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TMI Blog2018 (4) TMI 1352X X X X Extracts X X X X X X X X Extracts X X X X ..... gards the balance amount of ₹ 47,053/-, Learned Counsel for the Assessee did not make further submissions considering it to be a small amount. This part of ground is accordingly dismissed. Levy of penalty u/s 271(1)(c) - Held that:- In the penalty order the A.O. did not specify which limb of Section 271(1)(c) penalty have been levied i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. It is well settled that penalty is not automatic and need not be imposed in each and every case. The facts and circumstances shall have to be considered. Considering all it is not a fit case of levy of penalty. - Decided in favour of assessee. - ITA.No.5547/Del./2012, C.O.No.95/Del./2013 And ITA.No.6030/Del./2015 - - - Dated:- 24-4-2018 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER For The Assessee : Shri Ved Jain, Advocate And Shri Ashok Goel, C.A. For The Revenue : Shri S.R. Senapati, Sr. D.R. ORDER PER BHAVNESH SAINI, J.M. This Order shall dispose of all the above matters pertaining to the same assessee for the same assessment year. 2. We have heard the learned Repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s subject to the sunset clause. If in a year there is no profit, the question of actual allowance of exemption under section 10B would not arise. The assessee-company has began function/commence commercial production from the A.Y. 2002-2003 and it had profit in A.Ys. 2004-05, 2006-07 and 2007-08 and loss in earlier years i.e., 2002-03, 2003-04 and 2005-06. 5.2. The Ld. CIT(A) noted that assessee has filed declaration under section 10B(8) in earlier year that it would not avail deduction under section 10B of the I.T. Act, therefore, it apply to the assessment year under appeal as well. Accordingly, this ground of appeal assessee were dismissed. 6. Learned Counsel for the Assessee submitted that issue of filing declaration under section 10B(8) came up for consideration in succeeding years in which Ld. CIT(A) allowed the claim of assessee by holding that declaration made by assessee under section 10B(8) of the Act is in respect of the year in which declaration is made by the assessee and not for the subsequent year. Reliance was placed upon the decision of ITAT, Delhi Bench in the case of Legato Systems India (P) Ltd., vs. ITO (2005) 2 SOT 719 (Del.) which is confirmed by the Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessee were dismissed. 9. The Learned Counsel for the Assessee submitted that out of the total addition of ₹ 2,66,614/-, A.O. made addition of ₹ 2,19,561/- on account of interest expenditure debited to the P L A/c and ₹ 47,053/- on account of half percent of the average value of investments. As regards the addition of ₹ 2,19,561/-, Learned Counsel for the Assessee submitted that own funds of the assessee-company are more than the investment made by assessee. Therefore, disallowance of interest under section 14A is not called for. He has submitted that investment made by assessee is of ₹ 94,21,879/-. However, the share capital of assessee has been ₹ 5.01 crore and equity shares of ₹ 94,21,879. He has submitted that it is well settled that as assessee was having own funds which were more than the investment made, therefore, no disallowance under section 14A is sustainable. In support of the contention, he has relied upon the decision of ITAT, Delhi Bench in the case of Gagan Goyal dated 2nd August, 2016 and decision of the Punjab Haryana High Court in the case of CIT vs. Max India Ltd., dated 6th September, 2016. 10. On the ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee under section 10B was rejected. A.O. applied Explanation-1 to Section 271(1)(c) of the I.T. Act and noted that only few percentage of returns are taken-up for scrutiny and in case, assessment had not been taken-up for scrutiny assessment, the amounts would not be subjected to the addition. He has relied upon the decision of Hon ble Delhi High Court in the case of CIT vs. Zoom Communication Pvt. Ltd., 327 ITR 510 and held that assessee has concealed as also furnished inaccurate particulars of income, therefore, penalty under section 271(1)(c) was levied on the addition made on account of denial of deduction under section 10B of the I.T. Act. The assessee challenged the penalty order before the Ld. CIT(A). The written submissions of the assessee is reproduced in the appellate order. The Ld. CIT(A), however, dismissed the appeal of assessee. 15. Learned Counsel for the Assessee submitted that assessee in the original return of income did not claim deduction under section 10B of the I.T. Act and declared all the particulars. In the revised return, assessee made claim of deduction under section 10B of the I.T. Act and disclosed all the particulars of income. The claim of assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come of the assessee. Such claim made in the return cannot amount to furnishing inaccurate particulars of income. As the assessee has furnished all the details of its expenditure as well as income in its return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the authorities to accept its claim in the return or not. Merely, because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, in our opinion, attract the penalty u/sec. 271(1)(c). If we accept the contention of the Revenue then in case of every return where the claim made is not accepted by the Assessing Officer for any reason, the assessee will invite penalty u/sec. 271(1)(c). That is clearly not the intendment of the Legislature . 17.1. It may also be noted here that in the assessment order, A.O. while initiating the penalty proceedings has noted that he is satisfied that assessee has furnished inaccurate particulars of its income and has concealed its correct income on this issue. However, in the penalty order, the A.O. has relied upon the Explanatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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