The DCIT, Circle-5,,, Ahmedabad v. N.K. Proteins Ltd.,, Ahmedabad

ITA 1850/AHD/2009 | 2003-2004
Pronouncement Date: 25-01-2011 | Result: Dismissed

Appeal Details

RSA Number 185020514 RSA 2009
Assessee PAN AAACN9377N
Bench Ahmedabad
Appeal Number ITA 1850/AHD/2009
Duration Of Justice 1 year(s) 7 month(s) 22 day(s)
Appellant The DCIT, Circle-5,,, Ahmedabad
Respondent N.K. Proteins Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 25-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 25-01-2011
Date Of Final Hearing 25-01-2011
Next Hearing Date 25-01-2011
Assessment Year 2003-2004
Appeal Filed On 03-06-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' BEFORE SHRI MAHAVIR SINGH JM & SHRI A N PAHUJA AM ITA NO.1850/AHD/2009 (ASSESSMENT YEAR:-2003-04) DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE-5 2 ND FLOOR CU SHAH CHAMBERS ASHRAM ROAD AHMEDABAD V/S M/S N K PROTEINS LIMITED 9 TH FLOOR POPULAR HOUSE ASHRAM ROAD AHMEDABAD PAN: AAACN 9377 N [APPELLANT] [RESPONDENT] REVENUE BY :- DR. RAJA RAM SAH DR ASSESSEE BY:- SHRI A C SHAH AR O R D E R A N PAHUJA: THIS APPEAL BY THE REVENUE AGAINST AN ORDER DATED 26- 03-2009 OF THE LD. CIT(APPEALS)-XI AHMEDABAD FOR THE ASSESSMENT YEAR (AY) 2003-04 RAISES THE FOLLOWING GROUNDS:- 1 THE LD. COMMISSIONER OF INCOME-TAX (A)-XI AHMEDA BAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY LEVIED U/S 271(1)(C) AMOUNTING TO RS.7 71 375/-. 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME-TAX (A)-XI AHMEDABAD OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3 IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME- TAX (A)-XI AHMEDABAD MAY BE SET ASIDE AND THAT OF THE AO BE RESTORED. 2 FACTS IN BRIEF AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING INCOME OF RS.8 41 48 487/- FILED ON 28-11-2003 BY T HE ASSESSEE ENGAGED IN THE BUSINESS OF MANUFACTURING AND REFINI NG EDIBLE OILS AFTER BEING PROCESSED U/S 143(1) OF THE INCOME-TAX ACT 1961 [HEREINAFTER REFERRED TO AS THE ACT] WAS TAKEN UP FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE ACT ON 7. 10.2004. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFF ICER[AO IN SHORT] NOTICED THAT THE ASSESSEE CLAIMED DEDUCTION OF RS.5 41 354/- U/S 80HHC OF THE ACT AND OF RS.2 87 37 373/- U/S 80 IB OF THE ACT. ITA N O.1850/AHD/09 2 INTER ALIA THE FOLLOWING AMOUNTS WERE CONSIDERED W HILE CLAIMING THE DEDUCTION U/S 80IB OF THE ACT : 1 INSURANCE RECOVERED RS.52 47 000 2 BAD DEBTS RECOVERED RS. 4 18 000 3 INSURANCE CLAIM RECEIVED RS.12 87 000 4 KASAR RS. 41 000 ---------------- TOTAL RS.69 93 000 2.1 SINCE THE AFORESAID AMOUNTS WERE NOT DERIVED FR OM THE ACTIVITIES OF THE BUSINESS OF THE INDUSTRIAL UNDERT AKING THE AO DENIED DEDUCTION U/S 80IB OF THE ACT ON THE AFOR ESAID INCOME RELYING INTER ALIA ON THE DECISIONS IN CAMBAY ELE CTRIC SUPPLY INDUSTRIAL CO. LTD. VS. CIT 113 ITR 84(SC) ORISSA S TATE WAREHOUSING CORPORATION VS. CIT 237 ITR 589(SC) HINDUSTAN LEVER LTD. VS. CIT 239 ITR 297(SC) CIT VS. STERLING FOODS 237 ITR 579(SC) PANDIAN CHEMICALS LTD. VS. CIT 262 ITR 278(SC) K RA VINDRANATHAN NAIR VS. CIT 262 ITR 669(KERALA) AND CIT VS. JOSE T HOMAS 253 ITR(KERALA). ACCORDINGLY THE ASSESSMENT WAS COMPLE TED U/S 143(3) OF THE ACT ON 31.3.2006 ON AN INCOME OF RS.8 63 8 4 431/- IN CONSEQUENCE OF REDUCTION OF DEDUCTION U/S 80IB AND 80HHC TO RS.2 66 39 473/- AND RS.4 03 310/- RESPECTIVELY. IN TER ALIA PENALTY PROCEEDINGS U/S 271(1)(C) WERE ALSO INITIATED FOR F URNISHING INACCURATE PARTICULARS OF INCOME. 2.2 ON APPEAL THE LD. CIT(A) DIRECTED TO ALL OW DEDUCTION U/S 80IB OF THE ACT ON THE AMOUNT OF BAD DEBTS RECOVER ED AND KASAR WHILE UPHOLDING THE DISALLOWANCE IN RELATION TO AMO UNT ATTRIBUTABLE TO INSURANCE RECOVERED AND INSURANCE CLAIMS RECEIVED. ON FURTHER APPEAL THE ITAT UPHELD THE FINDINGS OF THE LD. CIT (A) IN THEIR ORDER DATED 23.11.2007 IN ITA NO.2150/AHD./2007. 2.3 THEREAFTER IN RESPONSE TO A SHOW CAUSE NOTICE DATED 13-08- 2008 BEFORE LEVY OF PENALTY THE ASSESSEE REPLIED V IDE LETTER DATED ITA N O.1850/AHD/09 3 21-08-2008 THAT THE ISSUE OF DEDUCTION U/S 80IB OF THE ACT ON THE AFORESAID AMOUNT ATTRIBUTABLE TO INSURANCE RECOVERE D OR RECEIVED BEING DEBATABLE THERE IS NO QUESTION OF CONCEALMEN T BECAUSE THIS WAS A CASE OF DIFFERENCE OF OPINION. HOWEVER THE A O DID NOT ACCEPT THE SUBMISSIONS OF THE ASSESSEE ON THE GROUND THE EXCESSIVE CLAIM OF BOTH THE AFORESAID DEDUCTIONS AMOUNTS TO FURNISHIN G OF INACCURATE PARTICULARS OF INCOME ACCORDINGLY A PENALTY OF RS.7 71 375/- WAS IMPOSED @ 100% OF THE TAX SOUGHT TO BE EVADED ON THE INCOME OF RS. 20 98 98 0/- ON THE GROUND THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME INVOKING INTER ALIA EXPLANATION-1 TO SECTION 271(1)(C) OF THE ACT . 3. ON APPEAL THE LD. CIT(A) CANCELLED THE PENALTY ON THE GROUND THAT ISSUE BEING DEBATABLE. NO PENALTY COULD BE LEVIED W HILE RELYING UPON DECISIONS IN ITO VS. VEGETABLE PRODUCTS LTD. 88 ITR 192(SC) UNION OF INDIA & OTHERS VS. OMKAR S. KANWAR & OTHERS 258 IT R 762 (SC) AND MANUBHAI & BROS 294 ITR 501(GUJ.) . 4. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LEARNED CIT(A). THE LEARNED DR WHIL E SUPPORTING THE ORDER OF THE AO CONTENDED THAT IN VIEW OF VARIOUS D ECISIONS OF THE HONBLE APEX COURT RELIED UPON BY THE AO ISSUE WAS NOT DEBATABLE. ON THE OTHER HAND THE LEARNED AR ON BEHALF OF THE ASSESSEE SUPPORTED THE FINDINGS OF THE LEARNED CIT(A) WHILE RELYING UPON DECISION IN CIT VS. RELIANCE PETRO PRODUCTS PVT. LT D. 2010) 322 ITR 158 (SC). 5. WE HAVE HEARD BOTH THE PARTIES AND GONE TH ROUGH THE FACTS OF THE CASE AS ALSO THE DECISIONS RELIED UPON. INDISPUTABLY IN T ERMS OF PROVISIONS OF RULE 18BBB OF THE IT RULES 1962 DEDUCTION U/S SEC. 80IB OF THE ACT IS ADMISSIBLE ON THE BASIS OF A PRESCRIBED AUDIT REPORT. LIKEWISE IN TERMS OF PROVISIONS OF SEC. 80HHC(4) OF THE ACT THE DEDUCTION U/S 80HHC IS NOT ADMISSIBLE UNLESS THE ASSESSEE FURNISHES IN THE PRESCRIBED FORM ALONG WI TH THE RETURN OF INCOME THE REPORT OF AN ACCOUNTANT AS DEFINED IN THE EXPLANAT ION BELOW SUB-SECTION (2) OF SECTION 288 CERTIFYING THAT THE DEDUCTION HAS BEEN CORRECTLY CLAIMED IN ITA N O.1850/AHD/09 4 ACCORDANCE WITH THE PROVISIONS OF THIS SECTION. THE ASSESSEE IN THE INSTANT CASE MERELY MADE A BONAFIDE CLAIM FOR THE SAID DEDUCTION S IN TERMS OF THE SAID CERTIFICATE. IF IN THE PROCESS CHARTERED ACCOUNTANT DID NOT EXCLUDE CERTAIN AMOUNTS THE ASSESSEE COULD NOT BE FAULTED. NOT EVEN A WHISPER HAS BEEN MADE IN THE IMPUGNED PENALTY ORDER AS TO WHICH SPEC IFIC PARTICULARS WERE FURNISHED INACCURATE OR WERE CONCEALED. THE EXPRES SION 'HAS CONCEALED THE PARTICULARS OF INCOME' AND 'HAS FURNISHED INACCURAT E PARTICULARS OF INCOME' HAVE NOT BEEN DEFINED EITHER IN SECTION 271 OR ELSEWHERE IN THE ACT. HOWEVER NOTWITHSTANDING THE DIFFERENCE IN THE TWO CIRCUMSTA NCES IT IS NOW WELL ESTABLISHED THAT THEY LEAD TO THE SAME EFFECT NAMELY KEEPING O FF A CERTAIN PORTION OF THE INCOME FROM THE RETURN. ACCORDING TO LAW LEXICON T HE WORD 'CONCEAL' MEANS: 'TO HIDE OR KEEP SECRET. THE WORD 'CONCEAL' IS C ON+CELARE WHICH IMPLIES TO HIDE. IT MEANS TO HIDE OR WITHDRAW FROM OBSERVATION; TO C OVER OR KEEP FROM SIGHT; TO PREVENT THE DISCOVERY OF ; TO WITHHOLD KNOWLEDGE OF . THE OFFENCE OF CONCEALMENT IS THUS A DIRECT ATTEMPT TO HIDE AN ITEM OF INCOM E OR A PORTION THEREOF FROM THE KNOWLEDGE OF THE INCOME-TAX AUTHORITIES.' IN WEBSTER'S DICTIONARY 'INACCURATE' HAS BEEN DEFI NED AS : 'NOT ACCURATE NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS ; AS AN INACCURATE STATEMENT COPY OR TRANSCRIPT.'. 5.1 THE PENALTY U/S 271(1)(C) OF THE ACT IS LEV IABLE IF THE AO IS SATISFIED IN THE COURSE OF ANY PROCEEDINGS UNDER TH IS ACT THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IT IS WELL S ETTLED THAT ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE SEPARATE AN D DISTINCT AND AS HELD BY HON'BLE SUPREME COURT IN THE CASE OF ANANTHRAMAN VEERASINGH AIAH & CO. VS. CIT 123 ITR 457 THE FINDINGS IN THE ASSESSMENT PROCEEDINGS CAN NOT BE REGARDED AS CONCLUSIVE FOR THE PURPOSES OF THE PENALTY PROCEEDINGS. IT IS ALSO WELL SETTLED THAT THE CRITERION AND YARDSTICKS FOR THE PURPOSE OF IMPOSING PENALTY U/S 271(1)(C) OF THE ACT ARE DIFFERENT THAN THOSE APPLIED FOR MAKING OR CONFIRMING THE ADD ITIONS. IT IS THEREFORE NECESSARY TO REAPPRECIATE AND RECONSIDER THE MATTER SO AS TO FIN D OUT AS TO WHETHER THE ADDITION OR ITA N O.1850/AHD/09 5 DISALLOWANCE MADE IN THE QUANTUM PROCEEDINGS ACTUAL LY REPRESENTS THE CONCEALMENT ON THE PART OF THE ASSESSEE AS ENVISAGED IN SEC. 27 1(1 )(C) OF THE ACT AND WHETHER IT IS A FIT CASE TO IMPOSE THE PENALTY BY INVOKING THE SA ID PROVISIONS. THE PROVISIONS OF SECTION 271(1)( C ) OF THE ACT STIPULATE THAT IF THE ASSESSING OFFICE R OR THE CIT(APPEALS) OR THE COMMISSIONER IN THE COURSE OF PROCEEDINGS UNDE R THIS ACT IS SATISFIED THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS THEREOF HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY A SUM WHICH SHALL NOT BE LESS THAN BUT WHICH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED BY A REASON OF THE CONCEALMENT OF PARTICULAR S OF HIS INCOME. EXPLANATION 1 TO SECTION 271(1)( C ) OF THE ACT MENTIONS THAT WHERE IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THE ACT SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FO UND BY THE AO OR THE CIT (APPEALS) OR THE COMMISSIONER TO BE FALSE OR SUCH PERSON OFF ERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM THEN THE AMOUNT ADDED OR DIS ALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL FOR THE PURPOSE OF CLAUSE ( C ) OF SECTION 271(1) BE DEEMED TO REPRESENT THE INCOME IN RESPEC T OF WHICH PARTICULARS HAVE BEEN CONCEALED. IN OTHER WORDS THE NECESSARY INGREDIEN TS FOR ATTRACTING EXPLANATION 1 TO SECTION 271(1)( C ) ARE THAT ( I ) THE PERSON FAILS TO OFFER THE EXPLANATION OR ( II ) HE OFFERS THE EXPLANATION WHICH IS FOUND BY THE A O OR THE CIT (APPEALS) OR THE COMMISSIONER TO BE FALSE OR ( III ) THE PERSON OFFERS EXPLANATION WHICH HE IS NOT ABL E TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME HAVE BEEN DISCLOSED BY HIM. 5.2 IF THE CASE OF ANY ASSESSEE FALLS IN ANY OF THESE T HREE CATEGORIES THEN THE DEEMING PROVISION PROVIDED IN EXPLANATION 1 TO SECTION 271(1)( C ) COMES INTO PLAY AND THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME SHALL BE CONSIDERED AS THE INCOME IN RESPECT OF WHICH PARTIC ULARS HAVE BEEN CONCEALED FOR THE PURPOSES OF CLAUSE ( C ) OF SECTION 271(1) AND THE PENALTY FOLLOWS. ON TH E OTHER HAND IF THE ASSESSEE IS ABLE TO OFFER AN EX PLANATION WHICH IS NOT FOUND BY ITA N O.1850/AHD/09 6 THE AUTHORITIES TO BE FALSE AND ASSESSEE HAS BEEN ABLE TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT ALL THE FACTS REL ATING TO THE SAME HAVE BEEN DISCLOSED BY HIM THE ASSESSEE SHALL BE OUT OF THE CLUTCHES OF EXPLANATION 1 TO SECTION 271(1)( C ) OF THE ACT AND IN THAT CASE THE PENALTY SHALL N OT BE IMPOSED. HONBLE SUPREME COURT IN THE CASE OF DILIP N. SHROFF V . JT. CIT [2007] 210 CTR (SC) 228 : [2007] 291 ITR 519 (SC) WHILE CONSIDERING THE SCOPE OF THESE PROVISIONS U/S 271(1)( C ) OF THE ACT OBSERVED IN THE FOLLOWING TERMS: THE LEGAL HISTORY OF SECTION 271(1)(C) OF THE ACT TRACED FROM THE 1922 ACT PRIMA FACIE SHOWS THAT THE EXPLANATIONS WERE APPLIC ABLE TO BOTH THE PARTS. HOWEVER EACH CASE MUST BE CONSIDERED ON ITS OWN FA CTS. THE ROLE OF THE EXPLANATION HAVING REGARD TO THE PRINCIPLE OF STATU TORY INTERPRETATION MUST BE BORNE IN MIND BEFORE INTERPRETING THE AFOREMENTIONE D PROVISIONS. CLAUSE (C) OF SUB-SECTION (1) OF SECTION 271 CATEGORICALLY STATES THAT THE PENALTY WOULD BE LEVIABLE IF THE ASSESSEE CONCEALS THE PARTICULARS O F HIS INCOME OR FURNISHES INACCURATE PARTICULARS THEREOF. BY REASON OF SUCH C ONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS ALONE THE ASSESSEE DOES NOT IPSO FACTO BECOME LIABLE FOR PENALTY. IMPOSITION OF PENALTY IS NOT AUTOMATIC. LE VY OF PENALTY IS NOT ONLY DISCRETIONARY IN NATURE BUT SUCH DISCRETION IS REQU IRED TO BE EXERCISED ON THE PART OF THE ASSESSING OFFICER KEEPING THE RELEVANT FACTO RS IN MIND. SOME OF THOSE FACTORS APART FROM BEING INHERENT IN THE NATURE OF PENALTY PROCEEDINGS AS HAS BEEN NOTICED IN SOME OF THE DECISIONS OF THIS COURT INHERES ON THE FACE OF THE STATUTORY PROVISIONS. PENALTY PROCEEDINGS ARE NOT T O BE INITIATED AS HAS BEEN NOTICED BY THE WANCHOO COMMITTEE ONLY TO HARASS TH E ASSESSEE. THE APPROACH OF THE ASSESSING OFFICER IN THIS BEHALF MUST BE FAI R AND OBJECTIVE. THE TERM 'INACCURATE PARTICULARS' IS NOT DEFINED. F URNISHING OF AN ASSESSMENT OF VALUE OF THE PROPERTY MAY NOT BY ITSELF BE FURNISHI NG OF INACCURATE PARTICULARS. EVEN IF THE EXPLANATIONS ARE TAKEN RECOURSE TO A F INDING HAS TO BE ARRIVED AT HAVING REGARD TO CLAUSE (A) OF EXPLANATION 1 THAT T HE ASSESSING OFFICER IS REQUIRED TO ARRIVE AT A FINDING THAT THE EXPLANATION OFFERED BY AN ASSESSEE IN THE EVENT HE OFFERS ONE WAS FALSE. HE MUST BE FOUND TO HAVE FAI LED TO PROVE THAT SUCH EXPLANATION IS NOT ONLY NOT BONA FIDE BUT ALL THE F ACTS RELATING TO THE SAME AND MATERIAL TO THE INCOME WERE NOT DISCLOSED BY HIM. T HUS APART FROM HIS EXPLANATION BEING NOT BONA FIDE IT SHOULD HAVE BEE N FOUND AS OF FACT THAT HE HAS NOT DISCLOSED ALL THE FACTS WHICH WAS MATERIAL TO T HE COMPUTATION OF HIS INCOME. 5.3 IN THE LIGHT OF AFORESAID OBSERVATIONS O F THE HONBLE APEX COURT WHAT IS TO BE SEEN IN THE INSTANT CASE IS WHETHER THE CLAI M FOR DEDUCTION U/S 80IB OR 80HHC OF THE ACT ON THE BASIS OF CERTIFICATE OF THE ACCOUNTANT MADE BY THE ASSESSEE WAS BONA-FIDE AND WHETHER ALL THE MATERIAL FACTS RELEVANT THERETO HAVE ITA N O.1850/AHD/09 7 BEEN FURNISHED AND ONCE IT IS SO ESTABLISHED THE A SSESSEE CANNOT BE HELD LIABLE FOR CONCEALMENT PENALTY U/S 271(L)(C) OF THE ACT. T HE ASSESSING OFFICER HAS NOT BEEN ABLE TO ESTABLISH THAT THE CLAIM OF THE ASSESS EE FOR DEDUCTION UNDER SECTIONS 80IB OR 80HHC WAS NOT BONA FIDE. A MERE REJECTION OF THE CLAIM OF THE ASSESSEE BY RELYING ON DIFFERENT INTERPRETATIONS DOES NOT AM OUNT TO CONCEALMENT OF THE PARTICULARS OF INCOME OR FURNISHING INACCURATE PART ICULARS THEREOF BY THE ASSESSEE. THE MERE REJECTION OF THE EXPLANATION OF THE ASSESSEE DID NOT RENDER THE EXPLANATION FALSE. WHEN TWO VIEWS ARE POSSIBLE NO PENALTY CAN BE IMPOSED IS A PRINCIPLE THAT HAS BEEN ENUNCIATED IN THE DE CISION IN THE CASE OF CIT V. P.K. NARAYANAN [1999] 238 ITR 905 (KER). SIMILAR VIEW WAS TAKEN BY THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF C.I.T. V. CALCU TTA CREDIT CORPORATION 166 ITR 29(CAL.). IN THE CASE UNDER CON SIDERATION WE FIND THAT THE ASSESSEE HAD GIVEN ALL THE PARTICULARS OF INCOM E AND HAD DISCLOSED ALL FACTS TO THE AO. IN SUCH CIRCUMSTANCES HONBLE DELHI HIGH C OURT HELD IN THE CASE OF COMMISSIONER OF INCOME-TAX.VS BACARDI MARTINI INDIA LIMITED. 288 ITR 585(DEL) THAT NO PENALTY WAS LEVIABLE. IN CIT VS. HARSHVAR DHAN CHEMICALS & MINERALS LTD. (259 ITR 212) (RAJ) HONBLE RAJASTHAN HIGH COU RT UPHELD THE FINDING OF THE TRIBUNAL THAT WHEN THE ASSESSEE HAS CLAIMED SOME AM OUNT THOUGH THAT IS DEBATABLE IN SUCH CASES IT CANNOT BE SAID THAT TH E ASSESSEE HAS CONCEALED ANY INCOME OR FURNISHED INACCURATE PARTICULARS FOR EVAS ION OF THE TAX. AS ALREADY STATED IN THE INSTANT CASE THERE IS NOTHING TO SUGGEST THAT THE ASSESSEE FURNISHED ANY INACCURATE PARTICULARS OR CONCEALED T HE PARTICULARS . IN THIS BEHALF THE FOLLOWING OBSERVATIONS OF THE HONBLE APEX COUR T MADE IN SREE KRISHNA ELECTRICALS V. STATE OF TAMIL NADU & ANR. [(2009) 2 3VST 249 (SC)] AS REGARDS THE PENALTY ARE APPOSITE. 'SO FAR AS THE QUESTION OF PENALTY IS CONCERNED THE ITEMS WHICH WERE NOT INCLUDED IN THE TURNOVER WERE FOUND INCORPORATED IN THE APPE LLANT'S ACCOUNT BOOKS. WHERE CERTAIN ITEMS WHICH ARE NOT INCLUDED IN THE TURNOVE R ARE DISCLOSED IN THE DEALER'S OWN ACCOUNT BOOKS AND THE ASSESSING AUTHORITIES INC LUDE THESE ITEMS IN THE DEALER'S TURNOVER DISALLOWING THE EXEMPTION PENALT Y CANNOT BE IMPOSED. THE PENALTY LEVIED STANDS SET ASIDE.' 5.4 IN THE INSTANT CASE THE RELEVANT CLAIM FOR DEDUCTION U/S 80IB & 80HHC HAS BEEN MADE ONLY ON THE BASIS OF CERTIFICATES OF THE CHARTERED ACCOUNTANT ON THE BASIS OF TRANSACTIONS INCORPORATED IN THE ACCOUNTS AND PR OFIT WAS REFLECTED IN THE PROFIT AND ITA N O.1850/AHD/09 8 LOSS ACCOUNT. THE CHARTERED ACCOUNTANT DETERMINING THE DEDUCTION 80IB OR U/S 80HHC DID NOT EXCLUDE THE AFORESAID AMOUNTS ATTRI BUTABLE TO INSURANCE. THUS NO FAULT CAN BE FOUND WITH THE CLAIM OF THE ASSESSEE T HAT IT HAD CLAIMED THE DEDUCTION IN A BONA FIDE MANNER. IN SIMILAR CIRCUMSTANCES. HONB LE PUNJAB AND HARYANA HIGH COURT CANCELLED THE PENALTY LEVIED IN RESPECT OF DI SALLOWANCE OF DEDUCTION U/S.80I OF THE ACT IN THE CASE OF CIT VS. SD RICE MILLS 275 I TR 206 (P&H). SIMILAR VIEW WAS TAKEN IN ACIT VS. ARISUDANA SPINNING MILLS LTD. 19 DTR1(CHD.) AND MODEL FOOTWEAR P LTD. VS. ITO 124 ITD 353(DEL.) MOREOVER MERE FACT THAT THE REPORT PREPARED BY THE CA WAS NOT IN ACCORDANCE WITH THE PROVISIONS O F SECTION 80HHC(4) OR 80IB OF THE ACT WAS NOT ENOUGH TO HOLD THAT THE MISTAKE WA S NOT BONA FIDE. THIS VIEW IS SUPPORTED BY THE DECISION IN THE CASE OF CIT VS. D EEP TOOLS PVT. LTD. 274 ITR 603 (P&H) WHERE IN ALSO LEVY OF PENALTY WAS HELD TO BE UNJUSTIFIED. A SIMILAR VIEW WAS TAKEN IN CIT VS. CAPLIN POINT LABORATORIES LTD. 29 3 ITR 524(MAD.). 5.5. IN VIEW OF THE FOREGOING WE ARE OF THE OPI NION THAT MERE ERRONEOUS CLAIM IN THE ABSENCE OF ANY CONCEALMENT OR FURNISHING OF INA CCURATE PARTICULARS IS NO GROUND FOR LEVYING PENALTY ESPECIALLY WHEN THERE I S NOTHING ON RECORD TO SHOW THAT THE EXPLANATION OFFERED BY THE ASSESSEE WAS NO T BONA FIDE OR ANY MATERIAL PARTICULARS WERE CONCEALED OR FURNISHED INACCURATE . IN THESE CIRCUMSTANCES WE ARE OF THE OPINION THAT LEVY OF PENALTY IS NOT JUS TIFIED THEREFORE WE HAVE NO HESITATION IN UPHOLDING THE FINDINGS OF THE LD. CI T(A) CANCELLING THE PENALTY LEVIED UNDER SECTION 271 (1)(C) OF THE ACT. CONSEQUENTLY GROUND NO.1 IN THE APPEAL IS DISMISSED. 6. GROUND NOS. 2 & 3 BEING MERE PRAYER DO NOT REQUIRE ANY SEPARATE ADJUDICATION AND ARE THEREFORE DISMISSED. 7. IN THE RESULT APPEAL IS DISMISSED.. ORDER PRONOUNCED IN THE COURT TODAY ON 25-01-2011 (MAHAVIR SINGH) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATED : 25-01-2011 ITA N O.1850/AHD/09 9 COPY OF THE ORDER FORWARDED TO: 1. M/S N K PROTEINS LIMITED 9 TH FLOOR POPULAR HOUSE ASHRAM ROAD AHMEDABAD 2. DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE-5 AH MEDABAD 3. CIT CONCERNED 4. CIT(A)-XI AHMEDABAD 5. DR ITAT AHMEDABAD BENCH-C AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT AHMEDABAD