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TMI Blog2009 (11) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of income derived from manufacturing of goods and not from trading in the raw wool and knitted cloth. The Assessing Officer also initiated the penalty proceedings under Section 271(1)(c) of the Act for furnishing inaccurate particulars of income in its return with an intention to evade tax. – held that - the ITAT has rightly come to the conclusion that the assessee did not deliberately or consciously concealed the true particulars of income or furnished inaccurate particulars of income. – penalty not to be imposed – decided in favor of assessee - 410 to 412 of 2009 - - - Dated:- 19-11-2009 - MR. S ATIS H KUMAR MITTAL and MR. JUST ICE MEHINDER SINGH SULLAR, JJ. Present: Mr. Rajesh Sethi, Advocate, for the appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty proceedings under Section 271(1)(c) of the Act for furnishing inaccurate particulars of income in its return with an intention to evade tax. 3. The order of the Assessing Officer for not allowing the aforesaid deduction was set aside by the CIT(A), but the ITAT while setting aside the order of the CIT(A) confirmed the order of the Assessing Officer by relying upon the decision dated 17.8.2006 given by this Court in M/s. Liberty India v. Commissioner of Income-Tax, (2007) 293 ITR 520. After the decision of the ITAT, the penalty proceedings were finalized and penalties (Rs.1,50,000/-, Rs.5,50,000/- and Rs.8,00,000/-) under Section 271(1)(c) of the Act were imposed upon the assessee. Aggrieved against the orders of penalties, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have heard the counsel for the appellant and gone through the orders of the ITAT. 5. Learned counsel for the appellant argued that the assessee patently made a wrong claim of deduction of profits earned from trading activities under Section 80 IA of the Act, whereas it was not entitled for the said benefit as per the law laid down by this Court in M/s Liberty India's case (supra) which has been upheld by the Supreme Court in M/s Liberty India vs. Commissioner of Income-Tax, (2009) 317 ITR 218. In these facts, the assessee could not justify the bona-fideness of the claim of deduction under Section 80 IA in its return of income. Learned counsel further argued that the burden was on the assessee to prove that failure to return the correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding, profit and loss account for the manufacturing and trading activities, yet the factum of the assessee having claimed deduction u/s 80 IA was evident from the audit report in form No.10CCB filed along with the return of income. In the assessment order there is no charge against the assessee that it had not disclosed any information or material required to compute the income for the year under consideration. Therefore, it would not be wrong to deduce that so far as the claim of the assessee for deduction u/s 80 IA was concerned, the same was adequately disclosed in the return of income and the accompanying documents." 7. In view of the aforesaid finding, the ITAT while relying upon the decision of the Supreme Court in T.Ashok Pal vs. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing adopted by the Hon'ble Madras High Court as above, the assessee canvassed before the Assessing Officer that the profits in question were eligible for 80 IA benefits. Though the subsequent development in the case of the assessee show that the said view has not found favour with the Income-tax authorities. However, to say that the claim of the assessee made in the return of income was fanciful or was completely untenable, would be a misnomer. Therefore, in our considered opinion, the claim of the assessee made in the return of income could be said to have rested on a bona fide consideration." 9. The aforesaid finding of fact arrived at by the ITAT cannot be said to be perverse or against the material available on the record. When the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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