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TMI Blog2009 (11) TMI 1004X X X X Extracts X X X X X X X X Extracts X X X X ..... ed return of income showing total income at ₹ 2,18,37,780/- on 31.03.2003. The revised return was furnished with a view to re-compute the deduction under sections 80IA and 80HHC as under :- As per original return As per revised return Deduction u/s. 80IA Rs.1,45,40,698/- Rs.1,01,13,610/- Deduction u/s. 80HHC Rs.3,86,07,038/- Rs.3,14,70,845/- 4. The A.O. framed the assessment under section 143(3) on 08.03.2006 computing the total income at ₹ 2,18,37,780/-. In this assessment order, the A.O. also initiated penalty proceedings under section 271(1)(c) for furnishing inaccurate particulars of income. Subsequently vide order dated 22.03.2006, the A.O. levied the penalty of ₹ 45,73,277/- @ 100% of tax sought to be evaded in furnishing inaccurate particulars of income to the tune of ₹ 1,15,63,281/- under section 271(1)(c) of the Income Tax Act, 1961. 5. Against the order of A.O. in levying penalty under section 271(1)(c) of the I.T. Act, the assessee preferred appeal before the Learned Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of deduction u/s.80HHC and 80IA. The appellant submits that merely on account of the mistake no penalty can be levied. The appellant further submits that the interpretation of provisions of sections 80HHC and 80IA had come before the Hon'ble Income-tax Appellate Tribunal and a view has been taken by the Appellate Tribunal in the following cases where assessee is entitled to deduction u/s. 80HHC. 2.3. The appellant submits that under the circumstances its contention as per the original return have been accepted by the Appellate Tribunal. The appellant submits that under the circumstances income stands assessed higher amount and the claim made by the appellant as per the original return were correct as per the provisions of law. The appellant further submits that under the circumstances the question of any concealment of income, the question of furnishing inaccurate particulars does not arise. The appellant also submits vehemently that each and every particular placed on the records of the assessing officer was accurate and each and every particular was correctly furnished The assessing officer has merely made observation regarding default on the part of the appellant w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 1,02,74,500/-. The ld. counsel of the assessee further submitted that substantial controversy was in the matter of computation of deduction under sections 80HHC and 80IA and a view was expressed that provision of section 80IA(9) would not prejudice or curtail relief admissible to an assessee under section 80HHC. The interpretation of these two provisions, i.e. under sections 80HHC and 80I, had come before the ITAT and a view has been taken by the Appellate Tribunal in the following cases when an assessee is entitled to deduction under section 80HHC :- (i) Vijay Industries vs.- ITO [112 TTJ 353 (JP) (ii) CIT vs.- Raju Eng. Ltd. [284 ITR 119(Rajkot ITAT)] (iii) Shree Ram Food Industries vs.- CIT (Ahd. ITA No.705/RJT/2005) (iv) SCH Creations vs.- Asst. CIT [304 ITR 319] It was also submitted by the ld. counsel of the assessee that on 06.05.2008, the Hon'ble Madras High Court in the case of SCM Creations reported in 304 ITR 310 has taken a view that relief under section 80IA of the Income Tax Act, 1961 should not be deducted from profits and gains of the business on which relief under section 80HHC of the Act is to be computed. In view of this, it cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O. We, therefore, decline to interfere. 10. Now we come to the Cross Objection being No. 67/AHD/2007 arising out of the ITA No. 477/AHD/2007 filed by the assessee for the assessment year 2001-02. The various grounds of C.O. are in support of the order of Learned Commissioner of Income Tax(Appeals) cancelling the penalty of ₹ 45,73,277/- levied by the A.O. under section 271(1)(c) of the I.T. Act, 1961. 11. In view of our decision above in Revenue s appeal, i.e. ITA No. 477/AHD/2007 (supra), the Cross Objection filed by the assessee is rendered infructuous, therefore, the same is dismissed. 12. Now we come to the ITA No. 478/AHD/2007 for the assessment year 2003-04. The only ground of appeal raised by the Revenue is that the Learned Commissioner of Income Tax(Appeals) erred in deleting the addition of ₹ 35,50,506/-, being the difference in value of stock as per book and that declared to Bank, which was made as the assessee failed to produce evidences like sales bills and other documents to prove that the value of stock given in Bank statement was arrived at by adopting market value as on 31.03.2003. 13. At the time of hearing, the ld. D.R. for the Revenue fai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that found in the declaration to the bank and treated the same as income from undisclosed sources. The assessee had contended that the value of the stocks as stated by him in the declaration given to the bank was inflated, that he had not suppressed the value of stock, and that there was no income from undisclosed sources The Appellate Assistant Commissioner to whom the assesses appealed, reduced the amount of the addition from ₹ 34,070/- to ₹ 26,000/-. On appeal to the Tribunal, the Tribunal deleted the addition. On a reference :- Held, that the Tribunal had accepted the explanation of the assessee. The Tribunal had exercised its jurisdiction and the question decided by it was a question of fact. Therefore, there was no scope for interference with the order of the Tribunal . The decision of the Hon'ble Madras High Court, which is relied by the Learned Commissioner of Income Tax(Appeals), is squarely applicable to the facts of assessee s case. Therefore, we inclined to uphold the order of Learned Commissioner of Income Tax(Appeals) and reject this ground of appeal of Revenue. 15. Now we come to the Cross Objection being No. 68/AHD/2007 arising out o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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