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TMI Blog2016 (4) TMI 577X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revenue : Shri Sujit Kumar, Senior DR ORDER PER A.T. VARKEY, JUDICIAL MEMBER : These appeals, at the instance of the assessee, are filed against the order of CIT (Appeal)-XVII, New Delhi dated 07.02.2011 for the assessment years 2002-03 and 2003-04. 2. The grounds of appeal taken by the assessee are as under :- 1. On the facts and circumstances of the case and in law, the order under section 250(6) passed by the Commissioner of Income-tax (Appeals), XVII [ CIT(A) ], is bad in law and void-ab-initio. 2. On the facts and circumstances of the case and in law, the CIT(A) has erred in confirming the penalty levied by Assistant Commissioner of Income-tax, Circle 14(1), New Delhi ( AO ) under section 271(1)(c) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are that the AO made an addition of ₹ 1,43,53,512/- on account of transfer pricing adjustment and also made disallowance of ₹ 2,00,000/- u/s 14A. The assessee filed an appeal before the CIT(A) who in turn has confirmed the addition of ₹ 1,38,94,980/-and allowed the relief of ₹ 4,58,5321-. The CIT(A) held that the extension of the loan were nothing but debt simplicitor and that the debt was a short term working capital loan repayable on demand. Being repayable on demand, it would mean that the loan is re-negotiated on an annual basis. The assessee preferred an appeal before the Tribunal and the Tribunal vide order dated 30.10.2009 dismissed the appeal of the assessee and decided the issue in the favour of the revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and found unacceptable. The assessee contended that penalty for concealment of income cannot be imposed if the assessee proves that the price charged or paid in international transactions has been determined in accordance with section 92C in good faith and with due diligence. The assessee further submitted the penalty proceedings and assessment proceedings are independent proceedings and findings in assessment proceedings alone are not material and may not justify the imposition of penalty in a given case. The assessee contended that it neither failed to offer explanation nor the explanation given by the assessee was found to be false. The assessee submitted that since in terms of Explanation 1 to Sec. 271(1)(c) of the Act the claim of ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f K. P. Madhusudan vs. CIT 2511TR 99 and in the case of Union of India vs. Dharmendra Textile Processors (2008) 174 Taxman 571, it is on assessee to prove that he has not concealed or furnished inaccurate particulars of his income. In the case of Union of India vs. Dharmendra Textile Processors(Supra) the Hon'ble Court held that the Explanation appended to section 271(1)(c) entirely indicate the element of strict liability on the assessee for concealment or for giving inaccurate particulars of income while filling return. The Hon'ble Court held that the penalty in that section is a civil liability. Willful concealment is not an essential ingredient for attracting civil liability, as is the case in the matter of prosecution under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of law, that itself shows that the subject matter in issue was debatable and accordingly, no penalty can be levied on the assessee. 8.1 According to ld. AR, it is well settled that penalty cannot be imposed on debatable issues and relied on the decision of the Hon ble High Court of Delhi in CIT vs. Electrolux Kelvenator Ltd. 357 ITR 665 (Del) and CIT vs. Jaswinder Singh Ahuja 351ITR262(Del.) 9. Ld. DR for the revenue does not want us to interfere in the order of the authorities below and relied on their orders. 10. We have heard both the parties and perused the records. It is well settled that the finding in the assessment proceedings alone cannot be the sole basis to justify the imposition of penalty. Transfer pricing at the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustaining the adjustment on account of arm s length price in respect of interest free loans provided by the appellant to its wholly owned foreign subsidiaries? (2) If the answer to question No.1 is in the negative, whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal erred in law in not holding that +/-5% variation from the arm s length interest should have been allowed to the applicant in terms of the provisions of Section 92C (2) of the Income Tax Act, 1961? 10.4 We take note that in the case of Liquid Investment: ITA 240 of 2009, the Hon'ble jurisdictional Delhi High Court deleted the penalty levied by the assessing officer on the ground that the substantive appeal (being appeal under section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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