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TMI Blog2013 (10) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... w that the said amount was actually income of the assessee of the year under consideration, in our considered, view levy of penalty u/s. 271(1)(c) in respect of the said amount was not justified. Further in respect of amount of Rs. 11,58,112/- which was claimed by the assessee as bad debt, no material was brought before us to show that the claim was false. Reliance has been placed upon the judgment in the case of Reliance Petroproducts [2010 (3) TMI 80 - SUPREME COURT], wherein it was held that merely because a deduction claimed by the assessee was found to be not allowable, does not entitle the Department to levy penalty u/s. 271(1)(c) - Decided against the revenue. - ITA No. 2667/Ahd/2010 - - - Dated:- 10-10-2013 - Sri Mukul Kr. Shrawat And Shri N. S. Saini,JJ. For the Petitioner : Sri J. P. Jhangid, Sr. D. R. For the Respondent : Sri Vijay Ranjan, A.R. ORDER Per : N. S. Saini, Accountant Member:- This is an appeal filed by the revenue against the order of Ld. CIT(A)- XIV Ahmedabad dated 17-06-2010. 2. The sole issue involved in this appeal of the revenue is that the CIT(A) has erred in deleting the penalty of Rs. 6,86,939/- u/s. 271(1)(c) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ils of which are as follows:- A/c. Year Amount 2001-02 2,27,086/- 2002-03 3,17,982/- Total: 5,45,068/- 7. It was submitted that it has been noticed in the assessment order as well as in the penalty order that goods worth about Rs. 5.45 lacs were received in the preceding two years and goods worth Rs. 4,41,840/- were received in the previous year relevant to the year under appeal i.e. A.Y. 2004-05, the total value of goods received in this year and immediately preceding two years was almost equal to the payments made during the year of Rs. 9,88,409/-. Thus it was reasonable to infer that the said payments were made for the value of goods received in these three consecutive financial years relevant to the year under appeal. Ultimately, the aforesaid sum of Rs. 11,58,112/- has been written off. Therefore it was not unreasonable to infer that the assessee s case for claiming deduction was justified. It was finally submitted that all the facts and figures were disclosed and those very facts and figures have formed the basis for the aforesaid disallowances of Rs. 11,58,112/-. Hence the allegation of concealment or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 956 (SC) wherein it was held that when primary facts are disclosed, it cannot be regarded as a failure on the part of the assessee to disclose fully and truly all material facts. It was also submitted that it is not a deemed concealment or deemed furnishing of inaccurate particulars either, because its case is not covered even by Explanation-I below section 271(1)(c). The assessee in this case has furnished explanation and the Department has not found the same to be false. This provision has been analyzed and explained by the Hon ble Gujarat High Court in the case of Sarabhai Chemical P. Ltd vs. CIT 257 ITR 355(Guj). It was further submitted that the Delhi High Court approved the Tribunal s decision in deleting the penalty for concealment when the assessee had claimed a deduction on revenue account for fees paid to the Registrar of Companies for increasing the authorized share capital. The SLP (Civil) No. 30148 of 2008 held by the Department was dismissed which is reported in 308 ITR 14. 10. Ld. CIT(A) after considering the submissions of the assessee deleted the penalty. 11. Ld. DR fully justified the order of AO levying the penalty. He argued that the bad debts claimed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilty for furnishing or disclosing true and full particulars and, therefore, not liable to be penalized. d) Considering ratio of various case laws and issue involved in all such additions, multiple interpretation is possible. The appellant considered such interpretation which is favourable to it and, therefore, its bonafide cannot be held as malafide and to be penalised. e) The appellant's explanation in respect of show cause to penalty notice was neither held false by A.O. nor same was proved to be malafide. As per settled legal proportion for penalty imposition, the proceedings were held to be different than asst. proceedings. The A.O. failed to bring out by any effort the various issues raised by the appellant as controvertable or false or malafide. Merely the fact that additions made by A.O. were confirmed by Ld. CIT(A) does not automatically empower the A.O. to impose penalty. Hon'ble Supreme Court in a recent judgment in the case of CIT vs. Reliance Petroproducts Pvt. Ltd. (2010) 322 ITR 158 held that "if no information given in return of income found to be incorrect and therefore, making incorrect claim does not arise and the same does not amount to concealment of parti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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