9911796707
TMI Blog2014 (11) TMI 1034X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision in assessee’s case for the A.Y. 2003-04, came after the date of filing of return of income for the A.Y. 2004-05. Thus, it cannot be held that assessee has furnished any inaccurate particular of income at the time of filing of return of income - Decided in favour of assessee Inclusion of undisclosed income in its return filed u/s 153A - Held that:- Statement of Shri Ashok M. Seth, Executive Director of the company was also recorded u/s 131 during the course of survey u/s 133A, which was carried out simultaneously and explained the contents of impounded material and its implication in the books of account. Base on the seized documents, an income of ₹ 49,21,666/- was offered as undisclosed income. This amount was included in the return of income filed on 17.08.2009, in response to notice u/s 153A dated 06.07.2009. After including this income the total income was shown at ₹ 6,21,05,765/-. In the assessment order, the assessing officer had discussed specifically the related seized documents and the amount of interest/incentives which was received in cash and, found to be not recorded in the books of account. The declaration made by the assessee had been accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by your appellant u/s 80IB of Income Tax Act, 1961 on account of duty drawback. It is prayed that there has been no concealment or furnishing of inaccurate particulars of Income and therefore Penalty u/s 271(1)(c) of Income Tax Act, 1961 as levied should be deleted. 3. Brief facts of the case are that, a search and seizure action u/s 132(1) and survey action u/s 133A was carried out in the case of assessee and other concerned group on 09.02.2009, at the business premises and also the residential premises of the directors. The assessee is mainly engaged in the business of manufacturing and trading of stainless steel pipes and tubes. For the A.Y. 2004-05, the assessee has filed its return income u/s 139(1) on 31.10.2004, declaring total income of ₹ 24,99,253/- In the return of income the assessee had claimed deduction u/s 80IB of ₹ 7,73,993/-, which was 30% of the profit of the industrial undertaking. The said claim at that time stood accepted. This was the 3rd year for the assessee for which assessee had claimed the deduction u/s 80IB. In pursuance to the search action u/s 132(1) on 09.02.2009, notice u/s 153A was issued and served upon the assessee. In response to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as based on auditor s report and certificate and therefore, such a claim was bona fide. He further submitted that, prior to Supreme Court decision in the case of Liberty India Vs. CIT, reported in (2009) 317 ITR 218, there were decisions in favour of the assessee also. The decision of Liberty India came much after the filing of return of income. Lastly, he relied upon the decision of CIT Vs. Arvind Footwear Pvt. Ltd., reported in (2012) 72 DTR 294, wherein Hon ble Allahabad High Court on similar claim of deduction u/s 80IB on export incentive by way of duty drawback have confirmed the deletion of the penalty. Thus the assessee s case is squarely covered by the decision of the Hon ble Allahabad High Court. 6. On the other hand Ld. DR strongly relied upon the order of the AO and submitted that, once the Hon ble Supreme Court has held that such a claim for deduction u/s 80IB on export incentive by way of duty drawback is not allowable, then the claim made by the assessee itself was not legally sustainable and therefore, such a claim amounts to furnishing of inaccurate particulars of income. 7. We have heard the rival submissions and also perused the relevant material placed on r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 80IB on the amounts of incentives by way of duty drawback when there was difference of opinion prevalent at the relevant time. Thus on the present facts also, the penalty levied on claim of deduction u/s 80IB is deleted and accordingly assessee s appeal for the A.Y. 2004- 05 is allowed. 8. Now we will take up appeal for A.Y. 2008-09, being ITA No. 5257/Mum/2012, vide which following ground has been raised: The Hon ble Commissioner of Income Tax (Appeals) (herein referred as CIT(A) ) has erred in confirming order of the learned assessing officer levying the Penalty of ₹ 15,20,795/- u/s 271(1)(c) of Income Tax Act, 1961 without considering the facts and submissions made during the Penalty Proceedings. The Penalty of ₹ 15,20,795/- has been levied on the amount of ₹ 49,21,666/- declared as undisclosed income by the assessee. It is submitted that your appellant has duly included such undisclosed income in its return filed u/s 153A of Income Tax Act, 1961 and has duly paid tax on such income. It is prayed that there has been no concealment or furnishing of inaccurate particulars of Income and therefore Penalty u/s 271(1)(c) of Income Tax Act, 1961 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e particulars of income on the amount of ₹ 49,21,666/-, as the assessee had not shown this amount in the original return of income filed on 30.09.2008. Accordingly he levied penalty of ₹ 15,20,795/-. Such a penalty has also been confirmed by the Ld.CIT(A), relying on certain decisions which has been dealt by the Ld.CIT(A) at pages 31 to 33 of the appellate order. The sum and substance of his reasoning is that, in view of Explanation 5A to section 271(1)(c), immunity is not available to the assessee for undisclosed income found in respect of any assessment year in the course of search, for which the time limit for filing of return of income had elapsed. Thus he confirmed the penalty on the income disclosed in the return of income filed u/s 153A of ₹ 49,21,666/- 11. Before us Ld. Senior counsel, Shri K. Shivram submitted that section 153A uses the word notwithstanding anything contained in section 139 , which inter alia means that, when the notice u/s 153A is issued, the earlier return of income filed becomes nonest and only return of income which is relevant for the assessment is, return of income filed u/s 153A. Since the assessee has disclosed the correct inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee in cash or cheques under the head brokerage/commission. Statement of Shri Ashok M. Seth, Executive Director of the company was also recorded u/s 131 during the course of survey u/s 133A, which was carried out simultaneously and explained the contents of impounded material and its implication in the books of account. Base on the seized documents, an income of ₹ 49,21,666/- was offered as undisclosed income. This amount was included in the return of income filed on 17.08.2009, in response to notice u/s 153A dated 06.07.2009. After including this income the total income was shown at ₹ 6,21,05,765/-. In the assessment order, the assessing officer had discussed specifically the related seized documents and the amount of interest/incentives which was received in cash and, found to be not recorded in the books of account. The declaration made by the assessee had been accepted by the assessing officer in the order passed u/s 143(3) r.w.s. 153A, dated 31.12.2010. In the course of the penalty proceedings, the assessee s submission before the AO was as under: 1. Assessee company has filed return of Income on 30.9.2008 U/s. 139 declaring total Income at ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culars of income at' the 'time of filing of the return, hence no penalty should be levied. 7. In view of the above facts and above. legal case laws, it Is prayed that penalty proceedings in the case of the assessee should be dropped. However, the assessing officer has levied the penalty after invoking Explanation 5A to section 271(1)(c). The main issue before us is, whether under the aforesaid facts, penalty can be said to be leviable under Explanation 5A to section 271(1)(c). For sake of ready reference Explanation 5A which has been brought in the statute w.e.f. 01.06.2007 reads as under: [Explanation 5A- Where, in the course of a search initiated under section 132 on or after the 1 st day of June, 2007, the assessee is found to be the owner of- (i) any money, bullion, jewellery or other valuable article or thing (hereinafter in this Explanation referred to as assets) and the assessee claims that such assets have been acquired by him utilizing (wholly or in part) his income for any previous year; or (ii) any income based on any entry in any books of account or other documents or transactions and he claims that such entry in the books of account o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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