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TMI Blog2018 (3) TMI 1342X X X X Extracts X X X X X X X X Extracts X X X X ..... Act on the claim of levy encashment, which actually is allowable in AY 2009-10 instead of 2008-09. For this Revenue has raised the following ground No. 1 "1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in deleting the penalty order passed by the AO under section 271(1)(c) of the Income Tax Act, 1961 imposing penalty of Rs. 64,18,672/-" 3. Briefly stated facts are that during the year under consideration, the assessee filed is return of income declaring Loss of Rs. 8,47,58,4981- under the normal provisions and Book Loss of Rs. 11,96,334/- under section 115JB of the Act. The assessee in its return of income based on Tax Audit Report had claimed deduction of provision for leave encashment of Rs. 2,85,39 770/- which was allowed by the AO in the regular assessment u/s.143(3) of the Act determining total Loss at Rs. 96,03,498/- under normal provisions and Rs. 11,96,334/- under section 115JB of the Act. The Assessment was re-opened u/s 148 of the Act re-assessment order was passed determining the total income at Rs. 92,80,502/- under normal provisions and Loss of Rs. 11,96,334/- u/s 115JB of the Act. In the reassessment order the AO disallowed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancelled the penalty order. The facts in the present case are similar and therefore respectfully following the decision of Hon'ble Jurisdictional ITAT in the case or of Rama Newspaper and Paper Ltd Vs DCII (Supra), the penalty order is hereby cancelled." Aggrieved, revenue is in second appeal before Tribunal. 6. We have heard rival contentions and gone through facts and circumstances of the case. Before the Ld Sr. DR argued that merely because the assessee complied with statutory procedural requirements of filing of prescribed forms and certificates of chartered accountant and audit reports, it could not absolve assessee of its liability, if act of or attempt in claiming deduction was not bonafide. According to him, the assessee had made a wrong claim which cannot be allowed in the relevant assessment year and by making a claim in this year the assessee has furnished inaccurate particulars of income. According to him, in the original return of income the assessee failed to produce the details with regards to provisions made and the treatment given in the books of account, the fact was revealed during reassessment proceedings only. According to him, it clearly shows that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04.2007. The auditor had accordingly certified that the same as allowable since it is reversal of provision and credited to leave encashment expenditure account in Annexure No 4 to Form 3CD annexed to the audit report furnished u/s.44AB of the Act. The above claim was based on the actuarial valuation report obtained as on 31.03.2008 whereby the leave encashment liability which had accrued on 31.03.2008 is determined at Rs. 3,00,09,000/-. Accordingly, provision for the liability was created in the Books of accounts on 31.03.2008 for Rs. 3,00,09,000/-. The above claim for provision was duly verified and allowed by the AO in the order uls.143(3) of the Act. However, subsequently the AO has passed an order u/s143(3) r.w.s.147 of the Act and hold that the liability towards leave encashment of Rs. 1,88,84,000/- existed from 01.04.2007 (i.e was carried forward from F.Y. 2006-2007) and the payment was made on 30.09.2008. Therefore, the same were not allowable in the year under consideration as per the provisions of section 43B of the Act. However, the AO in the order u/s143(3) r.w.s. 147 has stated that, "Thus, according to provisions of section 43B deduction for such payment can be allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted position in the assessee's case that no information given by the assessee with respect to claim made found to be incorrect or inaccurate. It is also not the case that any statement made or any details supplied were found to be factually incorrect. Therefore, it cannot be held guilty of furnishing inaccurate particulars of income. The word 'inaccurate' has been defined as not accurate, not exact or correct; not according to truth. The reading of the word 'inaccurate' and 'particulars' in conjunction, they must mean the details supplied by the assessee are not correct. We find that in its case there is no finding that any details supplied by the assessee were found to be incorrect or erroneous or false. Such not being the case, the assessee cannot be put to question for levying the penalty u/s 271(1)(c)(1)(c) of the Act and mere making of a claim which is not sustainable in law, by itself, shall not amount to furnishing inaccurate particulars of the income. Claim made by the assessee in itself cannot amount to the inaccurate particulars of the Income. The reliance placed by the assessee on the case of Hon'ble Supreme Court in the case of CIT v Reliance Petroproducts Pvt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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