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TMI Blog2016 (9) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... tion made u/s.80HHC and 80IB of the Act and therefore the submissions for both the years would be common. 3. First, we take up the Assessee's appeal in ITA No.1060/Ahd/2011 for AY 1995-96. 3.1. The relevant facts as culled out from the materials on record are as under:- 3.2. Assessee is a company stated to be engaged in the business of manufacturing of electric furnaces. Assessee filed its return of income for AY 1995-96 on 30/11/1995 declaring total income of Rs. 91,98,630/-. The case was selected for scrutiny and thereafter assessment was framed u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") vide order dated 31/03/1998 and the total income was determined at Rs. 6,85,76,659/- inter-alia by making disallowance/additions aggregating to Rs. 38,18,859/- on the following counts:- (i) Disallowance of bad debts Rs.23,67,090/- (ii) Disallowance u/s.40A(3) Rs. 1,91,802/- (iii) Disallowance of depreciation Rs. 7,30,580/- (iv) Disallowance of entertainment Expenses Rs. 22,418/- (v) Disallowance of deduction u/s.80IA Claimed by assessee Rs. 5113756/- Less: Allowed as per Direction of Tribunal Rs. 4606787/- Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y by order dated 29/07/2011. He placed on record the copy of the aforesaid order. On the merits, he submitted that along with return of income, assessee had filed audited accounts, audit report and other relevant statements and accounts in support of the claim of deduction and during the course of assessment proceedings also all the information and explanations which was called for by the AO were submitted. He further submitted that there is no material on record which could demonstrate that the explanation given by the assessee was false or that the assessee had concealed the particulars of income. He further submitted that mere making of the claim which is not sustainable in law and would not amount to furnishing inaccurate particulars of income and such claim made in the return cannot amount to inaccurate particulars. He therefore submitted that the penalty be deleted. Ld.DR, on the other hand, supported the orders of AO and ld.CIT(A). 4. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. The issue in the present case is with respect to levy of penalty u/s.271(1)(c) of the Act. 4.1. The necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore us, l.dAR has given the reasons and the facts which had resulted into addition. These submissions have not been controverted by the Revenue. Further, there is nothing on record to demonstrate that assessee had filed inaccurate particulars of income or had concealed the particulars of income. We further find that Hon'ble Supreme Court in the case of CIT vs. Reliance Petroproducts Pvt.Ltd. reported at (2010) 322 ITR 158 (SC) held that a mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the return cannot amount to the inaccurate particulars. 4.3. Considering the aforesaid facts and relying on the foresaid judgement of the Hon'ble Apex Court in the case of CIT vs. Reliance Petroproducts Pvt.Ltd.(supra), we are of the view that in the present case no case for levy of penalty u/s. 271(1)(c) of the Act has been made out. We thus direct the deletion of penalty u/s. 271(1)(c) of the Act. Thus, the ground of assessee is allowed. 5. In the result, the appeal of the Assessee in ITA No.1060/Ahd/2011 for AY 1995-96 is allowed. 6. Now, we shall take up the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... precedent that one should avoid the temptation to decide cases, by matching the colour of one case against the colour of another. To decide, therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive. Precedent should be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the side branches else you will find yourself lost in thickets and branches. The path of justice must be clear of obstruction which could impede it. The observations of the Court must be read in the context in which they appear to have been stated. The assessee has placed reliance on the above decisions without discussing, as to how, the factual situation of the present case fits in the fact-situation of the relied upon." Same is the position here In this case. The Id, Counsel has placed reliance on the decisions without discussing, as to how, the factual situation of the present case fits In the fact-situation of the relied upon, The appellant therefore, cannot derive support from the decisions upon by it. 2.3 It is evident from record that the Assessing Officer had Ievied the penalty vide order dated 19.03.2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) for the A.Y. 2003-04 on the ground that the claim was not made by fraud and appellant's explanation was not held to be lacking bonafides and the appellant had disclosed all the relevant facts and material before the Assessing Officer. I do not agree with the aforesaid finding of my predecessor. There Is no necessity to prove fraud in penalty proceedings after the decision of the Hon'ble Supreme Court in the case of UOI vs. Dharmendra Textile Processors CIT 306 1TR 277 (SC). The penalty in the year under consideration had been levied for furnishing Inaccurate particulars of income whereas my predecessor in A.Y. 2003-04 had deleted the penalty considering the inapplicability of Explanation-1. The decisions relied upon have no relevance as the penalty had not been imposed by resorting to the Explanation-1 to sec. 271(1)(c) of the Act. 2.6 The penalty had been levied for furnishing inaccurate particulars of income. Therefore, only thing to be considered Is as to whether the appellant had furnished inaccurate particulars of Income. The Inaccurate particulars had not been defined In the Act. As held by the Hon'ble Supreme Court in the case of CIT vs. Reliance Petroproduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , other income, labour charges income and dividend income were neither derived from the profit of export of goods out of India nor the income of these items derived from the industrial undertaking. Though the income was neither derived from export nor was derived from the industrial undertaking, the appellant was not entitled for the deduction u/s 80HHC and 80-IB of the Act. If these Items of Income are reduced from the gross total income, the resultant figures will be in negative and neither deduction u/s 80HHC nor deduction u/s 80-IB was allowable, Thus, the appellant had claimed the deduction u/s 80HHC and 80-IB of the Act for the sole purpose of reducing Its taxable income and tried to evade the legitimate taxes payable to the exchequer. He had thus claimed the deduction inadmissible in law. Likewise, the appellant had claimed the dividend income as exempt though the appellant was in specific knowledge of the fact that the said income was not exempt. This Intent of the appellant certainly tantamount to furnishing inaccurate particulars of Income, The Assessing Officer had thus rightly levied the penalty on the appellant u/s 271(1)(c) of the Act for furnishing of inaccurate part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Court in the case of CIT vs. Reliance Petroproducts Pvt.Ltd.(supra), we are of the view that in the present case no case for levy of penalty u/s. 271(1)(c) of the Act has been made out. We thus direct the deletion of penalty u/s. 271(1)(c) of the Act. Thus, the ground of assessee is allowed. 7. In the result, the appeal of the Assessee in ITA No.648/Ahd/2011 for AY 2002-03 is allowed. 8. Lastly, we take up the appeal of the Assessee in ITA No.649/Ahd/2011 for AY 2004-05. The Revenue has raised the following grounds of appeal:- 1. The learned Commissioner of Income Tax (Appeals)-VIII, Ahmedabad has erred in law and on facts of the case by confirming the penalty of Rs. 11,99,361/- levied u/s.271(1)(c) of the Income Tax Act, 1961 by Assessing Officer. 8.1. Before us, at the outset, ld.AR submitted that though the appeals of the assessee relate to different assessment years but the facts in the present issue is identical to the facts of AY 2002-03 and the submissions made while arguing the appeal for AY 2002-03 are applicable to the present appeal also. The foresaid submission of ld.AR has not been controverted by ld.DR. 8.2. We have heard the rival submissions and perused the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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