER IN TH AT CASE, AS A MATTER OF FACT, THE ASSESSEE HAD GIVEN INACCURATE PARTICULARS. THE COURT NOTED THAT AS PER LAW LEXICON, THE MEANING OF THE WORD 'PARTICULAR' IS A DETAIL OR DETAILS (IN THE PLU RAL SENSE); THE DETAILS OF A CLAIM, OR THE SEPARATE ITEMS OF AN ACC OUNT. THEREFORE, THE WORD 'PARTICULAR' USED IN SECTION 271 (1)( C ) WOULD EMBRACE THE MEANING OF THE DETAILS OF THE CLAI M MADE. THE COURT FURTHER OBSERVED THAT IN WEBSTER'S DICTIONARY, THE WORD 'INACCURATE' HAS BEEN DEFINED AS: 'NOT ACCURATE , NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS ; AS AN INACCURATE STATEMENT, COPY OR TRANSCRIPT.' THE C OURT OBSERVED THAT READING THE WORDS 'INACCURATE' AND 'P ARTICULARS' 22 ITA NO. 9 89/DEL/2013 IN CONJUNCTION, THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORRECT , NOT ACCORDING TO TRUTH OR ERRONEOUS. THE COURT NOTED TH AT IT WAS AN ADMITTED POSITION THAT NO INFORMATION GIVEN IN T HE RETURN WAS FOUND TO BE INCORRECT OR INACCURATE. IT WAS NOT AS IF ANY STATEMENT MADE OR ANY DETAIL SUPPLIED WAS FOUND TO BE FACTUALLY INCORRECT AND ACCORDINGLY, HELD THAT, PRIMA FACIE , THE ASSESSEE COULD NOT BE HELD GUILTY OF FURNISHING INA CCURATE PARTICULARS. THE COURT REPELLED THE CONTENTION RAIS ED BY THE COUNSEL FOR THE REVENUE THAT 'SUBMITTING AN INCORRE CT CLAIM IN LAW FOR THE EXPENDITURE ON INTEREST WOULD AMOUNT TO GIVING INACCURATE PARTICULARS OF SUCH INCOME'. THE COURT HELD THAT IN ORDER TO EXPOSE THE ASSESSEE TO THE PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENA LTY PROVISION CANNOT BE INVOKED. BY ANY STRETCH OF IMAGINATION, M AKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. THEREFORE, IT IS OBVIOUS THAT IT MUST BE SHOWN THAT THE CONDITIONS UNDER SECTION 271(1)( C ) MUST EXIST BEFORE THE PENALTY IS IMPOSED. THE COURT FURTHER OBSERVED THAT THERE CAN BE NO DISPUTE THAT EVERYTHI NG WOULD 23 ITA NO. 9 89/DEL/2013 DEPEND UPON THE RETURN FILED BECAUSE THAT IS THE ON LY DOCUMENT, WHERE THE ASSESSEE CAN FURNISH THE PARTICU LARS OF HIS INCOME. 14. REVERTING TO THE FACTS OF THE PRESENT CASE, THE ASSESSING OFFICER, IN THE PENALTY ORDER, HAS OBSERVED THAT TH E ADDITION/DISALLOWANCE MADE ON ACCOUNT OF PROVISION OF BAD DEBTS AND WRITE OFF OF FIXED ASSETS WERE FOUND OUT B Y THE ASSESSING OFFICER ONLY DURING THE COURSE OF ASSESSM ENT PROCEEDINGS AND HAD NOT BEEN DISCLOSED BY THE ASSES SEE. HE, ACCORDINGLY, HAS FORMED THE OPINION THAT THE ASSESS EE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. HOWEVER , AS HELD BY THE SUPREME COURT IN THE ABOVE DECISION, MERELY SUBMITTING AN INCORRECT CLAIM IN LAW FOR THE EXPENDI TURE WOULD NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS OF INCOME. IT IS UNDISPUTED THAT THE IMPUGNED AMOUNTS WERE PART O F THE SCHEDULES OF THE AUDITED ACCOUNTS AND THE AO NOTICE D THE OMISSION FROM THESE ACCOUNTS ONLY. IT IS AGAIN UNDI SPUTED THAT THESE ACCOUNTS FORM A PART AND PARCEL OF THE RETURN OF INCOME. THE FACT THAT THE ASSESSEE IMMEDIATELY OFFERED TO R ECTIFY THE 24 ITA NO. 9 89/DEL/2013 MISTAKE ON DETECTION IS ALSO UNDISPUTED. IT IS ONLY THAT THE CLAIM OF THE BONA FIDE OF THE ASSESSEE WAS NOT ACCEP TED BY THE DEPARTMENT. I T IS ALSO IMPORTANT TO NOTE THAT EXPLANATION 1 TO SECTION 271(1)(C) CANNOT BE APPLIED WHERE CHARGE AGA INST THE ASSESSEE IS FURNISHING OF INACCURATE PARTICULARS OF INCOME SINCE IT PROVIDES A DEEMING FICTION QUA CONCEALMENT OF PARTICULARS OF INCOME ONLY AND CONSEQUENTLY CANNOT BE EXTENDED TO A CASE WHERE CHARGE AGAINST THE ASSESSEE IS FURNISHING OF INACCURATE PARTICULARS OF INCOME. HEN CE IN LIGHT OF THE JUDICIAL PRECEDENTS AS AFORESAID DISCUSSED W E ARE UNABLE TO AGREE WITH THE FINDINGS OF THE AUTHORITIES BELOW O N THE IMPOSITION OF PENALTY ON THE ISSUE OF PROVISION FOR BAD DEBTS AND LOSS SALE OF FIXED ASSETS NOT ADDED BACK TO THE COMPUTATION OF INCOME BY THE ASSESSEE. 15. COMING TO THE SECOND ISSUE ON WHICH THE PENALTY HAS BEEN LEVIED, IT IS SEEN THAT THE ITAT DECIDED AGAINST TH E ASSESSEE IN THE QUANTUM APPEAL ON THIS ISSUE. HOWEVER, FOR THE EARLIER AY 2002-03, THE ITAT HAS UPHELD THE ALLOWANCE BY THE L D. CIT(A) OF THE ENTIRE AMOUNT OF WRITE OFF OF BAD DEBTS AS CL AIMED AT RS. 25 ITA NO. 9 89/DEL/2013 93,40,308/- BY THE ASSESSEE AND THE HONBLE DELHI HIGH COURT IN ITA NO. 1332/2009 DT. 10.12.2009, TOO UPHELD THE FINDINGS OF THE ITAT, ALLOWING THE WRITE OFF OF THE ENTIRE AMO UNT OF WRITE-OFF OF RS. 93.40 LACS U/S 36(1)(VII) READ WITH SECTION 36(2). THUS, THE ENTIRE QUESTION OF ALLOWABILITY OF THE WRITE OFF OF BAD DEBTS HAS HINGED UPON IN INTERPRETING THE LE GAL NUANCES REGARDING THE TEST OF APPLICATION OF SECTIO N 36(1)(VII) READ WITH SEC. 36(2) OF THE ACT. THERE IS NO DISPUT E REGARDING THE FACTS, NOR IS ANYWHERE IN THE RELEVANT ORDERS TH E QUESTION OF FILING IMPROPER OR INCOMPLETE PARTICULARS OF INC OME RAISED BY THE AO OR THE LD. CIT (A). IT IS UNDISPUTED THAT TH E ASSESSEE HAS BEEN CLAIMING BAD DEBTS EVERY YEAR AND EVERY YE AR THE ISSUE WAS BEING EXAMINED AND THE QUESTION REGARDING THEIR ALLOWABILITY WAS BEING DECIDED EVERY YEAR DEPENDING O N THE FACTS OF THE CASE EVERY YEAR. IN THE YEAR UNDER CON SIDERATION, A CO-ORDINATE BENCH OF THE ITAT HAS GIVEN A FINDING T HAT THE ASSESSEE HAS NOT BEEN ABLE TO ESTABLISH AS TO WHETHE R THESE DEBTS WERE CAPITAL DEBTS OR TRADE DEBTS AND HAS HEL D THAT THE AMOUNTS CLAIMED WERE NOT DEDUCTIBLE. HOWEVER, IT IS OUR CONSIDERED OPINION THAT THE ADDITION/DISALLOWANCE H AS NOT 26 ITA NO. 9 89/DEL/2013 ARISEN ON ACCOUNT OF ANY ACTUAL, BLATANT, PROVEN FU RNISHING OF INACCURATE PARTICULARS OF INCOME ON THE PART OF THE ASSESSEE. THE HONBLE HIGH COURT OF PUNJAB & HARYANA IN CIT V S. PREM DAS (NO. 1) 1999 248 ITR 234 (11/5/1999) & CIT VS. PREM DAS (NO. 2) 248 ITR 237 (2/8/2000) HAS HELD THAT NO PENALTY U/S 271(1)(C) IS LEVIABLE IN A CASE WHERE THE DIFFE RENCE BETWEEN THE RETURNED INCOME AND THE ASSESSED INCOME ARISES ON ACCOUNT OF A DIFFERENCE IN OPINION. SIMILARLY, IN C IT VS. GEO SEA FOODS : 1999 : 244 ITR 44 THE HONBLE KERALA HI GH COURT REFERRING TO A JUDGMENT OF THE HONBLE CALCUTTA HIG H COURT HELD AS FOLLOWS: CALCUTTA HIGH COURT IN BURMAH SHELL OIL STORAGE & DISTRIBUTING CO. OF INDIA LTD. VS. ITO [1978] 112 I TR 592, WHEREIN IT WAS HELD THAT THERE COULD BE NO CONCEALMENT IN A CASE WHERE ON ADMITTED FACTS THE ASSESSEE DISPUTED THE LIABILITY TO TAX ON LEGAL CONTENTIONS. IT WAS ALSO HELD IN THAT CASE THAT TH E EXPLANATION TO SEC. 271(1)(C) COULD NOT ALSO APPLY BECAUSE WHEN LEGAL CONTENTIONS ARE BONA FIDE RAISED, WHETHER ULTIMATELY ACCEPTED OR REJECTED, WI LL NOT GENERALLY BE AN ACT OF FRAUD OR GROSS OF WILLFU L NEGLIGENCE. PENALTY UNDER THIS SECTION CANNOT BE 27 ITA NO. 9 89/DEL/2013 LEVIED UNLESS FOR ALL GROSS OR WILLFUL NEGLIGENCE O N THE PART OF ASSESSEE IS ESTABLISHED. LEGAL CONTENTION BONA FIDE RAISED, WHETHER IT IS FINALLY ACCEPTED OR NOT, WILL NOT BE AN ACT OF FRAUD OR WILLFUL NEGLIGE NCE. 16. THE ASSESSEES CASE GETS A STRONGER FOOTING FRO M THE DECISION OF THE HONBLE DELHI HIGH COURT IN ITS OWN CASE FOR AY 2002-03 WHEREIN THE HONBLE DELHI HIGH COURT HAS UPHELD THE ASSESSEE COMPANYS POLICY OF WRITE OFFS T HUS SUPPORTING THE ASSESSEES PLEA THAT THE WRITE OFF OF BAD DEBTS HAS BEEN IN DISPUTE IN DIFFERENT ASSESSMENT Y EARS AND THEREFORE, TO TERM IT AS FURNISHING OF INACCURA TE PARTICULARS OF INCOME FOR THE PURPOSE OF LEVY OF PE NALTY WILL BE INAPPROPRIATE. HENCE, WE ARE UNABLE TO AGREE WITH THE FINDINGS OF THE LOWER AUTHORITIES ON THIS ISSUE ALSO. 17. WE SET ASIDE THE IMPUGNED ORDER AND DIRECT THE AO TO DELETE THE ENTIRE PENALTY. 28 ITA NO. 9 89/DEL/2013 18. IN THE FINAL RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 08.07.2016 SD/- SD/- (N.K. SAINI) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON (HANDWRITTEN) 06.07.16/08.07.1 6 2. DRAFT PLACED BEFORE AUTHOR 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 08.7.16 6. KEPT FOR PRONOUNCEMENT ON 08.7.16 7. FILE SENT TO THE BENCH CLERK 08.7.16 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 29 ITA NO. 9 89/DEL/2013