ROCHEM SEPARATION SYSTEMS (I) P.LTD, MUMBAI v. ACIT CEN CIR 10, MUMBAI

ITA 1661/MUM/2012 | 2003-2004
Pronouncement Date: 19-10-2016

Appeal Details

RSA Number 166119914 RSA 2012
Assessee PAN AABCR1955P
Bench Mumbai
Appeal Number ITA 1661/MUM/2012
Duration Of Justice 4 year(s) 7 month(s) 10 day(s)
Appellant ROCHEM SEPARATION SYSTEMS (I) P.LTD, MUMBAI
Respondent ACIT CEN CIR 10, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 19-10-2016
Appeal Filed By Assessee
Bench Allotted D
Tribunal Order Date 19-10-2016
Date Of Final Hearing 31-03-2015
Next Hearing Date 31-03-2015
Assessment Year 2003-2004
Appeal Filed On 09-03-2012
Judgment Text
D IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI SANJAY GARG JUDICIAL MEMBER AND SHRI ASHWANI TANEJA ACCOUNTANT MEMBER ITA NO.1660/MUM/2012 ASSESSMENT YEAR: 2002-03 & ITA NO.1661/MUM/2012 ASSESSMENT YEAR: 2003-04 ROCHEM SEPARATION SYSTEMS (I) P. LTD. 101 HDIL TOWER ANANT KANEKAR MARG BANDRA(E) MUMBAI-400050 / VS. ACIT CEN CIR 10 8 TH FLOOR CGO BLDG. ANNEX M. K. MARG MUMBAI-400020 ( APPELLANT ) ( REVENUE ) P.A. NO . AABCR1955P APPELLANT BY SHRI S.C. GUPTA (AR) REVENUE BY SHRI B.S. BIST (SR. DR) ! ' # $% / DATE OF HEARING : 04/10/2016 # $% / DATE OF ORDER: 19/10/2016 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAIN ST THE COMMON ORDER OF LD. COMMISSIONER OF INCOME TAX (APP EALS) ROCHEM SEPARATION SYSTEMS 2 MUMBAI-37 {(IN SHORT CIT(A)} PASSED AGAINST PENA LTY ORDER U/S 271(1)(C) FOR ASSESSMENT YEARS 2002-03 & 2003-0 4 ON THE FOLLOWING GROUNDS: THE CIT (A) ERRED IN LAW AND ON FACTS IN CONFIRMIN G THE PENALTY OF RS. 2 39 112/- (BEING PROPORTIONATE PENA LTY ON DISALLOWANCE FOR HIGHER EDUCATION EXPENSES) U/S 271 (1)(C) OF THE INCOME TAX ACT ON THE DISALLOWANCE MADE BY T HE ASSESSING OFFICER FOR HIGHER EDUCATION EXPENSES INC URRED BY THE ASSESSEE COMPANY AND CONFIRMED BY THE HON'BL E ITAT THOUGH THE ISSUE IS A DEBATABLE ISSUE AND THER E IS NO FINDING THAT THE APPELLANT FURNISHED ANY INCORRE CT PARTICULARS IN THE RETURN OF INCOME AS IN THE PROFI T AND LOSS ACCOUNT THE EXPENDITURE INCURRED ON HIGHER EDUCATION WAS SEPARATELY SHOWN AND NO PARTICULARS W ERE CONCEALED. THEREFORE THE PENALTY LEVIED U/S 271(1) (C) MERELY BECAUSE THE DISALLOWANCE IS CONFIRMED BY THE HON'BLE ITAT SHOULD BE DELETED. 2. DURING THE COURSE OF HEARING ARGUMENTS WERE MADE B Y SHRI S.C. GUPTA AUTHORISED REPRESENTATIVE (AR) ON BEHALF OF THE ASSESSEE AND BY SHRI B.S. BIST DEPARTMENTAL REPRESENTATIVE (DR) ON BEHALF OF THE REVENUE. 3. THE IDENTICAL GROUND HAS BEEN RAISED IN BOTH THE Y EARS. THE SIMILAR ISSUE IS WHETHER THE LEVY OF PENALTY U/S 27 1(1)(C) ON THE DISALLOWANCE MADE BY THE AO FOR HIGHER EDUCATIO N EXPENSES INCURRED BY THE ASSESSEE COMPANY RELATED T O MR. PRERAK GOEL IS JUSTIFIED OR NOT. 3.1. THE BRIEF BACKGROUND IN THIS CASE IS THAT A SEARCH AND SEIZURE OPERATION U/S 132 OF THE I. T. ACT 1961 WA S CARRIED OUT ON 10.08.2005 AT THE BUSINESS PREMISES OF VARIO US COMPANIES OF ROCHEM GROUP AND RESIDENTIAL PREMISES OF DIRECTORS OF THE SAID COMPANIES. SUBSEQUENTLY ASSE SSMENT PROCEEDINGS WERE CARRIED OUT U/S 153A OF THE ACT. N OTICE U/S 153A WAS ISSUED BY THE AO IN RESPONSE TO WHICH RET URN WAS ROCHEM SEPARATION SYSTEMS 3 FILED BY THE ASSESSEE U/S 153A. IT WAS NOTED BY THE AO FROM THE SAID RETURN THAT ASSESSEE HAD CLAIMED EXPENSES ON THE EDUCATION OF MR. PRERAK GOEL FOR RS.6 69 142/- FOR A.Y. 2002- 03 AND RS.8 53 286/- FOR A.Y. 2003-04. THESE EXPENS ES WERE INCURRED BY THE ASSESSEE FOR MBM TRAINING COURSE AT MANILA. IT WAS REPLIED BY THE ASSESSEE THAT EXPENSES WERE REIM BURSED FOR EDUCATION OF MR. PRERAK GOEL AS HE WAS WORKING AS A PPRENTICE WITH THE COMPANY AND ALSO FURNISHED AN UNDERTAKING THAT HE WOULD SERVE THE COMPANY FOR A MINIMUM CONTINUOUS PE RIOD OF FIVE YEARS. THE ASSESSEE SUBMITTED DETAILED JUSTIFI CATION FOR BUSINESS NECESSITY OF EXPENSES BUT THE AO WAS NOT SATISFIED AND THEREFORE DISALLOWANCE WAS MADE. SUBSEQUENTLY THE SAID DISALLOWANCE WAS CONFIRMED IN APPEAL BY THE LD. CIT (A) AS WELL AS BY THE TRIBUNAL VIDE ITS ORDER DATED 16 TH MAY 2011. THEREFORE THE AO INITIATED PENALTY PROCEEDING AND LEVIED THE PENALTY. SUBSEQUENTLY PENALTY WAS CONFIRMED BY THE LD. CIT(A) IN THE IMPUGNED ORDER AGAINST WHICH APPEAL H AS BEEN FILED BEFORE US BY THE ASSESSEE. 3.2. DURING THE COURSE OF HEARING BEFORE US IT WAS SUB MITTED BY THE LD. COUNSEL THAT GENUINE CLAIM WAS MADE BY T HE ASSESSEE UNDER THE BELIEF THAT THESE EXPENSES ARE A LLOWABLE AS BUSINESS EXPENSES IN THE HANDS OF THE ASSESSEE. FUL L FACTS HAVE BEEN DISCLOSED IN THIS REGARD; GENUINENESS OF EXPENSES HAS NOT BEEN DOUBTED BY THE LOWER AUTHORITIES. THE ONLY ALLEGATION OF THE LOWER AUTHORITIES IS THAT BUSINES S NECESSITY OF THE SAME COULD NOT BE ESTABLISHED BY THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT IN ANY CASE IMPUGNED AMOUNT HAS BEEN BROUGHT TO TAX AS INCOME IN THE HANDS OF MR. P RERAK GOEL ROCHEM SEPARATION SYSTEMS 4 U/S 2(24)(IV) OF THE ACT. THUS IT SHOWS THAT THERE WAS NO MOTIVE ON THE PART OF THE ASSESSEE TO EVADE TAXES. THE EXPENSES HAVE BEEN DISALLOWED ONLY ON THE GROUND TH AT THE RECIPIENT HAPPENS TO BE CLOSE RELATIVE OF THE DIREC TORS. BUT NO DEFECTS HAVE BEEN POINTED OUT IN THE EVIDENCES SUBM ITTED TO THE LOWER AUTHORITIES TO SUBSTANTIATE THESE EXPENSE S. UNDER THESE CIRCUMSTANCES IT WAS NOT A CASE OF CONCEALME NT OR FURNISHING INACCURATE PARTICULARS OF INCOME. THUS PENALTY HAS BEEN WRONGLY LEVIED AND SHOULD BE DELETED. 3.3. PER CONTRA IT WAS SUBMITTED BY THE LD. DR THAT TH E EXPENSES HAVE BEEN INCURRED IN RELATION TO EDUCATIO N OF MR. PRERAK GOEL WHO IS SON OF THE DIRECTOR OF THE ASSES SEE COMPANY AND HE WAS NOT EMPLOYEE OF THE COMPANY. UND ER THESE CIRCUMSTANCES THE DISALLOWANCE WAS RIGHTLY M ADE BY THE AO AND ALSO CONFIRMED BY THE TRIBUNAL. UNDER THESE CIRCUMSTANCES PENALTY HAS BEEN RIGHTLY LEVIED UPON THE SAID DISALLOWANCE AND THE SAME SHOULD BE CONFIRMED. 3.4. IN REJOINDER LD. COUNSEL SUBMITS THAT THIS IS A D EBATABLE ISSUE AND THEREFORE PENALTY LEVIED IN MANY CASES U PON IDENTICAL DISALLOWANCE HAS BEEN DELETED IN MANY CAS ES. HE PLACED RELIANCE UPON THE JUDGMENT OF MUMBAI BENCH O F THE TRIBUNAL IN THE CASE OF ACIT V. VIJAY JYOT SEATS LT D. (ITA NO.4441/MUM/2007 DATED 02.02.2010) M/S. WESTIN HOSPITALITY SERVICES PVT. LTD. VS. DCIT (ITA NOS. 1274 & 1275/MUM/2013 DATED 27.08.2014) AND OF HIGH COURT O F PUNJAB & HARYANA IN CASE OF CIT VS. MEHTA ENGINEERS LTD. LUDHIANA IN ITA NO. 599 & 600 OF 2007 DATED 7 TH FEBRUARY 2008 AND HIGH COURT OF DELHI IN THE CASE OF M/S. K OSTUB ROCHEM SEPARATION SYSTEMS 5 INVESTMENT LTD. V. CIT IN ITA NO.10/2014 DATED 25 TH FEBRUARY 2014. HE VEHEMENTLY CONTENDED THAT IN VIEW OF THESE JUDGMENTS THE PENALTY IS NOT LEVIABLE UPON THE ASS ESSEE. 3.5. WE HAVE GONE THROUGH THE FACTS OF THE CASE AND ARGUMENTS MADE BY BOTH THE SIDES AS WELL AS ORDERS PASSED BY THE LOWER AUTHORITIES AND ALSO THE ORDER PASSED BY THE TRIBUNAL IN QUANTUM APPEAL. IT IS NOT DISPUTED BEFO RE US THAT THE PAYMENT WAS MADE AND DULY SUBSTANTIATED BY THE ASSESSEE WITH THE HELP OF EVIDENCES. IT IS ALSO NOT DISPUTED THAT SHRI PRERAK GOEL WAS WORKING AS APPRENTICE WITH THE SAID COMPANY AND RESOLUTION WAS PASSED BY THE COMPANY FO R FINANCING HIS EDUCATION EXPENSES ON THE BASIS OF HI S UNDERTAKING TENDERED BY HIM COMMITTING HIMSELF FOR WORKING WITH THE COMPANY FOR A MINIMUM PERIOD OF FIVE YEARS . COPY OF DETAILED RESOLUTION JUSTIFYING THE BUSINESS NECESSI TY OF EDUCATION OF MR. GOEL FOR THE BUSINESS OF THE COMPA NY HAS BEEN PLACED BEFORE US. OUR ATTENTION WAS DRAWN UPON THE UNDERTAKING SUBMITTED BY THE MR. GOEL AS WELL. NOTH ING ADVERSE HAS BEEN BROUGHT ON RECORD BY THE LOWER AUT HORITIES WHILE LEVYING PENALTY WITH RESPECT TO THESE CRUCIAL EVIDENCES. UNDENIABLY THE TRIBUNAL HAS FOUND IN THE QUANTUM A PPEAL THAT THE ASSESSEE COULD NOT PROPERLY SUBSTANTIATE T HE BUSINESS NECESSITY OF THESE EXPENSES. BUT THE FACT REMAINS THAT THESE EXPENSES WERE INCURRED BY THE ASSESSEE AS ADMITTED BY THE LOWER AUTHORITIES ALSO AND IN THE OPINION OF THE AS SESSEE THESE EXPENSES WERE INCURRED FOR THE BUSINESS PURPOSE OF THE ASSESSEE. THE BELIEF OF THE ASSESSEE ABOUT THE BUSI NESS UTILITY OF THESE EXPENSES IS A REASONABLE BELIEF AND NOT SO METHING ROCHEM SEPARATION SYSTEMS 6 PURELY IMAGINARY OR FARFETCHED. THUS EXPLANATION T ENDERED BY THE ASSESSEE DURING THE COURSE OF PENALTY PROCEEDIN GS CAN BE SAID TO BE A PLAUSIBLE EXPLANATION. THE AMOUNT OF E XPENSES HAS BEEN DISALLOWED AS THE AO HAD DIFFERENT OPINION WHEREBY THESE EXPENSES WERE FOUND TO BE DEVOID OF ANY BUSIN ESS NECESSITY. BUT WE FIND THAT ON THIS ISSUE TWO OPIN IONS ARE POSSIBLE AND THUS THERE WAS APPARENTLY A DIFFERENC E IN THE OPINION BETWEEN THE AO AND ASSESSEE. IT IS ALSO NOT ED THAT COMPLETE FACTS WITH RESPECT TO IMPUGNED EXPENSES WE RE MADE AVAILABLE BEFORE THE LOWER AUTHORITIES. FULL DISCLO SURE OF FACTS AND RELATED INFORMATION WAS MADE AVAILABLE BY THE A SSESSEE. UNDER THESE CIRCUMSTANCES WE DOUBT IF THIS CLAIM C AN BE CATEGORIZED AS THE ONE GIVING RISE TO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IT IS FURTHER NOTED BY US THAT PENALTY WAS LEVIED UNDER SIMILAR S ITUATIONS IN MANY CASES WHICH HAD SUBSEQUENTLY BEEN TESTED IN CO URTS. IN THE CASE OF ACIT V. VIJAY JYOTI SEATS LTD. (SUPRA) PENALTY LEVIED WITH RESPECT TO SIMILAR DISALLOWANCE WAS FOU ND NOT SUSTAINABLE AND THEREFORE IT WAS DELETED BY THE TRI BUNAL BY OBSERVING AS UNDER: 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS SETTLED LAW THAT PENALTY UNDER SECTION 271(1) (C) IS A CIVIL LIABILITY AND THE REVENUE IS NOT REQUIRED TO PROVE WILLFUL CONCEALMENT AS HELD BY THE HONBLE SUPREME COURT IN CASE THE OF UNION OF INDIA VS. DHARMENDRA TEXTIL ES AND PROCESSORS (2008) 306 ITR 277(SC). HOWEVER EACH AN D EVERY ADDITION MADE IN THE ASSESSMENT CANNOT AUTOMATICALLY LEAD TO LEVY OF PENALTY FOR CONCEALME NT OF INCOME. A CASE FOR IMPOSITION OF PENALTY HAS TO BE EXAMINED IN TERMS OF THE PROVISIONS OF EXPLANATION 1 TO SECTION 271(1)(C). SECONDLY IT IS ALSO A SETTLED L EGAL ROCHEM SEPARATION SYSTEMS 7 POSITION THAT PENALTY PROCEEDINGS ARE DIFFERENT FRO M ASSESSMENT PROCEEDINGS. THE FINDING GIVEN IN THE ASSESSMENT THOUGH IS A GOOD EVIDENCE BUT THE SAME I S NOT CONCLUSIVE IN PENALTY PROCEEDINGS AS HELD BY THE HO NBLE SUPREME COURT IN THE CASE OF ANANTHARAM VEERASINGHA IAH & CO. VS. CIT ((1980) 123 ITR 457 (SC). 8. IN THE I NSTANT CASE THE PENALTY HAS BEEN IMPOSED ON THE SUSTENANCE OF DISALLOWANCE OF HIGHER EDUCATION EXPENSES AMOUNTING TO RS.14 35 000/- CLAIMED BY THE ASSESSEE ON THE EDUCA TION OF MS. JANAKI MOTASHA DAUGHTER OF ONE OF THE DIREC TORS OF THE COMPANY. WE FURTHER FIND THAT THERE IS NO DISPU TE THAT IN SUPPORT OF THE CLAIM OF DEDUCTION THE ASSESSEE HAS FILED COPY OF MOU BETWEEN THE ASSESSEE CO. AND MS. JANAKI MOTASHA LIST OF SHARE HOLDERS RESOLUTION OF BOARD OF DIRECTORS APPROVING EDUCATION EXPENSES OF MS. JANAK I MOTASHA COPY OF BOARD EXAM CERTIFICATE OF MS. JANA KI MOTASHA SHOWING HER EDUCATIONAL QUALIFICATION BEFOR E SHE WAS SENT ABROAD FOR HIGHER EDUCATION COPY OF DEGRE E CONFERRED ON MS. JANAKI MOTASHA BY RENSSELAER POLYTECHNIC INSTITUTE NEW YORK(USA) AND SALARY CER TIFICATE ISSUED TO MS. JANAKI MOTASHA FOR THE ASSESSMENT YEA RS 2005-06 AND 2006-07 TO SHOW THAT MS. JANAKI MOTASHA TOOK UP THE EMPLOYMENT WITH THE ASSESSEE IMMEDIATEL Y AFTER COMPLETING HER HIGHER EDUCATION. WE FURTHER F IND THAT THE DISALLOWANCE WAS SUSTAINED BY THE TRIBUNAL ON T HE GROUND THAT IT WAS THE DUTY OF THE PARENTS OF THE E MPLOYEE TO PROVIDE EDUCATION TO HER THE STUDY COURSE FOR W HICH THE EMPLOYEE WAS SPONSORED WAS NOT SEAT DESIGNING BUT WAS INFORMATION TECHNOLOGY HER DESIGNATION WAS MARKETING EXECUTIVE AND NOT DESIGNER OF SEATS. THUS THERE IS A COMPLETE MISMATCH BETWEEN THE DEGREE ACQ UIRED BY HER AND THE BUSINESS OF THE COMPANY AND THE JOB ENTRUSTED TO HER AFTER HER RETURN THE EXPENDITURE INCURRED BY THE ASSESSEE HAS NO NEXUS EITHER WITH THE BUSINE SS OF THE ASSESSEE OR THE JOB BEING ACTUALLY PERFORMED BY HER IN THE ASSESSEE COMPANY THE COMPANYS DECISION TO SPO NSOR HER STUDIES WAS GUIDED MORE BY FAMILY CONSIDERATION S THAN BUSINESS CONSIDERATION AND THE ISSUE IS COVERE D AGAINST THE ASSESSEE BY THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. HI NDUSTAN HOSIERY INDUSTRIES (SUPRA). THE TRIBUNAL HAS ALSO DISTINGUISHED THE DECISION OF THE HONBLE JURISDICT IONAL ROCHEM SEPARATION SYSTEMS 8 HIGH COURT IN SAKAL PAPERS PVT. LTD. (SUPRA) RELIE D ON BY THE LEARNED COUNSEL FOR THE ASSESSEE HOLDING THAT T HE FACTS IN THE PRESENT CASE ARE COMPLETELY DIFFERENT AND TH E RATIO LAID DOWN IN THE PRESENT CASE IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 9. THERE IS NO DISPUTE THAT TH E ASSESSEE HAS MADE THE ABOVE CLAIM ON THE BASIS OF T HE DOCUMENTARY EVIDENCE (SUPRA) SUPPORTED BY THE DECI SION OF HONBLE JURISDICTIONAL HIGH COURT IN SAKAL PAPER S PVT. LTD. (SUPRA). IN CIT VS. AIRLINES FINANCIAL SUPPORT SERVICES (I) LTD. (2009) 24 DTR (BOM) 124 IT HAS BEEN HELD T HAT THE ASSESSEE HAVING CLAIMED CERTAIN EXPENDITURE AS REVE NUE EXPENDITURE BONAFIDE RELYING ON A DECISION OF THE JURISDICTIONAL HIGH COURT IT CANNOT BE SAID THAT TH E PREDICATES OF SECTION 271(1)(C) WERE SATISFIED FOR IMPOSING PENALTY MERELY BECAUSE THE AO HELD THAT IT WAS CAPI TAL EXPENDITURE. 10. FURTHER IT HAS BEEN REPEATEDLY HEL D BY THE COURTS THAT WHEN THE FACTS ARE CLEARLY DISCLOSE D IN THE RETURN OF INCOME PENALTY CANNOT BE LEVIED. MERELY BECAUSE AN AMOUNT IS NOT ALLOWED OR TAXED TO INCOME IT CAN NOT BE SAID THAT THE ASSESSEE HAD FILED INACCURATE PARTICU LARS OR CONCEALED ANY INCOME CHARGEABLE TO TAX. EVEN IF SOM E DEDUCTION OR BENEFIT IS CLAIMED BY THE ASSESSEE WRO NGLY BUT BONAFIDE AND NO MALAFIDE CAN BE ATTRIBUTED THE PENALTY WOULD NOT BE LEVIED. IN THIS VIEW OF THE MA TTER AND IN THE ABSENCE OF ANY OTHER CONTRARY MATERIAL PLACE D ON RECORD BY THE REVENUE WE RESPECTFULLY FOLLOWING THE RATIO OF THE DECISIONS RELIED ON BY THE LEARNED COUNSEL FOR THE ASSESSEE HOLD THAT THERE WAS NO DELIBERATE OMISSION ON THE PART OF THE ASSESSEE EITHER FOR THE PURPOSE OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS AND ACCORDINGLY WE ARE INCLINED TO UPHO LD THE FINDING OF THE LEARNED CIT(A) IN DELETING THE PENAL TY IMPOSED BY THE AO. THE GROUNDS TAKEN BY THE REVENUE ARE THEREFORE REJECTED. 11. IN THE RESULT REVENUES APP EAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COUR T ON 02.02.2010. 3.6. SIMILAR VIEW HAS BEEN TAKEN IN ANOTHER CASE BY THE MUMBAI BENCH IN THE CASE OF M/S. WESTIN HOSPITALITY SERVICES PVT. LTD. VS. DCIT (SUPRA) . IT IS FURTHER NOTED THAT SIMILAR ISSUE CAME UP BEFORE HONBLE PUNJAB AND HARYANA ROCHEM SEPARATION SYSTEMS 9 HIGH COURT IN THE CASE OF CIT VS. MEHTA ENGINEERS L TD. (SUPRA) WHEREIN HONBLE HIGH COURT DELETED THE PENALTY BY OBSERVING INTER-ALIA AS UNDER: WE HAVE HEARD THE COUNSEL FOR THE APPELLANT AND PERUSED THE IMPUGNED ORDER. UNDISPUTEDLY IN THIS CASE THE ASSESSEE HAD ONLY CLAIMED CERTAIN EXPENDITURE INCURRED ON THE EDUCATION OF MR.VARUN MEHTA ON THE BASIS OF A WRITTEN AGREEMENT ACCORDIN G TO WHICH HE WAS TO SERVE THE COMPANY FOR AT LEAST THREE YEARS AFTER FINISHING HIS STUDIES ABROAD. IT IS NEITHER THE CASE OF THE REVENUE NOR THERE IS ANY MATERIAL TO THIS EFFECT AVAILABLE ON THE RECORD THA T THE SAID AGREEMENT WAS FALSE AND FABRICATED DOCUMENT. MOREOVER THERE IS NO SUCH FINDING RECORDED BY ANY ADJUDICATING AUTHORITY. THEREFORE IN VIEW OF THE SAID FACT AND THE FINDING OF FACT RECORDED BY THE ITAT AS REPRODUCED ABOVE WE ARE OF THE OPINION THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS RIGHTLY DELETED THE PENALTY WHILE COMING TO THE CONCLUSION THAT IT IS NOT THE CASE WH ERE THE ASSESSEE HAD CLAIMED INTENTIONALLY AND DELIBERATELY THE EXPENDITURE IN ORDER TO EVADE THE TAX LIABILITY. THUS WE DO NOT FIND ANY GROUND TO INTER FERE IN THE FINDING OF FACT RECORDED BY NO SUBSTANTIAL QUES TION OF LAW IS INVOLVED IN BOTH THE APPEALS AND THE SAME AR E HEREBY DISMISSED. 3.7. THEREFORE IN VIEW OF THE LEGAL POSITION AS DISCUS SED ABOVE AND FACTS OF THIS CASE BROUGHT BEFORE US WE FIND T HAT PENALTY IS NOT SUSTAINABLE IN BOTH THE YEARS AND THEREFORE SAME IS DIRECTED TO BE DELETED. BOTH THE APPEALS ARE ALLOWE D AND PENALTY OF RS.2 39 112/- FOR A.Y. 2002-03 AND RS.3 14 520/- FOR A.Y. 2003-04 ARE DIRECTED TO BE DELETED. ROCHEM SEPARATION SYSTEMS 10 4. IN THE RESULT APPEALS OF THE ASSESSEE ARE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH OCTOBER 2016. SD/- (SANJAY GARG ) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER ' ! / ACCOUNTANT MEMBER ! ' MUMBAI; ' DATED : 19/10/2016 CTX? P.S/. .. #$%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. ) *+ / THE APPELLANT 2. -*+ / THE RESPONDENT. 3. .$ . ! / ( ) ) / THE CIT MUMBAI. 4. .$ . ! / / CIT(A)- MUMBAI 5. 23 45 .$ )% 45$6 ! ' / DR ITAT MUMBAI 6. 7 8 ' / GUARD FILE. / BY ORDER - 2) //TRUE COPY// / (DY./ASSTT. REGISTRAR) ! ' / ITAT MUMBAI