The ACIT,(OSD)Circle-8,, Ahmedabad v. Shah Alloys Ltd.,, Ahmedabad

ITA 3615/AHD/2008 | 2003-2004
Pronouncement Date: 21-01-2011 | Result: Dismissed

Appeal Details

RSA Number 361520514 RSA 2008
Assessee PAN AADCS0474L
Bench Ahmedabad
Appeal Number ITA 3615/AHD/2008
Duration Of Justice 2 year(s) 2 month(s) 18 day(s)
Appellant The ACIT,(OSD)Circle-8,, Ahmedabad
Respondent Shah Alloys Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 21-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 21-01-2011
Date Of Final Hearing 11-01-2011
Next Hearing Date 11-01-2011
Assessment Year 2003-2004
Appeal Filed On 03-11-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL : A BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA J.M. & HON' BLE SHRI A.N. PAHUJA A.M. ) I.T.A. NOS. 3615 & 3616/AHD/2008 ASSESSMENT YEARS : 2003-2004 & 2004-2005 ASSISTANT COMMISSIONER OF INCOME TAX -VS.- SHAH ALLOYS LIMITED (OSD) CIRCLE-8 AHMEDABAD AHMEDABAD (PAN : AADC S 0474 L) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANIL KUMAR D .R. RESPONDENT BY : SHRI S.N. DIVETIA A .R. O R D E R PER SHRI T.K. SHARMA JUDICIAL MEMBER : THESE TWO APPEALS FILED BY THE REVENUE ARE AGAINST TWO SEPARATE ORDERS BOTH DATED 28.08.2008 OF LEARNED COMMISSIONER OF INCOME TAX (A PPEALS)-XIV AHMEDABAD CANCELLING THE PENALTY OF RS.57 15 119/- AND RS.2 17 52 430/- LEVI ED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) FOR THE ASSESSMENT YEARS 2003-04 & 2004-0 5 RESPECTIVELY. 2. BRIEF FACTS RELATING TO THE PENALTY LEVIED BY TH E ASSESSING OFFICER UNDER SECTION 271(1)(C) FOR THE ASSESSMENT YEAR 2003-04 ARE THAT THE ASSESS ING OFFICER LEVIED THE PENALTY OF RS.57 15 119/- FOR FURNISHING INACCURATE PARTICULAR S OF INCOME IN RESPECT OF ADDITION MADE BY DISALLOWING EXCESS CLAIM OF DEDUCTION UNDER SECTION 80IA ON ACCOUNT OF ELECTRICITY CHARGES TO THE TUNE OF RS.39 97 148/- AS WELL AS ON ACCOUNT OF EXC LUSION OF INTEREST RECEIVED AMOUNTING OF RS.1 15 54 196/- FROM THE PROFITS OF BUSINESS FOR T HE PURPOSE OF COMPUTING DEDUCTION UNDER SECTION 80IA OF THE INCOME TAX ACT 1961. IN THE PE NALTY ORDER THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE-COMPANY HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME BY CLAIMING EXCESSIVE DEDUCTION UNDER SECTION 80IA IN RESPECT O F CAPTIVE POWER PLANT (HEREINAFTER REFERRED AS CPP) AND THAT THE ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 80IA IN RESPECT OF INTEREST RECEIVED CANNOT BE ALLOWED AS THE INTEREST INCOME IS NOT DERIVED FROM INDUSTRIAL UNDERTAKING. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CO NFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER IN RESPECT OF BOTH THESE ISSUES VIDE HIS ORDER DATED 10.07.2006. 2 ITA NOS . 3615-AHD-2008 & 3616-AHD-2008 3. ON APPEAL THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) CANCELLED THE PENALTY FOR THE DETAILED REASONS GIVEN IN PARA 2.3 TO 2.5 WHIC H IS REPRODUCED HEREUNDER :- 2.3. I HAVE CONSIDERED THE FACTS OF THE CASE AS W ELL AS THE SUBMISSIONS AS ADVANCED BY THE A.R. OF THE APPELLANT THE APPELLANT HAD CLAIMED THE DEDUCTION U/S. 80IA @ 100% OF INCOME OF CPP TO THE TIME OF RS.13 85 51 163/- BUT THE SAME WAS RESTRICTED TO RS.10 60 05 338/- BECAUSE OF ADDITIONAL CLAIM OF DE DUCTION U/S. 80HHC.. ULTIMATELY THE AO ALLOWED THE DEDUCTION U/S. 80IA TO THE TUNE OF R S. 13 36 79 721/- AS NO DEDUCTION WAS ALLOWED U/S. 80HHC. IT IS SEEN THAT THE ADDITION OF RS.39 97 148/-HAS BEEN MADE BY THE AO BY WAY OF ESTIMATING THE MARKET VALUE OF UNIT OF EL ECTRICITY GENERATED BY CAPTIVE POWER PLANT AT THE RATE OF RS. 5.18 PER UNIT AS AGAINST T HE VALUATION MADE BY THE APPELLANT AT RS. 5.22 PER UNIT AND THEREBY THE INCOME OF ELIGIBLE UN IT I.E. CPP HAS BEEN REDUCED BY RS.39 97 148/-. THE A.O. OBSERVED THAT THE APPELLAN T HAS INCLUDED THE ELECTRICITY DUTY CHARGED BY THE GEB ON BEHALF OF THE STATE GOVT. ON PURCHASE OF ELECTRICITY FROM STATE GOVT. HOWEVER AS THE ELECTRICITY CONSUMED BY THE A PPELLANT WAS GENERATED FROM ITS CPP NO ELECTRICITY DUTY WAS CHARGED BY THE STATE GOVT. ACCORDINGLY THE AO WORKED OUT THE RATE OF ELECTRICITY @ RS. 5.18 PER UNIT BY EXCLUDIN G THE AMOUNT OF ELECTRICITY DUTY. THE APPELLANT HAS CLAIMED BEFORE THE A.O AS WELL AS TH E C1T (APPEALS) THAT THE VALUATION OF ELECTRICITY GENERATED FROM CPP SHOULD BE CONSIDERED AT THE MARKET VALUE I E THE PRICE THAT SUCH GOODS OR SERVICES WOULD ORDINARILY FETCH IN TH E OPEN MARKET. IN SUPPORT OF ITS CONTENTIONS THE APPELLANT HAS RELIED UPON VARIOUS DECISIONS BUT THE A O. REJECTED THE CLAIM OF THE APPELLANT AND RECOMPUTED THE MARKET VA LUE OF UNIT OF ELECTRICITY GENERATED OUT OF CPP AT RS. 5.18 PER UNIT. THE A.R. OF THE APPELL ANT HAS STRONGLY CONTENDED THAT THE APPELLANT HAS FURNISHED ALL THE RELEVANT DETAILS NE CESSARY FOR QUANTIFYING THE DEDUCTION CLAIMED U/S. 80IA AND THE DISALLOWANCE IS THE RESUL T OF A DIFFERENT METHOD ADOPTED BY THE A.O FOR WORKING OUT THE MARKET VALUE OF UNIT OF ELE CTRICITY GENERATED. IN FACT BEFORE THE A.O THE APPELLANT HAS CLAIMED VIDE LETTER DT. 6/12/ 2005 IN RESPONSE TO SHOW CAUSE NOTICE ISSUED DURING THE ASST PROCEEDINGS THAT THE UNIT CO ST OF ELECTRICITY HAS BEEN WORKED OUT ON THE BASIS OF MARKET VALUE I.E. THE PRICE PAID BY T HE CONSUMER AND THE RATE OF ELECTRICITY WAS WORKED OUT NOT ARBITRARILY BUT ON THE BASIS OF ACT UAL ELECTRICITY BILLS AS PER THE DETAILS GIVEN BY THE APPELLANT BEFORE THE AO. THE AR ALSO C ONTENDED THAT THE UNIT COST OF ELECTRICITY PRODUCED WAS COMPUTED UNDER A BONAFIDE BELIEF THAT THE MARKET VALUE SHOULD BE RS. 5.22 PER UNIT AND THAT THERE WAS NO MALAFIDE IN TENTION ON THE PART OF THE APPELLANT. IT WAS CONTENDED THAT THE COMPUTATION OF UNIT COST HAS BEEN DONE AT THE COMMERCIAL RATE. THE APPELLANT HAS ALSO SUBMITTED THAT THE DISALLOWANCE MADE BY THE AO U/S. 80IA IS A DEBATABLE ISSUE AND IT HAS CHALLENGED THE ORDER OF CIT(A) BEFORE THE TRIBUNAL. FURTHER WHAT IS THE VALUE OF UNIT OF ELECTRICITY TO BE ADOP TED IS A MATTER OF TWO OPINIONS AS HELD IN FOLLOWING TWO DECISIONS:- (I) WEST COAST PAPER MILLS LTD. VS.- JCIT (100 TTJ 833 (MUM.) WHEREIN THE TRIBUNAL DIRECTED THAT PROFITS BE WORKE D OUT ON THE BASIS OF THE PRICE OF THE POWER GENERATED BY THE ASSESSEE AT AVE RAGE OF ANNUAL LANDED COST OF ELECTRICITY PURCHASED FROM KARNATAKA STATE ELECTRIC ITY BOARD. (II) WEST COAST PAPER MILLS LTD. VS. ACIT (105 TTJ 344) (MUM) IT WAS HELD THAT TRANSFER PRICE HAS TO BE WORKED OU T ON THE BASIS OF AVERAGE PRICE PAID BY THE ASSESSEE DURING THE WHOLE YEAR TO SLATE ELECTRICITY BOARD MINUS EXTRANEOUS CHARGES SUCH AS ELECTRICITY DUTY ETC. 3 ITA NOS . 3615-AHD-2008 & 3616-AHD-2008 THUS THERE ARE TWO OPINIONS ON WORKING OF THE AVER AGE PRICE OF POWER GENERATED BY AN ASSESSEE. HENCE ADOPTION OF VALUE OF UNIT RATE OF ELECTRICITY IS A DEBATABLE ISSUE. 2.4. THE SECOND ISSUE ON WHICH THE PENALTY HAS BEEN LEVIED IS WITH REGARD TO NON-GRANTING OF DEDUCTION U/S. 80IA ON INTEREST INC OME. THE APPELLANT HAD CLAIMED THAT FOR CALCULATING THE DEDUCTION U/S. 80IA NET I NTEREST INCOME SHOULD BE EXCLUDED ON THE BASIS OF DECISION OF ITAT DELHI SPL. BENCH IN THE CASE OF LALSON ENTERPRISES BUT THE A.O. HAS NOT ACCEPTED THE CLAIM AND HAS EXC LUDED GROSS INTEREST INCOME FOR COMPUTATION OF DEDUCTION U/S. 80IA. VARIOUS COURTS HAVE DELIVERED DIFFERING JUDGMENTS AS TO WHETHER NET INTEREST INCOME OR GROS S INTEREST INCOME IS TO BE EXCLUDED THEREFORE IT IS A DEBATABLE ISSUE AND RE JECTION OF A LEGAL CLAIM OF THE APPELLANT CANNOT BE CONSIDERED AS FURNISHING OF INA CCURATE PARTICULARS OF ITS INCOME. 2.5. IT HAS ALSO BEEN STATED THAT THE DISALLOWANCE MADE IN RESPECT OF DEDUCTION U/S. 80IA HAS NOT AFFECTED ITS INCOME AND ITS TAX L IABILITY FOR THE YEAR UNDER CONSIDERATION AS THE TAX LIABILITY HAS BEEN CALCUL ATED ON THE BASIS OF BOOK PROFIT U/S. 115JB OF THE ACT. THE DECISION RELIED ON BY THE APP ELLANT IN THE CASE OF GUJARAT CREDIT CORPORATION LTD. (ITAT A'BAD SPL. BENCH) REP ORTED IN 302 ITR (AT) 250 SUPPORTS THE CLAIM OF THE APPELLANT THAT MERE REJEC TION OF ASSESSEE'S CLAIM OF LOSS ON A DIFFERENT GROUND BY THE APPELLATE AUTHORITY CANNO T BE EQUATED WITH CONCEALMENT. IN THE INSTANT CASE IT IS FOUND THAT A DIFFERENT V IEW HAS BEEN TAKEN BY THE AO WHILE REJECTING THE CLAIM OF THE APPELLANT FOR CALCULATIN G THE MARKET VALUE OF UNIT OF ELECTRICITY PRODUCED IN CPP FOR WORKING OUT THE INC OME OF CPP AND ALSO ON NON GRANTING OF DEDUCTION U/S. 80IA ON INTEREST INCOME. THERE IS NO CONSCIOUS/DELIBERATE ATTEMPT TO CONCEAL ANY INCOME ON THE PART OF THE APPELLANT. IN FACT SIMILAR CLAIM ON THE BASIS OF MARKET VALUE OF UNIT OF ELECTRICITY HAS BEEN ALLOWED BY THE AO U/S. 80IA IN A.Y. 2001-02. I ALSO FIND TH AT HON. MADRAS HIGH COURT HAS HELD IN THE CASE OF CAPLIN POINT LABORATORIES LTD. 293 ITR 524 THAT BY REJECTION OF ASSESSEE'S CLAIM BY RELYING ON DIFFERENT INTERPRETA TION IT COULD NOT BE SAID THAT PARTICULARS OF INCOME HAD BEEN CONCEALED. THE DECIS ION OF DELHI HIGH COURT IN CIT VS. EICHER GOODEARTH LTD. REPORTED IN 170 TAXMAN 2 7 (DEL) WHEREIN IT WAS HELD THAT THERE IS NO JUSTIFICATION TO LEVY PENALTY WHEN THE AO HAD NOT FOUND PARTICULARS FURNISHED BY THE ASSESSEE TO BE FALSE AND HAD ALSO NOT UNEARTHED ANY MATERIAL FACTS OR PARTICULARS WHICH ASSESSEE HAD NOT DISCLOSED IS SQUARELY APPLICABLE TO THE FACTS OF THE CASE OF THE APPELLANT AS THE PARTICULARS FURNI SHED BY THE APPELLANT HAVE NOT BEEN FOUND TO BE FALSE BY THE A.O. CONSIDERING THE FACT S OF THE CASE AND THE DETAILED SUBMISSION ALONG WITH THE JUDGMENTS AS RELIED UPON BY THE A.R. OF THE APPELLANT I AM OF THE OPINION THAT THE PENALTY FOR CONCEALMENT CANNOT BE LEVIED IN THE CASE OF THE APPELLANT MERELY ON THE BASIS OF ADDITIONS MAD E WHICH HAVE BEEN CONFIRMED BY THE CIT (APPEALS) ON CAREFUL CONSIDERATION OF THE SUBMISSIONS OF THE AR I CONCLUDE THAT THERE IS NO MALAFIDE INTENTION ON THE PART OF THE APPELLANT TO CLAIM EXCESS DEDUCTION U/S. 80IA AS ITS TAXABILITY IS NO T AFFECTED BY DISALLOWANCE ITS INCOME HAVING BEEN ASSESSED ON BOOK PROFIT U/S. I15 JB AND FURTHER THE APPELLANT HAD A BONAFIDE BELIEF THAT VALUE OF UNIT OF ELECTRICITY GENERATED SHOULD BE DETERMINED AT COMMERCIAL RATE OF RS. 5.22 PER UNIT AND FURTHER B OTH THE ISSUES BEING DEBATABLE ISSUES IT CANNOT BE HELD THAT THE APPELLANT HAS FU RNISHED INACCURATE PARTICULARS OF ITS INCOME. RATHER APPELLANT'S CLAIM OF DEDUCTION U /S. 80IA COMPUTED IN A PARTICULAR MANNER HAS BEEN REJECTED. IN VIEW OF THE ABOVE I D IRECT THE AO TO DELETE THE PENALTY LEVIED IN THIS CASE TO THE TUNE OF RS.57 15 119/-. 4 ITA NOS . 3615-AHD-2008 & 3616-AHD-2008 4. IN THE ASSESSMENT YEAR 2004-05 ALSO THE ASSESSI NG OFFICER LEVIED THE PENALTY UNDER SECTION 271(1)(C) AMOUNTING TO RS.2 17 52 430/- IN RESPECT OF ADDITION MADE BY DISALLOWING EXCESS CLAIM OF DEDUCTION UNDER SECTION 80IA ON ACC OUNT OF ELECTRICITY CHARGES TO THE TUNE OF RS.6 06 33 959/-. APART FROM THIS THE ASSESSING OF FICER OBSERVED THAT THE ASSESSEE-COMPANY HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME BY C LAIMING EXCESSIVE DEDUCTION UNDER SECTION 80IA IN RESPECT OF CAPTIVE POWER PLANT (HEREINAFTER REFERRED AS CPP). BOTH THESE ADDITIONS WERE CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) VIDE ORDER DATED 10.07.2006 THEREFORE HE LEVIED THE PENALTY UNDER SECTION 271( 1)(C) IN RESPECT OF BOTH THE DISALLOWANCES. FOR THIS YEAR ALSO THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN THE IMPUGNED ORDER DATED 12.08.2008 CANCELLED THE PENALTY FOR THE DETAILED R EASONS GIVEN IN PARA 2.3 & 2.4 WHICH IS REPRODUCED HEREUNDER :- 2.3. I HAVE CONSIDERED THE FACTS OF THE CASE AS W ELL AS THE SUBMISSIONS AS ADVANCED BY THE A.R. OF THE APPELLANT THE APPELLANT HAD CLAIMED THE DEDUCTION U/S. 80IA @ 100% OF INCOME OF CPP TO THE TIME OF RS. 31 55 91 660/-. UL TIMATELY THE AO ALLOWED THE DEDUCTION U/S. 80IA TO THE TUNE OF RS. 25 49 57 701/-. IT IS SEEN THAT THE ADDITION OF RS. 6 06 33 959/- HAS BEEN MADE BY THE AO BY WAY OF ESTIMATING THE MA RKET VALUE OF UNIT OF ELECTRICITY GENERATED BY CAPTIVE POWER PLANT AT THE RATE OF RS. 5.21 PER UNIT AS AGAINST THE VALUATION MADE BY THE APPELLANT AT RS. 5.57 PER UNIT AND THER EBY THE INCOME OF ELIGIBLE UNIT I.E. CPP HAS BEEN REDUCED BY R$. 6 06 33 959/-. THE A.O. OBS ERVED THAT THE APPELLANT HAS INCLUDED THE ELECTRICITY DUTY CHARGED BY THE GEB ON BEHALF O F THE STATE GOVT. ON PURCHASE OF ELECTRICITY FROM STATE GOVT. HOWEVER AS THE ELECTR ICITY CONSUMED BY THE APPELLANT WAS GENERATED FROM ITS CPP NO ELECTRICITY DUTY WAS CHA RGED BY THE STATE GOVT. ACCORDINGLY THE AO WORKED OUT THE RATE OF ELECTRICITY @ RS. 5.2 1 PER UNIT BY EXCLUDING THE AMOUNT OF ELECTRICITY DUTY. THE APPELLANT HAS CLAIMED BEFORE THE A.O AS WELL AS THE C1T (APPEALS) THAT THE VALUATION OF ELECTRICITY GENERATED FROM CP P SHOULD BE CONSIDERED AT THE MARKET VALUE I E THE PRICE THAT SUCH GOODS OR SERVICES W OULD ORDINARILY FETCH IN THE OPEN MARKET. IN SUPPORT OF ITS CONTENTIONS THE APPELLANT HAS RE LIED UPON VARIOUS DECISIONS BUT THE A O. REJECTED THE CLAIM OF THE APPELLANT AND RECOMPUTED THE MARKET VALUE OF UNIT OF ELECTRICITY GENERATED OUT OF CPP AT RS. 5.21 PER UNIT. THE A.R. OF THE APPELLANT HAS STRONGLY CONTENDED THAT THE APPELLANT HAS FURNISHED ALL THE RELEVANT DETAILS NECESSARY FOR QUANTIFYING THE DEDUCTION CLAIMED U/S. 80IA AND THE DISALLOWANCE IS THE RESULT OF A DIFFERENT METHOD ADOPTED BY THE A.O FOR WORKING OUT THE MARKET VALUE OF UNIT OF ELECTRICITY GENERATED. IN FACT BEFORE THE A.O THE APPELLANT HA S CLAIMED VIDE LETTER DT. 6/12/2005 IN RESPONSE TO SHOW CAUSE NOTICE ISSUED DURING THE ASS T PROCEEDINGS THAT THE UNIT COST OF ELECTRICITY HAS BEEN WORKED OUT ON THE BASIS OF MAR KET VALUE I.E. THE PRICE PAID BY THE CONSUMER AND THE RATE OF ELECTRICITY WAS WORKED OUT NOT ARBITRARILY BUT ON THE BASIS OF ACTUAL ELECTRICITY BILLS AS PER THE DETAILS GIVEN B Y THE APPELLANT BEFORE THE AO. THE AR ALSO CONTENDED THAT THE UNIT COST OF ELECTRICITY PRODUCE D WAS COMPUTED UNDER A BONAFIDE BELIEF THAT THE MARKET VALUE SHOULD BE RS. 5.57 PER UNIT A ND THAT THERE WAS NO MALAFIDE INTENTION ON THE PART OF THE APPELLANT. IT WAS CONTENDED THAT THE COMPUTATION OF UNIT COST HAS BEEN DONE AT THE COMMERCIAL RATE. THE APPELLANT HAS ALSO SUBMITTED THAT THE DISALLOWANCE MADE BY THE AO U/S. 801A IS A DEBATABLE ISSUE AND IT HAS CHALLENGED THE ORDER OF CIT(A) BEFORE 5 ITA NOS . 3615-AHD-2008 & 3616-AHD-2008 THE TRIBUNAL. FURTHER WHAT IS THE VALUE OF UNIT OF ELECTRICITY TO BE ADOPTED IS A MATTER OF TWO OPINIONS AS HELD IN FOLLOWING TWO DECISIONS:- (III) WEST COAST PAPER MILLS LTD. VS.- JCIT (100 TTJ 833 (MUM.) WHEREIN THE TRIBUNAL DIRECTED THAT PROFITS BE WORKE D OUT ON THE BASIS OF THE PRICE OF THE POWER GENERATED BY THE ASSESSEE AT AVE RAGE OF ANNUAL LANDED COST OF ELECTRICITY PURCHASED FROM KARNATAKA STATE ELECTRIC ITY BOARD. (IV) WEST COAST PAPER MILLS LTD. VS. ACIT (105 TTJ 344) (MUM) IT WAS HELD THAT TRANSFER PRICE HAS TO BE WORKED OU T ON THE BASIS OF AVERAGE PRICE PAID BY THE ASSESSEE DURING THE WHOLE YEAR TO SLATE ELECTRICITY BOARD MINUS EXTRANEOUS CHARGES SUCH AS ELECTRICITY DUTY ETC. THUS THERE ARE TWO OPINIONS ON WORKING OF THE AVER AGE PRICE OF POWER GENERATED BY AN ASSESSEE. HENCE ADOPTION OF VALUE OF UNIT RATE OF ELECTRICITY IS A DEBATABLE ISSUE. 2.4. IT HAS ALSO BEEN STATED THAT THE DISALLOWANCE MADE IN RESPECT OF DEDUCTION U/S. 80IA HAS NOT AFFECTED ITS INCOME AND ITS TAX LIABILITY F OR THE YEAR UNDER CONSIDERATION AS THE TAX LIABILITY HAS BEEN CALCULATED ON THE BASIS OF BOOK PROFIT U/S. 115JB OF THE ACT. THE DECISION RELIED ON BY THE APPELLANT IN THE CASE OF GUJARAT C REDIT CORPORATION LTD. (ITAT A'BAD SPL. BENCH) REPORTED IN 302 ITR (AT) 250 SUPPORTS THE CL AIM OF THE APPELLANT THAT MERE REJECTION OF ASSESSEE'S CLAIM OF LOSS ON A DIFFERENT GROUND BY T HE APPELLATE AUTHORITY CANNOT BE EQUATED WITH CONCEALMENT. IN THE INSTANT CASE IT IS FOUND THAT A DIFFERENT VIEW HAS BEEN TAKEN BY THE AO WHILE REJECTING THE CLAIM OF THE APPELLANT FOR C ALCULATING THE MARKET VALUE OF UNIT OF ELECTRICITY PRODUCED IN CPP FOR WORKING OUT THE INC OME OF CPP AND ALSO ON NON GRANTING OF DEDUCTION U/S. 80IA ON INTEREST INCOME. THERE IS NO CONSCIOUS/DELIBERATE ATTEMPT TO CONCEAL ANY INCOME ON THE PART OF THE APPELLANT. IN FACT SI MILAR CLAIM ON THE BASIS OF MARKET VALUE OF UNIT OF ELECTRICITY HAS BEEN ALLOWED BY THE AO U/S. 80IA IN A.Y. 2001-02. I ALSO FIND THAT HON. MADRAS HIGH COURT HAS HELD IN THE CASE OF CAPLIN PO INT LABORATORIES LTD. 293 ITR 524 THAT BY REJECTION OF ASSESSEE'S CLAIM BY RELYING ON DIFF ERENT INTERPRETATION IT COULD NOT BE SAID THAT PARTICULARS OF INCOME HAD BEEN CONCEALED. THE DECIS ION OF DELHI HIGH COURT IN CIT VS. EICHER GOODEARTH LTD. REPORTED IN 170 TAXMAN 27 (DEL) WHE REIN IT WAS HELD THAT THERE IS NO JUSTIFICATION TO LEVY PENALTY WHEN THE AO HAD NOT F OUND PARTICULARS FURNISHED BY THE ASSESSEE TO BE FALSE AND HAD ALSO NOT UNEARTHED ANY MATERIAL FACTS OR PARTICULARS WHICH ASSESSEE HAD NOT DISCLOSED IS SQUARELY APPLICABLE TO THE FACTS O F THE CASE OF THE APPELLANT AS THE PARTICULARS FURNISHED BY THE APPELLANT HAVE NOT BEEN FOUND TO B E FALSE BY THE A.O. CONSIDERING THE FACTS OF THE CASE AND THE DETAILED SUBMISSION ALONG WITH THE JUDGMENTS AS RELIED UPON BY THE A.R. OF THE APPELLANT I AM OF THE OPINION THAT THE PENALTY FOR CONCEALMENT CANNOT BE LEVIED IN THE CASE OF THE APPELLANT MERELY ON THE BASIS OF ADDITIONS MADE WHICH HAVE BEEN CONFIRMED BY THE CIT (APPEALS) ON CAREFUL CONSIDERATION OF THE SUBMISSI ONS OF THE AR I CONCLUDE THAT THERE IS NO MALAFIDE INTENTION ON THE PART OF THE APPELLANT TO CLAIM EXCESS DEDUCTION U/S. 80IA AS ITS TAXABILITY IS NOT AFFECTED BY DISALLOWANCE ITS INC OME HAVING BEEN ASSESSED ON BOOK PROFIT U/S. I15JB AND FURTHER THE APPELLANT HAD A BONAFIDE BELI EF THAT VALUE OF UNIT OF ELECTRICITY GENERATED SHOULD BE DETERMINED AT COMMERCIAL RATE OF RS. 5.57 PER UNIT AND FURTHER THE ISSUE BEING DEBATABLE ONE IT CANNOT BE HELD THAT THE APPELLANT HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME. RATHER APPELLANT'S CLAIM OF DEDUCTION U/S. 80IA COMPUTED IN A PARTICULAR MANNER HAS BEEN REJECTED . IN VIEW OF THE ABOVE I DIRECT THE AO TO DELETE THE PENALTY LEVIED IN THIS CASE TO THE TUNE OF RS. 2 17 52 430/-. 6 ITA NOS . 3615-AHD-2008 & 3616-AHD-2008 AGGRIEVED WITH THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FOR BOTH THE YEARS CANCELLING THE PENALTY LEVIED UNDER SECTION 271(1)( C) THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE OUTSET SHRI S.N. DIVETIA LD. COUNSEL AP PEARING ON BEHALF OF THE ASSESSEE POINTED OUT THAT WHEN ASSESSING OFFICER LEVIED THE PENALTY UNDER SECTION 271(1)(C) FOR BOTH THE ASSESSMENT YEARS UNDER APPEAL ON 25.03.2008 AND LEA RNED COMMISSIONER OF INCOME TAX(APPEALS) PASSED THE IMPUGNED ORDERS ON 12.08.20 08 THE QUANTUM APPEAL OF THE ASSESSEE FOR BOTH THE ASSESSMENT YEARS WAS PENDING BEFORE THE TR IBUNAL. THE ITAT A BENCH AHMEDABAD IN ASSESSEES APPEAL IN ITA NO. 2072/AHD/2006 FOR T HE ASSESSMENT YEAR 2003-04 HELD THAT THE ASSESSEE IS ENTITLED THE BENEFIT OF NETTING OFF INT EREST EXPENDITURE WITH THE INTEREST INCOME EARNED TO THE EXTENT THE ASSESSEE ESTABLISHED THE NEXUS. T HE ISSUE REGARDING MARKET RATE OF ELECTRICITY SUPPLIED BY CPP UNIT TO GENERAL UNIT WAS ALSO CONTE STED IN FAVOUR OF THE ASSESSEE. FOR THE ASSESSMENT YEAR 2004-05 ALSO THE ADDITION ON THE B ASIS OF WHICH PENALTY IS LEVIED BY THE ASSESSING OFFICER HAS BEEN DELETED BY THE ITAT A BENCH AHMEDABAD IN ITA NO. 2073/AHD/2006 FOR THE ASSESSMENT YEAR 2004-05. ON T HE BASIS OF THE TRIBUNALS ORDER IN QUANTUM APPEAL THE LD. COUNSEL OF THE ASSESSEE POI NTED OUT THAT THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CANCELLING THE PENALTY FOR BOTH THE ASSESSMENT YEARS UNDER SECTION 271(1)(C) BE UPHELD. 6. ON THE OTHER HAND SHRI ANIL KUMAR LD. CIT(D.R. ) APPEARING ON BEHALF OF THE REVENUE CONTENDED THAT THE ASSESSING OFFICER BE RE-DIRECTED TO RE-COMPUTE THE PENALTY UNDER SECTION 271(1)(C) ON INCOME FINALLY ASSESSED AFTER GIVING A PPEAL EFFECT TO THE ORDER OF TRIBUNAL IN QUANTUM APPEAL IN ITA NOS. 2072 & 2073/AHD/2006 FOR THE ASSESSMENT YEAR 2003-04 & 2004- 05 RESPECTIVELY. 7. IN REJOINDER THE LD. COUNSEL OF THE ASSESSEE RE LIED ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCT S PVT. LTD. REPORTED IN 322 ITR 158 (SC) AND CONTENDED THAT KEEPING IN VIEW THE RATIO OF THI S DECISION PENALTY UNDER SECTION 271(1)(C) IN RESPECT OF ADDITION IF ANY WHICH IT WILL REMAIN IS NOT LEVIABLE. 7 ITA NOS . 3615-AHD-2008 & 3616-AHD-2008 8. WE HAVE GIVEN OUR CAREFUL CONSIDERATION TO THE R IVAL SUBMISSIONS MADE BEFORE US AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW AS WEL L AS THE DECISION OF ITAT A BENCH AHMEDABAD IN QUANTUM APPEAL IN ITA NO. 2072/AHD/200 6 FOR THE ASSESSMENT YEAR 2003-04 WHICH IS RELIED BY THE LEARNED COMMISSIONER OF INCO ME TAX(APPEALS). IT IS PERTINENT TO NOTE THAT ITAT IN QUANTUM APPEAL HAS VIRTUALLY RESTORED THE I SSUE REGARDING QUANTUM OF EXCLUSION OF INTEREST TO THE FILE OF ASSESSING OFFICER. HOWEVER THE ADDITION MADE ON EXCESSIVE DEDUCTION CLAIMED UNDER SECTION 80IA IN RESPECT OF CAPTIVE PO WER PLANT HAS BEEN DELETED. BE THAT IT MAY BE WE ARE OF THE VIEW THAT IN RESPECT OF BOTH THE ADDITIONS PENALTY UNDER SECTION 271(1)(C) IS NOT LEVIABLE KEEPING IN VIEW THE RATIO OF JUDGMENT OF T HE HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LIMITED. THE HON'BLE S UPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) WHILE CANCELLING THE PEN ALTY HELD THAT MAKING INCORRECT CLAIM DOES NOT AMOUNT TO CONCEALMENT OF PARTICULARS OF INCOME. T HE HEAD-NOTES OF THE SAID DECISION READS AS UNDER :- 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 H AS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY THE ASSESSEE MUST HAVE FURNISHED 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 GIVEN IN THE RETURN IS F OUND TO BE INCORRECT OR INACCURATE THE ASSESSEE CANNOT BE HELD GUILTY OF F URNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PEN ALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION THE PENALTY PROVISION CAN NOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUN T TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHIN G WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE BECAUSE THAT IS THE ONLY DOC UMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PA RTICULARS ARE FOUND TO BE INACCURATE THE LIABILITY WOULD ARISE. TO ATTRACT P ENALTY 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 SUPPLIE D BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FA LSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MER E MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. S UCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS . 8 ITA NOS . 3615-AHD-2008 & 3616-AHD-2008 9. IN VIEW OF THE FOREGOING THE VIEW TAKEN BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CANCELLING THE PENALTY LEVIED BY THE ASSE SSING OFFICER FOR BOTH THE ASSESSMENT YEARS IS UPHELD AND THE GROUND RAISED BY THE REVENUE IN ITS APPEALS IS DISMISSED. 10. IN THE RESULT BOTH THE APPEALS FILED BY THE RE VENUE ARE DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 21.01.20 11 SD/- SD/- (A.N. PAHUJA) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 21/ 01 / 2011 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A.) CONCERNED (4) CIT CONCERNED (5) D.R. ITAT AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGI STRAR ITAT AHMEDABAD LAHA/SR.P.S.