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TMI Blog2012 (12) TMI 660X X X X Extracts X X X X X X X X Extracts X X X X ..... ether and are being disposed of through this consolidated order. We, however, take up the appeal in ITA No. 562/LKW/2011 for assessment year 2003-04 as a lead case and discuss its facts as under. 3. The facts in brief borne out from the record are that the assessee has claimed deduction under section 80HHC and 80IB of the Act on gross total income without deducting the income derived from DEPB, duty draw back and premium on sale of DEPB. In quantum, the deduction was disallowed in the light of the judgment in the case of CIT v. Ritesh Industries Ltd [2004] 192 CTR 81, against which an appeal was filed before the ld. CIT(A) which was also dismissed. Consequently, penalty was levied under section 271(1)(c) of the Act for furnishing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether deduction under section 80IB and 80HHC of the Act can be allowed on an income derived from DEPB, duty draw back and premium on sale of DEPB was quite debatable that is why the matter has travelled upto Hon'ble Apex Court and through the judgment in the case of Liberty India v. CIT (supra) the controversy has been set at rest; that too in the year 2009. Therefore, till 2009 the issue was debatable as different High Courts have expressed different views. Therefore, under a bona-fide belief the assessee has claimed deduction under section 80HHC and 80IB of the Act of the income derived from DEPB and duty draw back, for which penalty under section 271(1)(c) of the Act cannot be levied. In support of his contention, the ld. counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act on the income derived from DEPB and duty draw back. We have also examined the other judgments referred to by the assessee and the order of the ld. CIT(A) who was deleted the additions. We find that the ld. CIT(A) has examined the issue in the light of various judicial pronouncements including the judgment of the Apex Court in the case of CIT v. Reliance Petroproducts (P) Ltd. [2010] 322 ITR 158 (SC) and we find that the ld. CIT(A) has rightly adjudicated the issue under the given facts and circumstances of the case. For the sake of reference, we extract the observations of the ld. CIT(A) as under:- "While deciding the issue in appeal, one has to be seen as to whether the impugned claim made by the appellant company (u/s 80IB) by inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y correct details and information about income. The admission or rejection of a claim is a subjective exercise and whether a claim is accepted or rejected has nothing to do with furnishing of inaccurate particulars of income. The A.O. has apparently proceeded to treat assessee's making an incorrect claim of income as furnishing of inaccurate particulars. What is a correct claim and what is an incorrect claim is a matter of opinion. In my considered view, raising a legal claim, even if it is ultimately found to be legally unacceptable, cannot amount to furnishing of inaccurate particulars of income. 'Inaccurate', as I have noted above, is something factually incorrect and interpretation of law can never be a factual aspect. The development o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in law, by itself, will not amount to furnishing inaccurate particulars regarding income of the assessee". The situation that I am dealing with is materially similar inasmuch as the penalty has been imposed only for concealment of particulars and it has not been the case of the revenue at any stage that any factual particulars furnished by the assessee are false. The penalty has been imposed because of legal inadmissibility of the claim of deduction. In view of these discussions, as also bearing in mind entirety of the case, I am of the considered view that it was indeed not a fit case for imposition of penalty under section 271(1)(c) of the Act. I, therefore, direct the Assessing Officer to delete the impugned penalty." 8. Since no infir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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