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TMI Blog2012 (7) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... eration. Penalty proceedings were initiated as a result of the addition made and after considering the arguments of the assessee namely that simply because addition/disallowances have been sustained in appeal this ipso facto would not lead to levy of penalty; that assessment proceedings and penalty proceedings must be considered independently; that there is no prejudice caused to the Revenue if the amount is allowable in the next year. As such it was requested that the penalty proceedings be dropped. 3. However, not convinced, penalty to the extent of Rs.6,76,962/- was imposed on the ground of furnishing of inaccurate particulars of income as the argument that the reasons which prevailed with the A.O. were that had the case not been selected for scrutiny, the fact that the assessee had debited an amount of Rs.18,50,000/- in its Profit & Loss a/c would not have come to light. It was observed that addition made in the quantum proceedings in the assessment order stood confirmed in appeal by the CIT(A) who also had held that the said expenses/liability had not crystallized in the year under consideration as such it could not be treated as expenses in the year under consideration; he w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aper book and specific page 28 para 4 was referred to. Inviting attention to paper book page 19 which is the order of the Arbitrator which refers to the fact that first sitting took place on 13.8.2005 as the arbitration order was dt. 13.8.05 which refers to the dispute M/s Coronation Projects P.Ltd. and M/s Excelcia Foods Ltd. Referring to the same it was submitted that it refers to the fact that the parties have amicably arrived at an out of court settlement. Accordingly it was his claim that the assessee had made a claim as per the fact that the out of Court settlement took place in the year under consideration and the liability stood crystallized. The claim it was stated was not false and on facts has rightly been held by the ld.CIT(A) as not attracting penalty proceedings. 7.1 It was his argument that even otherwise the impugned order deserves to be upheld as the AO as per page 25 of the paper book page 25 of the paper book has initiated penalty proceedings for concealment as is evident from paper book page 25 and the penalty has been levied as per the penalty order page 2 para 5 for furnishing inaccurate particulars. It was his contention that the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is seen that as per the documents made available on record by the ld.A.R. who invited attention to "Certificate of Incorporation" placed at pages 1 of the supplementary paper book filed in the name mentioned is Excelcia Foods Ltd. as on 28.11.2006. Subsequently as per page 2 Excelcia Foods Ltd. name was changed to Nestle Purina Petcare India P.Ltd. as per Certificate enclosed dt. 2.3.2004. Thereafter as per supplementary paper book page 3 Nestle Purina Pet Care India Ltd. which was earlier known as Purina Petcare India Pvt. Ltd. as from 13.9.2004 and as per supplementary paper book page 4 from 2.2.2007 M/s Purina Petcare India P.Ltd. changed its name to Speciality Foods India P.Ltd. from 2.2.2007. In this context document referred to at page 19 in the Arbitration Order refers to M/s Coronation Projects P.Ltd. and M/s Excelcia Foods Ltd. pertains to the assessee and the assessment order referring to M/s Speciality Foods India P.Ltd. which was formerly Pet Care India Ltd. pertains to the same assessee. Having gone through the documentation on record and noting the fact that as a result of litigation between the assessee and M/s Coronation Projects P.Ltd. the assessee had gone to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o applicability herein as there is consistently explanation offered by the assessee both on facts and law before all the forums. 9.2 The assessee on the other hand has relied on Jayant Veg Oils and Chemcials P.Ltd. vs CIT 323 ITR 641 (Bom) wherein in the facts of the said case it was stated that there is a factually accepted position that the disallowance of fine in lieu of confiscation of goods was made by an order of the Court in March, 1980 and the assessee received the order in April, 1980 then when the assessee filed its letter the assessee knew that the fine in lieu of confiscation had been cancelled. Following the mercantile system the books entries had already been made when the liability accrued which was reversed only in the subsequent year and the amount was offered to tax in the next year. The contention put forth was that at best it can only be an inadvertent error of judgement. The amount was offered for tax in the next year as such it was accepted that the lapse was not deliberate. The principle laid down in the said judgement was stated to be applicable as here also at best it can be said that it can be described to be an error of judgement ..... X X X X Extracts X X X X X X X X Extracts X X X X
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