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TMI Blog2017 (1) TMI 888X X X X Extracts X X X X X X X X Extracts X X X X ..... rtificate was based upon any erroneous premises or wrong facts supplied by the assessee. During the course of penalty proceedings, the assessee furnished detailed explanation in this regard and again took help of his argument that the claim u/s 80IB was made relying upon the certificate wherein bifurcation of expenses was made by a professional expert. The AO did not examine the concerned Chartered Accountant during the course of penalty proceedings before rejecting the explanation of the assessee. Nothing was brought on record by the AO to negate the assertion of the assessee that the claim u/s 80-IB was based upon his bona fide belief for making apportionment of expenses in the manner as was done by the assessee. Even otherwise, the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer be restored. 2. During the course of hearing, none appeared on behalf of the assessee. Ld. DR relied upon the order of the AO. 3. The brief background of the case is that the assessee is having manufacturing facility at Daman comprising of 2 units, i.e. Unit I and Unit II. Assessee had shown loss in respect of Unit I whereas claimed deduction u/s 80IB in respect of Unit II. During the assessment proceedings, the AO found that expenses of the units are not proportionate to the production or turnover achieved by each unit. The AO, therefore, re-allocated the total expenses of both the units and reworked the profit of both the units and also re-worked the deduction available u/s 80IB. In this manner, claim of deduction u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee had shown higher turnover of the eligible unit. It was also submitted that the claim of expenses was based upon the allocation done on the basis of certificate obtained from a professional expert i.e. Shri PM Joshi, Chartered Accountant in form 10CCB. Under these circumstances, it can be said that the claim was based upon genuine and bonafide belief of the assessee, more so, when nothing false or bogus has been detected by the revenue. Ld. CIT(A) considered the submissions of the assessee and held that in this case no penalty should have been levied as there was no concealment of income or furnishing of inaccurate particulars of income. The observations made by Ld. CIT(A) are reproduced below:- 5. I have considered the submissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for not imposing penalty. As contented by the representative, Hon'ble Supreme court in the case of CIT vs. Reliance Petro Products Pvt Ltd (322 ITR 158) has recently held that mere making of a claim which is not sustainable in law would not amount to furnishing inaccurate particulars. As contended by the representative, the Hon'ble Chandigarh Bench Tribunal in the case of ACIT vs Arisudana Spinning Mills Ltd (19 DTR 1) held as under: 'Now, the question is as to whether the denial of the claim made in the return of income can lead to an automatic imposition of penalty under section 271(1)(c) of the Act. It is sufficient to say that the assessment proceedings and the subsequent penalty proceedings are independent proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above, it is clear that when the claim of the assessee is based on the opinion of the technical expert including report of C.A. in Form No.1OCCB, No concealment penalty could be imposed. I, therefore, hold that there is no ground for levying penalty regarding apportionment of expenses relating to Unit-I Unit-H. Regarding interest income, it is true that the appellant did riot press the ground before the Hon'ble Tribunal but the necessary and relevant fact s were submitted before the A.O. and the appellant was under the bonafide belief that the interest is assessable under the head business as the receipt of interest was closely linked with the business of the industrial undertaking and in any case the same was certified by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... negate the assertion of the assessee that the claim u/s 80-IB was based upon his bona fide belief for making apportionment of expenses in the manner as was done by the assessee. 6. Even otherwise, the re-allocation exercise done by the AO would also involve some kind of guess work which cannot be said to be purely scientific or devoid of any flaws. If the allocation done by the assessee was not precise and correct as per facts of the case, then, it can also not be said that the re-allocation exercise done by the AO was free from any doubts or ifs and buts. Thus, it is a case where the hypothesis of there being a concealment of income and there not being concealment of income are equal. Under these circumstances, in our considered opinio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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