The ACIT, Circle-2,, RAJKOT-GUJARAT v. M/s Friends Land Development Co.,, RAJKOT-GUJARAT

ITA 1208/RJT/2010 | 2005-2006
Pronouncement Date: 25-11-2011 | Result: Dismissed

Appeal Details

RSA Number 120824914 RSA 2010
Assessee PAN AAAFF4174E
Bench Rajkot
Appeal Number ITA 1208/RJT/2010
Duration Of Justice 1 year(s) 1 month(s) 19 day(s)
Appellant The ACIT, Circle-2,, RAJKOT-GUJARAT
Respondent M/s Friends Land Development Co.,, RAJKOT-GUJARAT
Appeal Type Income Tax Appeal
Pronouncement Date 25-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 25-11-2011
Date Of Final Hearing 16-05-2011
Next Hearing Date 16-05-2011
Assessment Year 2005-2006
Appeal Filed On 06-10-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH RAJKOT BEFORE SHRI T.K. SHARMA (JM) AND SHRI A.L. GEHLOT ( AM) I.T.A. NO.1208/RJT/2010 (ASSESSMENT YEAR 2005-06) ACIT CIR.2 VS M/S FRIENDS LAND RAJKOT DEVELOPMENT CO PRASHAM 3 RD FLOOR NR. DHARAM CINEMA OPP. MOHANBHAI HALL KASTURBA GANDHI ROAD RAJKOT PAN : AAAFF4174E (APPELLANT) (RESPONDENT) DATE OF HEARING : 11-11-2011 DATE OF PRONOUNCEMENT : 25-11-2011 REVENUE BY : SHRI VILAS V SHINDE ASSESSEE BY : SHRI JC RANPURA O R D E R PER T.K. SHARMA (JM) THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 23-07-2010 PASSED BY THE CIT(A)-III RAJKOT CANCELING PENALTY OF RS.12 13 708 LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT FOR THE ASSESSMENT YEAR 2005-06. 2. BRIEFLY STATED THE FACTS ARE THAT WHILE PASSING THE ASSESSMENT ORDER U/S 143(3) OF THE ACT ON 28-12-2007 ASSESSING OFFICER M ADE ADDITION OF RS. 84 17 839 WHICH INCLUDED DISALLOWANCE OF RS. 83 12 839 U/S 80IB OF THE ACT AND ON ACCOUNT F TDS TO THE TUNE OF RS.1 05 000. ON AP PEAL THE LD.CIT(A) VIDE ORDER DATED 28-11-2008 DIRECTED THE ASSESSING OFFICER TO ALLOW DEDUCTION U/S 80IB(10) ITA NO.1208/RJT/2010 2 IN RESPECT OF PROFIT ON SALE OF 17 RESIDENTIAL UNIT S WHERE THE BUILT UP AREA IS LESS THAN 1500 SQ.FT. THE ASSESSING OFFICER WORKED OUT SUCH DEDUCTION AMOUNTING TO RS.33 16 822 AND BALANCE AMOUNT OF RS. 49 96 017 WA S TREATED AS NOT ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT. SUBSEQUENTL Y THE ASSESSING OFFICER IN RESPECT OF DISALLOWANCE OF DISALLOWANCE CONFIRMED BY THE CIT(A) TO THE EXTENT OF RS. 33 16 822 HAS LEVIED PENALTY OF RS. 12 13 708 U /S 271(1)(C) OF THE ACT WHICH IS 100% OF TAX SOUGHT TO BE EVADED ON EXCESS DEDUCT ION CLAIMED U/S 80IB(10) OF THE ACT. 3. ON APPEAL BEFORE THE LD.CIT(A) ASSESSEE CONTEND ED THAT VALUATION MADE IN RESPECT OF DEDUCTION U/S 80IB(10) WAS ON ACCOUNT OF MERE CHANGE OF OPINION AND THAT NOT DUE TO FURNISHING OF INACCURATE PARTIC ULARS OF INCOME. IT WAS ALSO CONTENDED THAT ALL THE RELEVANT FACTS WERE FURNISHE D DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND NOTHING WAS KEPT BEHIND. THE CLAIM OF DEDUCTION WAS ALSO EVIDENT FROM COMPUTATION OF INCOME ATTACHE D WITH THE RETURN OF INCOME WHICH WAS DULY SUPPORTED BY AUDIT REPORT IN FORM NO .10CCB. THEREFORE IT CANNOT BE SAID THAT ASSESSEEE HAS CONCEALED OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME. RELIANCE WAS ALSO PLACED ON THE FOLLOWING CASE LAWS: CIT VS SHIV LAL DESAI & SONS 114 ITR 377 (BOM) J.K. JAJOO VS CIT 181 ITR 410 (MP) CEMENT MARKETING C OF INDIA LTD VS ASSTT.CST 124 I TR 15 (SC) CIT VS HARSHVARDHAN CHEMICALSD & MINERALS LTD 259 ITR 212 (RAJ) ITA NO.1208/RJT/2010 3 IMPULSE INDIA (P) LTD VS ITO 40 ITD 36 (DEL) ON THE STRENGTH OF RATIO OF AFORESAID CASE LAWS IT WAS CONTENDED THAT PENALTY LEVIED BY THE ASSESSING OFFICER IS UNJUSTIFIED AND DESERVES TO BE DELETED. AFTER CONSIDERING THE AFORESAID SUBMISSIONS IN THE IMPUG NED ORDER THE LD.CIT(A) CANCELLED THE PENALTY FR THE DETAILED REASONS GIVEN AT PARAGRAPHS 3.2 TO 3.9 WHICH ARE AS UNDER: 3.2 I HAVE CAREFULLY CONSIDERED THE FINDING GIVEN BY THE ASSESSING OFFICER AND THE SUBMISSION OF THE AR OF T HE APPELLANT. IN THE INSTANT CASE THE ADDITION U/S 80IB OF THE ACT AMOUNTING TO RS.8312839/- WAS MADE BY THE ASSESSING OFFICER. TH E CIT(A) VIDE ORDER DATED 28-11-2008 HAS DIRECTED THE ASSESSING O FFICER TO ALLOW DEDUCTION UNDER SECTION 80IB(10) IN RESPECT OF PROF IT ON SALE OF 17 RESIDENTIAL UNITS WHERE THE BUILT UP AREA IS LESS T HAN 1500 SQ.FEET. ACCORDINGLY THE ASSESSING OFFICER WORKED OUT SUCH DEDUCTION AMOUNTING TO RS.3316822/- WHILE GIVING EFFECT TO TH E CIT(A)S ORDER AND BALANCE MOUNT OF RS.4996017/- WAS TREATED AS NO T ELIGIBLE FOR CLAIM U/S 80IB OF THE ACT. THE HONBLE ITAT VIDE O RDER DATED 19-3- 2010 IN ITA NOS.86 & 91/R/09 UPHELD THE ORDER OF TH E CIT(A). THE ASSESSING OFFICER MADE THE ADDITION BUT THERE IS N OTHING ON RECORD TO SHOW THAT THERE HAS BEEN ANY CONCEALMENT F INCOM E. THE ISSUE OF PENALTY U/S 271(1)(C) HAS BEEN CONSIDERED AND DE CIDED BY THE LARGER BENCH OF THE SUPREME COURT AND ITS DECISION HAS BEEN REPORTED ASW UNION OF INDIA & ORS VS DHARAMENDRA TE XTILE PROCESSORS & ORS (2008) 306 ITR 277 (SC). BY TIS L ARGER BENCH DECISION THE EARLIER DECISION IN THE CASE OF DILIP N SHROFF (SUPRA) WAS SPECIFICALLY DISAPPROVED. SINCE IN THE DECISIO N IN THE CASE OF T. ASHOK PAI (SUPRA) THE SUPREME COURT HAD RELIED UPON THE DECISION IN THE CASE OF DILIP N SHROFF (BOTH DELIVE RED ON THE SAME DATE) AS ALSO ON THE DECISION IN THE CASE OF VIRTUA L SOFT SYSTEMS LTD VS. CIT (2007) 289 ITR 83 (SC) WHICH HAS SINCE BEEN SPECIFICALLY OVERRULED IN THE SUBSEQUENT DECISION IN THE CASE OF CIT VS GOLD COIN HEALTH FOOD P LTD (2008) 304 ITR 308 (SC) (DIS CUSSED POST) THE DECISION IN THE CASE OF T. ASHOK PAI (SUPRA) IS ALSO IMPLIED DISAPPROVED. IN REGARD TO PENALTY U/S 271(1)(C) T HE SUPREME COURT IN THIS LARGER BENCH DECISION HAS OBSERVED AS UNDER : ITA NO.1208/RJT/2010 4 THE EXPLANATION APPENDED TO SECTION 271(1)(C) OF TH E I.T. ACT ENTIRELY INDICATE THE ELEMENT OF STRICT LIABILI TY ON THE ASSESSEE FOR CONCEALMENT OR FOR GIVING INACCURATE PARTICULARS WHILE FILING THE RETURN. THE JUDGMENT IN DILIP N SHROFFS CASE [2007] 8 SCALE 304 (SC) [291 ITR 519 (SC)] HAS NOT CONSIDERED THE EFFECT AND RELEVANCE OF SECT ION 276C OF THE I.T. ACT. THE OBJECT BEHIND THE ENACTM ENT OF SECTION 271(1)(C) READ WITH THE EXPLANATIONS INDICA TES THAT THE SAID SECTION HAS BEEN ENACTED TO PROVIDE FOR A REMEDY FOR LOSS OF REVENUE. THE PENALTY UNDER THAT PROVIS ION IS A CIVIL LIABILITY. WILLFUL CONCEALMENT IS NOT AN ESS ENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY AS IS THE CASE IN THE MATTER OF PROSECUTION U/S 2766C OF THE I.T. ACT. ( P. 302 OF 306 ITR). THUS THE LAW REGARDING MENS REA U/S 271(1)(C) IS N OW SETTLED BY THE LARGER BENCH OF THE SUPREME COURT IN FAVOUR OF REVENUE. THE PRINCIPLE ENUNCIATED IN THIS DECISION IS THAT EXPLA NATION 1 TO SECTION 271(1)(C) CREATED A STRICT LIABILITY ON THE ASSESSE E THAT THE PENALTY U/S 271(1)(C) IS A CIVIL LIABILITY WHICH PROVIDES A REMEDY FOR LOSS OF REVENUE AND HENCE WILLFUL CONCEALMENT OR MENS REA I S NOT AN ESSENTIAL INGREDIENT FOR THIS PENALTY AS WELL AS TH E PENALTY U/S 11AC OF THE CENTRAL EXCISE ACT WHICH PROVIDES FOR PENAL TY IN CASES OF FRAUD COLLUSION OR ANY WILLFUL MISSTATEMENT OR SU PPRESSION F FACTS AS ALSO IN CASES OF CONTRAVENTION OF ANY OF THE PRO VISIONS OF THE CENTRAL EXCISE ACT OR F THE RULES MADE THEREUNDER W ITH INTENT TO EVADE PAYMENT OF DUTY. IT IS A VITAL DEVELOPMENT. IT IS A MARKED DEPARTURE FROM THE EARLIER CASES HOLDING THE PENALT Y PROCEEDINGS U/S 271(1)(C) AS QUASI-CRIMINAL PROCEEDINGS. THUS IN THE VIEW THAT PREVAILS THE RATIO F THE LANDMARK DECISION IN THE CASED OF CIT VS ANWAR ALI (1970) 76 ITR 696 (SC) DOES NOT HOLD GOOD AFTER THE INSERTION OF THE EXPLANATION. THE RATIO OF ANOTHER OFT-QUOTED DECISION IN THE CASE OF HINDUSTAN STEELS LTD VS. ST ATE OF ORISSA (1972) 83 ITR 26 (SUPREME COURT) WHICH WAS RELIED UPON IN THE CASE OF DILIP N SHROFF (SUPRA) IS ALSO NO LONGER R ELEVANT FOR PENALTY U/S 271(1)(C). IN THIS CASE DEALING WITH THE ORISS A SALES TAX ACT IT WAS HELD THAT WHEN THE DEFAULT WAS ONLY TECHNICAL O R VENIAL IN NATURE IN THE SENSE THAT IT AROSE FROM A BONA FIDE BELIEF REGARDING A PARTICULAR INTERPRETATION OF LAW NO PENALTY WAS LE VIABLE WHEN THE SAID INTERPRETATION WAS FOUND TO BE UNSUSTAINABLE. 3.3 THE RESULT IS THAT IN CASE OF ANY ADDITION OR D ISALLOWANCE THE PENALTY WILL FOLLOW AS A MATTER OF COURSE UNLESS TH E ASSESSEE PROVES THE INGREDIENTS LAID DOWN IN EXPLANATION 1. THUS IT IS CLEAR THAT NOW LAW HAS BEEN SETTLED DOWN AND WHAT MATTES IS THAT IN CASE OF ANY ADDITION OR DISALLOWANCE THE PENALTY WILL F OLLOW AS A MATTER ITA NO.1208/RJT/2010 5 OF COURSE UNLESS THE APPELLANT PROVES THE INGREDIEN TS LAID DOWN IN EXPLANATION 1. THE EXPLANATION 1 TO SECTION 271(1) (C) READS AS UNDER: EXPLANATION 1.- WHERE IN RESPECT F ANY FACTS MATER IAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT - (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OF FERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) OR THE COMMISSIONER TO BE FA LSE OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS N OT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATI ON IS BONAFIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MAT ERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM THEN THE AMOUNT ADDED OR DISALLOWED IN COMPUTING T HE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL FOR THE P URPOSES OF CLAUSE (C) OF THIS SUB-SECTION BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. 3.4 THE EXPLANATION OFFERED BY THE APPELLANT BEFORE THE ASSESSING OFFICER AND BEFORE ME THAT THE ASSESSING OFFICER LEVIED PENALTY MERELY ON THE GROUND THAT THE ADDITION / DI SALLOWANCE WAS MADE BUT NO REASONS WERE GIVEN AS TO WHY THE ADDIT ION SHOULD ALSO BE LIABLE FOR PENALTY. THE VARIATION MADE IN THE DEDUCTION CLAIMED U/S 80IB(10) OF THE ACT WAS ON ACCOUNT F ME RE CHANGE OF OPINION AND NOT DUE TO FURNISHING INACCURATE PARTIC ULARS OF INCOME. 3.5 AFTER INTRODUCTION OF EXPLN.1 TO SECTION 271(1) (C) THE ONUS TO PROVE THAT CONCEALMENT PENALTY IS NOT LIABLE TO BE IMPOSED HAD BEEN SHIFTED TO THE APPELLANT. BUT ONCE THE APPELL ANTS CONTENTIONS ARE FOUND TO BE PRIMA-FACIE ACCEPTABLE AND THE APPE LLANT HAS GIVEN BONA FIDE EXPLANATION THEN NO PENALTY U/S 271(1)(C ) CAN BE VALIDLY IMPOSED. 3.6 THE HONBLE ITAT PUNE BENCH IN THE CASE OF KANB AY SOFTWARE VS DCIT ITA NO.300/PN/07 HAS DISCUSSED T HIS ISSUE IN DETAIL AS UNDER: AN ASSESSEES STATUTORY OBLIGATION U/S 139(1) IS T O GIVE CORRECT AND COMPLETE INFORMATION WITH THE RETURN OF INCOME. IF THIS IS COMPLIED WITH THEN THERE IS NO CONTRAVENTION WHICH CAN ATTRACT EVEN A CIVIL LIABIL ITY. THE FACT THAT ADDITIONS AND DISALLOWANCES ARE MADE BY T HE AO DOES NOT MEAN THAT THERE IS A BREACH OF THE OBLIGAT ION. ITA NO.1208/RJT/2010 6 THE PROPOSITION THAT JUST BECAUSE PENALTY U/S 271(1 )(C) IS NOT A CIVIL LIABILITY IT MUST MEAN THE PENALTY CAN AUTOMATICALLY BE LEVIED ON THE BASIS OF ANY ADDITIO N TO INCOME IS NOT CORRECT. ACCORDINGLY DHARMENDRA TEXTILE IS NOT AN AUTH ORITY FOR THE PROPOSITION THAT PENALTY IS AN AUTOMATIC CONSEQUENCES OF AN ADDITION BEING MADE TO THER INCO ME OF THE TAXPAYER FOR THE REASON THAT WHETHER IT IS A CIVIL LIABILITY OR A CRIMINAL LIABILITY PENALTY CAN ONLY COME INTO PLAY WHEN THE CONDITIONS ARE SATISFIED. EVEN EXPL. 1 TO S.271(1)(C) RAISES A REBUTTABLE PRESUMPTION AND SHI FTS THE ONUS ON THE ASSESSEE TO ESTABLISH THE BONA FIDES OF THE CLAIM. THERE CAN BE THREE DISTINCT MUTUALLY EXCLUSIVE SITUATIONS IN CASE OF AN ADDITION TO INCOME: (A) WH ERE THE ADDITION IS ON ACCOUNT OF CONTUMACIOUS CONDUCT OF T HE ASSESSEE AND MENS REA IS ESTABLISHED; (B) WHERE IT CAN NEITHER BE ESTABLISHED THAT THE ADDITION IS ON ACCO UNT OF CONTUMACIOUS CONDUCT OF THE ASSESSEE NOR IS IT ESTABLISHED THAT THE ASSESSEES CONDUCT AND EXPLANA TION IS BONAFIDE; (C) WHERE IT IS ESTABLISHED THAT THE A SSESSEES CONDUCT AND EXPLANATION IS BONAFIDE. IN SITUATION (A) PENALTY WAS ALWAYS LEVIABLE. IN SITUATION (C) PEN ALTY WAS NEVER LEVIABLE. IN SITUATION (B) UNDER DILIP SHRO FF PENALTY WOULD NOT HAVE BEEN LEVIABLE SINCE THE ONUS OF ESTABLISHING MENS REA COULD NOT HAVE BEEN DISCHARGE D BY THE AO. HOWEVER PURSUANT TO DHARMENDRA TEXTILE P ENALTY IN SUCH A CASE WILL BE LEVIABLE SINCE IT IS NOT NEC ESSARY FOR THE AO TO ESTABLISH MENS REA. THAT IS THE AREA IN WHICH LEGAL POSITION HAS CHANGED. THE EXPRESSION CONCEALMENT OF INCOME E IMPLIE S THAT AN INCOME IS BEING HIDDEN CAMOUFLAGED OR COVERED UP SO AS IT CANNOT BE SEEN FOUND OBSERVED OR DISCOVERED . THE EXPRESSION FURNISHING OF INACCURATE PARTICULARS OF INCOME IMPLIES FURNISHING OF DETAILS OR INFORMATIO N ABOUT INCOME WHICH ARE NOT IN CONFORMITY WITH THE FACTS O R TRUTH. IT DOES NOT EXTEND TO SUBJECTIVE AREAS SUCH AS THE TAXABILITY OF INCOME ADMISSIBILITY OF A DEDUCTION AND INTERPRETATION OF LAW. THE MAKING OF AN INCORRECT CLAIM DOES NOT AMOUNT TO FURNISHING INACCURATE PARTICULAR S. THE DEEMING FICTION OF EXPL.1 TO S.271(1)(C) APP LIES ONLY WITH RESPECT TO FACTS MATERIAL TO THE COMPUTATION OF ITA NO.1208/RJT/2010 7 INCOME AND NOT WITH THE COMPUTATION PER SE. THE F ICTION DOES NOT APPLY WHERE THE CONTROVERSY IS REGARDING T HE LEGALITY FO THE CLAIM MADE BY THE ASSESSEE. FURTHE R WHEN THE ASSESSEE OFFERS AN EXPLANATION IN DISCHARGE OF THE ONUS CAST UPON HIM BY EXPL.1 TO S. 271(1)(C) THE A O MUST CONSIDER THE EXPLANATION OBJECTIVELY AND UNLESS HE FINDS THE SAME AGAINST THE HUMAN PROBABILITIES OR UNLESS THERE ARE ANY REAL INCONSISTENCIES OR FACTUAL ERRORS IN S UCH AN EXPLANATION THE AO OUGHT TO ACCEPT THE SAME. THE ASSESSEE CANNOT BE EXPECTED TO PROVE THE CLAIM OF B ONA FIDES TO THE HILT. 3.7 HERE APPELLANT HAS REASONABLY EXPLAINED THAT TH E ADDITION MADE IN THE DEDUCTION CLAIMED U/S 80IB(10) OF THE A CT WAS ON ACCOUNT OF MERE CHANGE OF OPINION AND NOT DUE TO FU RNISHING INACCURATE PARTICULARS OF INCOME. THE VARIOUS EVID ENCES SUBMITTED BY IT WERE NOT CONSIDERED AS SUFFICIENT. THERE IS NOTHING ON RECORD TO PROVE THAT THE ADDITION REPRESENTS THE CONCEALED INCOME AND THAT THE SAME IS CONSCIOUSLY CONCEALED. THERE IS NOTHIN G ON RECORD TO CLEARLY SHOW THAT THE ABOVE ADDITIONS ARE CONCEALED INCOME OF THE APPELLANT. IT IS WELL SETTLED THAT PENALTY PROCEED INGS ARE INDEPENDENT AND SEPARATE FROM THE ASSESSMENT PROCEE DINGS AND THAT PENALTY IS NOT AUTOMATIC ON CONFIRMATION OF AD DITION. THERE IS A SETTLED AND CLEAR DISTINCTION BETWEEN ASSESSMENT PR OCEEDINGS AND PENALTY PROCEEDINGS. IN ASSESSMENT PROCEEDINGS TH E PRIMARY BURDEN LIES ON THE APPELLANT TO PROVE ITS CASE AND IN THE CASE OF FAILURE ON THE PART OF THE APPELLANT ADDITION WOUL D BE MADE TO THE INCOME OF THE APPELLANT. IN PENALTY PROCEEDINGS T HE FACTS AND CIRCUMSTANCES SHOULD BE CONSIDERED AFRESH FROM A DI FFERENT ANGLE AND FOR THAT FINDINGS ARRIVED IN THE ASSESSMENT PRO CEEDINGS WILL NOT BE ENOUGH. ON REAPPRAISAL OF FACTS AND CIRCUMSTANC ES THERE SHOULD BEE FOUND A CONSCIOUS AND WILLFUL DEFAULT ON THE PART OF THE APPELLANT WHICH RESULTS IN UNLAWFUL WITHHOLDING OF REVENUE. BY NO STRETCH OF IMAGINATION MERE FAILURE OF THE APPELLA NT CAN BE EQUATED WITH SCH CONSCIOUS AND WILLFUL DEFAULT. THE BURDEN OF PROOF LIES ON THE APPELLANT TO PROVE THAT APPELLANT HAD ACTED IN A BONAFIDE MANNER AND THERE IS NO CONSCIOUS DEFAULT. THE NON BONA FIDE CONDUCT OF THE APPELLANT SHOULD BE APPARENT FROM TH E FACTS AND CIRCUMSTANCES AND IT SHOULD NOT BE DIGGED OUT BY AP PLYING THEORIES OF PROBABILITIES AND ASSUMPTIONS. UNLESS EXPLANATI ONS OF THE APPELLANT ARE HELD AS FALSE AND NON BONA FIDE PENA LTY IS OT ATTRACTED. THIS VIEW HAS BEEN UPHELD BY THE JUDGME NT OF HONBLE GUJARAT HIGH COURT IN CASE OF CIT V. NATIONAL TEXTI LE (249 ITR 125) THE LEVY OF PENALTY WITH REFERENCE TO SECTION 68 WA S CONSIDERED. IN INSTANT CASE AS ON FACTS AS WELL AS ON LAW THE ISSU E IS SIMILAR. IN THE SAID JUDGMENT THE HONBLE GUJARAT HC HAS HELD AS UNDER: ITA NO.1208/RJT/2010 8 PROVISIONS OF S.68 ARE ENABLING PROVISIONS FOR MAK ING ADDITIONS WHERE THE ASSESSEE FAILS TO GIVEN AN EXPLANATION REGARDING CASH CREDITORS OR WHERE THE EXPLANATION IS NOT TO THE SATISFACTION OF THE AO SUCH ADDITION WOULD NOT AUTOMATICALLY JUSTIFY IMPOSITION OF PENALTY UNDER S.271(1)(C) R/W EXPLN.1 THERETO IN ORDER TO JUSTIFY LEVY OF PENALTY THERE MUST BE SOME MATERIAL OR CIRCUMSTANCES LEADING TO REASONABLE CONCLUSION THAT THE AMOUNT CONSCIOUS CONCEALMENT OR ACT OF FURNISHING O F INACCURATE PARTICULARS EXPLN.1 DOES NOT MAKE THE ASSESSMENT ORDER CONCLUSIVE EVIDENCE THAT THE AMOUN T ASSESSED WAS IN FACT THE INCOME OF THE ASSESSEE ASSESSEE DID NOT SATISFACTORILY EXPLAIN THE CASH CR EDITS BY PRODUCING EVIDENCE AND DOCUMENTS NEITHER THE PART IES WHO ARE SAID TO HAVE ADVANCED TEMPORARY LOANS NOR T HE ACCOUNTANT WHO HAD ALLEGEDLY ARRANGED THE LOANS WAS PRODUCED THOUGH THE DEPARTMENT WAS JUSTIFIED IN TREATING THE CASE CREDITS AS INCOME OF ASSESSEE THE RE WAS NOTHING TO LEAD TO A REASONABLE AND POSITIVE INFERE NCE THAT THE ASSESSEES EXPLANATION WAS FALSE CIRCUMSTANCE S DO NOT JUSTIFY IMPOSITION OF PENALTY EVEN BY TAKING RE COURSE TO EXPLN.1 TO S.271(1)(C). 3.8 NOW HONBLE SUPREME COURT IN THE CASE OF CIT V S RELIANCE PETROPRODUCTS (P) LTD (2010) 322 ITR 158 (SC) HAS F URTHER DECIDED THE ISSUE AS TO WHAT WILL AMOUNT TO FURNISHING INAC CURATE PARTICULARS HOLDING AS UNDER:- WORDS AND PHRASES PARTICULARS MEANING OF A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME- TAX ACT 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INC OME OF THE ASSESSEEE. SECONDLY THE ASSESSEE MUST HAVE FURNIS HED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRA CE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GI VEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PART ICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION THE PENALTY PROV ISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKIN G AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHI NG WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE BECAU SE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH TH E ITA NO.1208/RJT/2010 9 PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULARS A RE FOUND TO BE INACCURATE THE LIABILITY WOULD ARISE. TO ATTRA CT PENALTY THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE NOT EXACT OR CORRECT NOT ACCORDING TO THE TRUTH OR ERRONEOUS . WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENAL TY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO F URNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FU RNISHING INACCURATE PARTICULARS. 3.9 ON PERUSAL OF FACTS I FIND THAT THE VARIATION MADE IN THE DEDUCTION CLAIMED U/S 80IB(10) OF THE ACT WAS ON AC COUNT OF MERE CHANGE OF OPINION AND NOT DUE TO FURNISHING INACCUR ATE PARTICULARS OF INCOME. THE ADDITION AMOUNT WAS DULY DECLARED B Y THE APPELLANT IN THE COMPUTATION OF INCOME ATTACHED WITH THE RETU RN OF INCOME AND DULY SUPPORTED BY THE FORM NO.10CCB AND HENCE ALREADY DISCLOSED AND THEREFORE THE EXPLANATION 1 TO SEC.2 71 WILL NOT APPLY TO THE APPELLANT. THE CONCEALMENT MUST BE DELIBERA TE AND THERE BEING NO PROOF OF SUCH DELIBERATE CONCEALMENT THE IMPOSITION OF PENALTY WAS NOT WARRANTED. THERE WAS NO DELIBERATE INTENTION ON THE PART OF THE APPELLANT ALSO TO FURNISH INACCURAT E PARTICULARS OF INCOME. THIS VIEW ALSO FOUNDS SUPPORT FROM THE FOL LOWING DECISIONS:- (I) CIT VS. SUBHASH TRADING CO (1996) 221 ITR 110 ( GUJ) (II) NAVJIVAN OIL MILLS VS CIT (2001) 252 ITR 417 ( GUJ) (III) CIT VS SANGRUR VANASPATI MILLS LTD (SLP ITR 3 03 ITR ST.P- 18(SC) (IV) KANBAY SOFTWARE VS DCIT ITAT PUNE BENCH ITA NO.300/PN/07 (V) S T/ NJAMIBNEM CJO AM;A;