ITO, Noida v. M/s. Advance Values Global, Noida

ITA 5486/DEL/2011 | 2005-2006
Pronouncement Date: 31-07-2013 | Result: Dismissed

Appeal Details

RSA Number 548620114 RSA 2011
Assessee PAN AAIFA4845M
Bench Delhi
Appeal Number ITA 5486/DEL/2011
Duration Of Justice 1 year(s) 7 month(s) 23 day(s)
Appellant ITO, Noida
Respondent M/s. Advance Values Global, Noida
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 31-07-2013
Date Of Final Hearing 10-10-2012
Next Hearing Date 10-10-2012
Assessment Year 2005-2006
Appeal Filed On 08-12-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A : NEW DELHI BEFORE SHRI A.D. JAIN JUDICIAL MEMBER AND SHRI T.S. KAPOOR ACCOUNTANT MEMBER ITA NO.5486/DEL/2011 ASSESSMENT YEAR : 2005-06 ITO WARD 1(1) NOIDA G-BLOCK SHOPPING COMPLEX SECTOR 20 NOIDA. VS. ADVANCE VALVES GLOBAL B-33 SECTOR-2 NOIDA. PAN : AAIFA4845M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AJAY VOHRA & SHRI ROHIT JAIN ADVOCATES REVENUE BY : MRS. ANURADHA MISRA CIT DR ORDER PER A.D. JAIN JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE DEPARTMENT FOR ASSESSMENT YEAR 2005-06 AGAINST THE ORDER DATED 06.09.2011 PASSED BY T HE CIT (A) GHAZIABAD CONTENDING THAT THE LD. CIT (A) HAS ERRED IN HOLDING THAT PENALTY U/S 271 (1)(C) OF THE IT ACT ON THE ISSUE OF W RONG CLAIM OF DEDUCTION U/S 80IC OF THE ACT AMOUNTING TO ` 2 67 90 071/- IS NOT TENABLE WHEREAS THE DISALLOWANCE MADE ON THIS ACCOUNT IN THE ASSESSMENT PROCEEDINGS WAS CONFIRMED BY THE LD. CIT (A) GHAZIABAD. 2. IN THE RETURN FILED FOR THE YEAR UNDER CONSIDERAT ION THE ASSESSEE CLAIMED DEDUCTION U/S 80IB OF THE ACT. LATER THE R ETURN WAS REVISED CLAIMING DEDUCTION U/S 80IC INSTEAD OF U/S 80IB AS OR IGINALLY CLAIMED. VIDE ORDER DATED 31.12.2007 PASSED U/S 143 (3) OF THE ACT THE ITA NO.5486/DEL/2011 2 ASSESSMENT WAS COMPLETED AT ` 2 70 24 920/-. THE APPEAL OF THE ASSESSEE WAS DISMISSED BY THE CIT (A). 3. THE FACTS AS AVAILABLE FROM THE RELEVANT DOCUMEN TS AND ORDERS ON RECORD ARE THAT THE ASSESSEE FIRM WAS FORMED ON 28.05 .2003 BY SHRI UMA SHANKAR SHRI PRANAY SHANKER GARG AND M/S ADVANC E VALVES PVT. LTD. (THE PRESENT ASSESSEE). THE FIRM SET UP A 100% EOU IN SEZ AREA IN THE NAME AND STYLE OF M/S ADVANCE VALVES GLOBAL. T HIS UNIT WAS ENGAGED IN THE BUSINESS OF MANUFACTURE OF INDUSTRIAL VA LVES. IT STARTED MANUFACTURE/PRODUCTION FROM F.Y. 2003-04. THE ASSESSE E FIRM HAD ALSO ACQUIRED THROUGH A SLUMP SALE A PROPRIETORSHIP CONCERN OF ONE OF THE PARTNERS SHRI PRANAY SHANKER GARG. THIS PROPRIETORSH IP CONCERN CALLED ADVANCE VALVES COMPANY WAS LOCATED IN GAGRET DISTRIC T UNA HP. ADVANCE VALVES COMPANY WAS ENGAGED IN THE MANUFACTUR E OF VALVES. IT STARTED OPERATIONS FROM 20.09.1999 AND WAS CLAIMIN G DEDUCTION U/S 80IB OF THE ACT. DURING THE YEAR UNDER CONSIDERATIO N THE ASSESSEE FIRM CLAIMED EXEMPTIONS U/S 10A OF THE ACT ON THE PR OFIT OF THE BUSINESS OF THE SEZ UNIT I.E. M/S ADVANCE VALVES GLOB AL AND DEDUCTION U/S 80IB OF THE ACT ON THE PROFIT OF THE B USINESS OF THE GAGRET UNIT I.E. ADVANCE VALVES COMPANY IN THE ORIGINAL R ETURN. HOWEVER IN THE REVISED RETURN THE ASSESSEE CLAIMED DEDUCTION U/S 80 IC OF THE ACT ON THE PROFIT OF THE GAGRET UNIT I.E. M/S ADVANCE VALVES COMPANY SHOWING TOTAL SALES AMOUNTING TO ` 7 01 68 508/- AND NET PROFIT OF ` 2 67 90 071/-. THE ASSESSING OFFICER NOTICED FROM THE AUDIT REPORT THAT THE DATE OF COMMENCEMENT OF OPERATION OF ADVANCE VA LVES COMPANY WAS 20.09.1999 AND THAT ASSESSMENT YEAR 2005-06 (THE YEA R UNDER CONSIDERATION) WAS THE INITIAL YEAR FROM WHICH DEDUCT ION U/S 80IC OF THE ACT WAS BEING CLAIMED. 4. ON QUERY THE ASSESSEE SUBMITTED THAT DEDUCTION U/S 8 0IB OF THE ACT WAS CLAIMED IN RESPECT OF THE PROFIT DERIVED FRO M THE INDUSTRIAL ITA NO.5486/DEL/2011 3 UNDERTAKING LOCATED AT GAGRET DISTRICT UNA HP I.E . ADVANCE VALVES COMPANY; THAT THE SAID UNIT WAS FORMED ON 28.12.1999 IN A BACKWARD AREA; THAT IT WAS NOT FORMED BY SPLITTING UP OR RECON STRUCTION OF A BUSINESS ALREADY IN EXISTENCE; THAT IT WAS NOT FORMED BY TRANSFER TO THE NEW UNIT ALL MACHINERY OR PLANT PREVIOUSLY USED FOR IN BUSINESS; THAT THE UNIT MANUFACTURED ARTICLES OR THINGS NOT SPECIFIED IN THE LIST GIVEN IN THE 11 TH SCHEDULE OF THE ACT; THAT THE UNIT EMPLOYED TEN OR MORE WORKERS IN ITS MANUFACTURING PROCESS WHICH WAS CARRIED ON WITH THE AID OF POWER; THAT AS SUCH THE MANDATORY CONDITIONS U /S 80IB OF THE ACT WERE DULY COMPLIED WITH; THAT DURING THE YEAR SUCH COMPLIANCE WAS FAITHFULLY CONTINUED; THAT SUBSTANTIAL EXPANSION W AS UNDERTAKEN DURING THE PERIOD FROM 07.01.2003 TO 31.03.2005 BE ING MORE THAN 5%; THAT THEREFORE THE UNIT WAS ELIGIBLE FOR DEDUCTION OF 100% OF THE PROFIT DERIVED U/S 80IC OF THE ACT FOR THE YEAR UNDER CONSI DERATION AS WELL NOTWITHSTANDING ITS TRANSFER TO THE ASSESSEE FIRM BY SHRI PRANAY SHANKER GARG W.E.F. 01.04.2003. THE ASSESSEE ALSO FILE D A COPY OF THE ORDER DATED 24.07.2006 PASSED BY THE COMMISSIONER (APP EALS) CUSTOMS & CENTRAL EXCISE WHEREBY SUBSTANTIAL EXPANSION FOR EXCISE DUTY PURPOSES WAS HELD TO HAVE BEEN UNDERTAKEN. 5. IN THE ASSESSMENT ORDER THE ASSESSING OFFICER OBSERVED T HAT THE ORDER DATED 24.07.2006 PASSED BY THE CIT (A) CUSTOMS AND CENTRAL EXCISE WAS NOT RELEVANT SINCE FOR CENTRAL EXCISE BENE FITS SUBSTANTIAL EXPANSION IS CONSIDERED FOR THE PURPOSE OF INCREASE IN P RODUCTION WHEREAS ACCORDING TO THE IT ACT THE INCREASE IN VALU E SHOULD BE MORE THAN 50% AND THE MACHINERY SHOULD NOT BE OLD. IT W AS OBSERVED THAT THE GAGRET UNIT OF THE ASSESSEE FIRM WAS FORMED BY TRANSF ER TO A NEW BUSINESS ALL MACHINERY OR PLANT WHICH WAS PREVIOUSLY B EING USED IN THE BUSINESS RUN BY SHRI PRANAY SHANKER GARG DEDUCTIO N U/S 80IC OF THE ACT WAS NOT AVAILABLE IN RESPECT OF THE GAGRET UN IT. THE ASSESSING ITA NO.5486/DEL/2011 4 OFFICER AS SUCH DISALLOWED DEDUCTION CLAIMED OF ` 2 67 90 071/- U/S 80IC OF THE ACT. 6. THE ASSESSING OFFICER FURTHER OBSERVED THAT DURING TH E YEAR THE SEZ UNIT OF THE ASSESSEE I.E. M/S ADVANCE VALVES GLOBA L HAD MADE SALE OF ` 24 45 589/- TO M/S UNS ENTERPRISES A SISTER CONCERN; T HAT IN THE AUDITORS REPORT THE ARMS LENGTH PRICE OF THE SA ID TRANSACTION HAD BEEN COMPUTED AT ` 22 98 584/-. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE BASIS OF WORKING OUT THE ARMS LEN GTH PRICE AS ALSO TO EXPLAIN AS TO WHY IN ACCORDANCE WITH SECTION 10A (7) READ WITH SECTION 80IA(10) OF THE ACT THE DIFFERENCE OF ` 1 46 735/- BE NOT TREATED AS THE ASSESSEES INCOME NOT BEING PROFIT ELIGIB LE FOR EXEMPTION U/S 10A OF THE ACT. THE ASSESSEE MAINTAINED T HAT IT WAS CHARGING THE SAME AMOUNT FROM ITS RELATED CONCERN AS WAS BEING CHARGED FROM OTHER CUSTOMERS. THE ASSESSING OFFICER HOW EVER DID NOT FIND THE INVOICES OF THE RELATED CONCERN I.E. UNS ENTERPRISES AND OF OTHER CUSTOMERS TO BE COMPARABLE SINCE THE INVOIC E OF UNS ENTERPRISES WAS OF A DIFFERENT FINANCIAL YEAR AND EVEN THEREIN IN ONE CASE THE PRICE CHARGED FROM UNS ENTERPRISES WAS EQUAL TO THAT CHARGED FROM RELATED CUSTOMERS EVEN AFTER A GAP OF AL MOST ONE YEAR AND THREE MONTHS. THE ASSESSING OFFICER THUS HELD THAT OUT OF THE SAID TRANSACTION WITH M/S UNS ENTERPRISES THE AMOUNT O F ` 1 46 735/- WAS BEING TREATED AS TAXABLE INCOME OF THE ASSESSEE BEIN G PROFIT NOT ELIGIBLE FOR EXEMPTION. THE ASSESSEE HAD CLAIMED EXEMP TION OF ` 36 03 379/- IN RESPECT OF ITS SEZ UNIT U/S 10A OF TH E ACT. THE ASSESSING OFFICER HOWEVER HELD AN AMOUNT OF ` 34 56 644/- TO BE EXEMPT U/S 10A REVISING THE AMOUNT OF ` 1 46 735/- AS NOT ELIGIBLE FOR EXEMPTION U/S 10A OF THE ACT. 7. THE LD. CIT (A) CONFIRMED THE ASSESSMENT ORDER ON B OTH THE COUNTS REJECTING THE APPEAL FILED BY THE ASSESSEE. ITA NO.5486/DEL/2011 5 8. IN THE PENALTY PROCEEDINGS APROPOS THE ISSUE OF DE DUCTION U/S 80IC OF THE ACT THE ASSESSEE CONTENDED THAT IN THE QUA NTUM APPEAL THE CIT (A) BY FOLLOWING HIS ORDER FOR ASSESSMENT YEAR 2004-05 UPHELD THE CONTENTION OF THE ASSESSEE THAT IN ASSESSMENT YEAR 2004 -05 ALSO THE ASSESSEE HAD FULFILLED ALL THE STATUTORY REQUIREMENT S U/S 80IC OF THE ACT AND THE BENEFIT OF EXEMPTION U/S 80IC WAS THUS A VAILABLE TO THE ASSESSEE; THAT HOWEVER THE CLAIM OF THE ASSESSEE HAD BEEN DISALLOWED BY THE CIT (A) FOR THE ALLEGED REASON THAT DURING ASSESSMENT YEAR 2005-06 THE ASSESSEE HAD NOT ADDED TO THIS PLANT AND MACHINERY TO THE EXTENT OF AT LEAST 50% OF ITS V ALUE AS ON 31.03.2004; AND THAT THUS EXPANSION OF THE UNIT BY W AY OF INCREASE DURING F.Y. 2004-05 IN THE PLANT AND MACHINERY VAL UED AT LEAST TO THE EXTENT OF 50% OF ITS VALUE AS ON 01.04.2004 HAD NOT BEEN DONE BY THE ASSESSEE BY 31.03.2005; THAT SUCH CONCLUSION ARRIVED AT BY THE CIT (A) WAS CONTRARY TO THE PROVISIONS OF SECTION 80IC (2) (A) (II) AND 80IC (3) (II) READ WITH SECTION 80IC (8) (V) (IX); THAT SECT ION 80IC (2) (A) (II) APPLIED TO THE ASSESSEE SINCE ITS INDUSTRIAL UNIT AT GAGR ET HAD BEGUN UNDERTAKING SUBSTANTIAL EXPANSION DURING THE PERIOD BE GINNING ON 07.01.2003; THAT SECTION 80IC (3) (II) MADE THE ASSESSE E ELIGIBLE FOR 100% DEDUCTION IN ASSESSMENT YEAR 2005-06 WHICH WAS THE INITIAL ASSESSMENT YEAR AS PER THE DEFINITION OF THE TERM INIT IAL YEAR CONTAINED IN SECTION 80IC (8) (V) ACCORDING TO WHI CH INITIAL ASSESSMENT YEAR MEANS THE ASSESSMENT YEAR RELEVANT TO THE P REVIOUS YEAR IN WHICH THE UNDERTAKING OR ENTERPRISE BEGINS TO MANUFACTURE OR PRODUCE ARTICLES OR THINGS OR COMMENCES OPERATION OR C OMPLETES SUBSTANTIAL EXPANSION; THAT SINCE THE ASSESSEE HAD COMPLET ED SUBSTANTIAL EXPANSION DURING F.Y. 2004-05 RELATING TO ASSESSMENT YEAR 2005-06 ASSESSMENT YEAR 2005-06 WAS ITS INITIAL ASSESSMENT Y EAR FOR CLAIM OF DEDUCTION U/S 80IC OF THE ACT; THAT AS PER S ECTION 80IC (8) (IX) SUBSTANTIAL EXPANSION MEANS INCREASE IN THE INVESTME NT IN THE PLANT & MACHINERY BY AT LEAST 50% OF THE BOOK VALUE OF THE PLANT & ITA NO.5486/DEL/2011 6 MACHINERY BEFORE DEDUCTING THE DEPRECIATION IN ANY YEAR AS ON THE FIRST DAY OF THE PREVIOUS YEAR IN WHICH SUBSTANTIAL EXP ANSION IS UNDERTAKEN; THAT THUS INCREASE IN THE VALUE OF PLANT & MACHINERY HAS TO BE TAKEN INTO ACCOUNT FROM THE FIRST DAY OF THE P REVIOUS YEAR IN WHICH THE SUBSTANTIAL EXPANSION HAS STARTED; THAT AS PER SECTION 80IC (8)(V) INITIAL ASSESSMENT YEAR MEANS THE YEAR IN WHICH SUBSTANTIAL EXPANSION IS COMPLETED; AND THAT THEREFORE THE INITI AL ASSESSMENT YEAR FOR CLAIM OF DEDUCTION IN THE CASE OF THE ASSESSEE WAS ASSE SSMENT YEAR 2005-06 AND SO THE CLAIM MADE BY THE ASSESSEE IN ACCORDANCE WITH LAW WAS ALLOWABLE. 9. VIDE ORDER DATED 31.03.2010 HOWEVER THE PENALT Y IN QUESTION WAS LEVIED ON THE ASSESSEE BY THE ASSESSING OFFICER HOLDIN G THAT THE ASSESSEE HAD FAILED TO PROVE THAT THE INVESTMENT IN PLAN T & MACHINERY DURING THE YEAR WAS LESS THAN 50% AND THE ASSESSEE HAD BE EN UNABLE TO FULFILL THE CONDITION FOR ENTITLEMENT TO DEDUCTI ON OF ` 2 67 90 071/- U/S 80IC OF THE ACT; THAT THE ASSESSEE HAD FURTHER CLA IMED WRONG EXEMPTION OF ` 1 46 735/- U/S 10A OF THE ACT FAILING TO FURNISH EV IDENCE TO PROVE THAT THE EXEMPTION HAD BEEN RIGHTLY CLAIME D; THAT THE ASSESSEE HAD FURNISHED AN EXPLANATION WHICH IT HAD NOT BEEN ABLE TO SUBSTANTIATE AND HAD FAILED TO PROVE THAT IT WAS BONA FIDE ; THAT THEREFORE EXPLANATION-1 OF SECTION 271 (1)(C) OF T HE ACT STOOD ATTRACTED; THAT THE ASSESSEE HAD THEREFORE CONCEALED THE PARTICULARS OF INCOME AMOUNTING TO ` 2 69 36 806/- ( ` 2 67 90 071/- + ` 1 46 735/-); THAT THE ADDITIONS MADE HAD ALSO BEEN CONFIRMED BY TH E CIT (A); AND THAT HENCE THE ASSESSEE WAS LIABLE FOR IMPOSITION OF PE NALTY U/S 271 (1)(C) OF THE ACT. THE ASSESSEE WAS DIRECTED TO PAY PEN ALTY OF ` 99 LACS. 10. BY VIRTUE OF THE IMPUGNED ORDER THE LD. CIT (A ) DELETED THE PENALTY IMPOSED BY THE ASSESSING OFFICER ON BOTH THE COU NTS. THE ITA NO.5486/DEL/2011 7 DEPARTMENT IS NOW IN APPEAL BEFORE US AGAINST THE ACT ION OF THE LD. CIT (A) IN DELETING THE PENALTY OF ` 2 67 90 071/-. 11. CHALLENGING THE IMPUGNED ORDER THE LD. DR HAS C ONTENDED THAT THE LD. CIT (A) HAS GONE WRONG IN DELETING THE PENAL TY OF ` 2 67 90 071/- LEVIED U/S 271 (1)(C) FOR A WRONG C LAIM OF DEDUCTION U/S 80IC OF THE ACT; THAT WHILE DOING SO THE LD. CIT (A ) HAS IGNORED THE FACT THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON THIS COUNT WAS CONFIRMED BY THE LD. CIT (A); THAT THE LD. CIT (A) HAS FAILED TO APPRECIATE THAT SINCE THE GAGRET UNIT OF THE ASSESSEE FI RM WAS FORMED BY TRANSFER TO A NEW BUSINESS OF MACHINERY OR PLANT PR EVIOUSLY USED IN THE BUSINESS RUN BY SHRI PRANAY SHANKER GARG THE ASSESSIN G OFFICER HAD CORRECTLY HELD THE ASSESSEE FIRM NOT ELIGIBLE FOR D EDUCTION U/S 80IC OF THE ACT IN RESPECT OF THE PROFIT OF ITS GAGRET UNI T; THAT THIS DISALLOWANCE HAD BEEN UPHELD BY THE LD. CIT (A); THA T THE LD. CIT (A) HAS FURTHER FAILED TO CONSIDER THAT THE ASSESSEE HAD NOT SWIFTLY COMPLIED WITH THE REQUIREMENT OF MAKING SUBSTANTIAL E XPANSION TO THE EXTENT OF 50% IN F.Y. 2004-05 RELEVANT TO THE YEAR UNDER CONSIDERATION OVER THE INVESTMENT IN PLANT & MACHINE RY AND SO THE ASSESSEE DID NOT QUALIFY FOR DEDUCTION U/S 80IC OF THE A CT ON THIS SCORE ALSO AS HELD BY THE ASSESSING OFFICER AND CONFIRMED BY T HE LD. CIT (A); THAT THE LD. CIT (A) ALSO FAILED TO APPRECIATE THAT THOUGH THE LD. CIT (A) IN THE QUANTUM APPEAL HAD HELD THAT DEDUCTION U/S 8 0IC OF THE ACT COULD NOT BE DENIED TO THE ASSESSEE ON THE FIRST GROUND TAKEN BY THE ASSESSING OFFICER I.E. THAT THE GAGRET UNIT OF THE ASSE SSEE FIRM WAS FORMED BY TRANSFER TO A NEW BUSINESS MACHINERY OR PLAN T PREVIOUSLY USED IN THE BUSINESS RUN BY SHRI PRANAY SHANKER GARG DISALLOWANCE OF DEDUCTION U/S 80IC WAS CONFIRMED BY THE LD. CIT (A) ON THE GROUND OF THE ASSESSEE NOT HAVING CARRIED OUT SUBSTANTIAL EXPANSION OF THE UNIT BY 31.03.2005 I.E. TO THE EXTENT OF 50% OF THE VA LUE OF THE PLANT & MACHINERY AS ON 01.04.2004; THAT THE LD. CIT (A) HAS ERRED IN FAILING TO ITA NO.5486/DEL/2011 8 CONSIDER THAT IT WAS IN THESE CIRCUMSTANCES THAT THE PE NALTY IN QUESTION WAS RIGHTLY IMPOSED ON THE ASSESSEE. THE LD. DR HAS PLACE D RELIANCE ON 162 ITR 481 (PATNA) 327 ITR 510 (DEL) AND 328 I TR 44 (DEL). 12. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER. IT HAS BEEN C ONTENDED THAT DEDUCTION U/S 80IB OF THE ACT WAS CLAIMED FOR THE PE RIOD FROM ASSESSMENT YEAR 2000-01 TO 31.10.2003; THAT THE UNIT WA S ACQUIRED AS A GOING CONCERN W.E.F. 01.11.2003; THAT FOR ASSESSMENT YEAR 2004-05 I.E. FROM 01.11.2003 TO 31.03.2004 THE CLAIM U/S 8 0IB OF THE ACT WAS DISALLOWED OBSERVING THAT THE UNIT HAD BEEN FORMED B Y SPLITTING UP/RE- CONSTRUCTION OF THE EARLIER BUSINESS; THAT THE LD. CIT (A) VIDE ORDER DATED 04.02.2008 (COPY AT APB 31-60); THAT THE TRIB UNAL VIDE ITS ORDER DATED 23.04.2010 (COPY AT APB 61-69) UPHELD THE CI T (A)S ORDER OBSERVING THAT IT WAS A CASE OF TRANSFER AND NOT OF SPLI TTING UP OR RE- CONSTRUCTION; THAT IN ASSESSMENT YEAR 2005-06 VIDE ORDE R DATED 31.12.2007 (COPY AT APB 70-75) THE ASSESSING OFFICER F OLLOWED THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2004-05 AND ORDERED DISALLOWANCE OF THE CLAIM U/S 80IC OF THE ACT AGAIN MAINTAINING THAT IT WAS A CASE OF SPLITTING UP/RE-CONSTRUCTION; THAT THE L D. CIT (A) VIDE ORDER DATED 05.02.2009 (COPY AT APB 100-136) DENIE D THE CLAIM OF THE ASSESSEE U/S 80IC OF THE ACT ON A NEW GROUND OBSERVING T HAT IT WAS NOT A CASE OF SPLITTING UP OR RE-CONSTRUCTION OF THE E ARLIER BUSINESS BUT THE ASSESSEE HAD FAILED TO COMPLY WITH THE CONDITIONS OF SECTION 80IC OF THE ACT INASMUCH AS THE INVESTMENT IN PLANT & MACHI NERY DURING THE YEAR UNDER CONSIDERATION WAS LESS THAN 50%; THAT THE ASSE SSEES ENTITLEMENT TO DEDUCTION U/S 80IB OF THE ACT IS NOT I N DISPUTE; THAT THE YEAR UNDER CONSIDERATION WAS THE SIXTH YEAR OF THE CL AIM; THAT SUBSTANTIAL EXPANSION WAS MADE IN THIS YEAR; AND THAT TH EREFORE THE ASSESSEE ENHANCED THE CLAIM. THE LD. COUNSEL FOR THE ASSE SSEE HAS REFERRED TO THE PROVISIONS CONTAINED IN SECTION 80IC (2) (A) (II) AND ITA NO.5486/DEL/2011 9 SECTION 80IC (8)(IX) AND (V). OUR ATTENTION HAS BEE N DRAWN TO THE SUPPLEMENTARY WRITTEN SUBMISSIONS FILED BY THE ASSESSEE BEFO RE THE LD. CIT (A) A COPY WHEREOF IS PLACED AT APB 184-233 . SPECIFIC ATTENTION HAS BEEN DRAWN TO PAGES 185-186 OF THE ASSESSEE S PAPER BOOK CONTAINING THE DETAILS OF THE ADDITIONS MADE TO THE PLANT & MACHINERY FOR EFFECTING EXPANSION FOR THE PERIOD FR OM 07.01.2003 TO 31.01.2005 SPANNING F.Y.S 2003-04 AND 2004-05. THEN ATTENTION HAS BEEN DRAWN TO PAGES 13-17 OF THE APB WHICH IS A COPY OF THE ASSESSEES TAR IN FORM 10CCB WHEREIN THE ASSESSEES CA CER TIFIED THAT THE UNDERTAKING SATISFIED THE CONDITIONS STIPULAT ED IN INTER ALIA SECTION 80IC OF THE ACT. ATTENTION HAS THEN BEEN D RAWN TO APB 143- 183 WHICH IS A COPY OF THE WRITTEN SUBMISSIONS DATED 08 .06.2011 FILED BY THE ASSESSEE BEFORE THE CIT (A) IN THE APPELLATE PR OCEEDINGS IN THE PENALTY MATTER AND TO PAGES 188-189 OF THE APB CONT AINING A SUMMARY OF THE CONTENTIONS RAISED BY THE ASSESSEE BEFORE THE LD. CIT (A) IN ITS SUPPLEMENTARY SUBMISSIONS DATED 03.08.2011. RE LIANCE HAS BEEN PLACED ON THE FOLLOWING CASE LAWS FOR THE PROPOSI TION THAT NO CONCEALMENT PENALTY IS LEVIABLE WHERE THE EXEMPTION IS CLAIMED ON THE BASIS OF CERTIFICATE ISSUED BY THE CA:- I) CIT VS. S. DHANABAI 309 ITR 268 (DEL); II) CIT VS. KAS MOVIE (P) LTD (ITA NO.793 OF 2011) (DEL ); III) CIT VS. DEEP TOOLS (P) LTD. 274 ITR 603 (P&H); IV) CIT VS. VED PARKASH LIKHI AND SONS (HUF) (ITA NO.458 OF 2010) (P&H); V) CIT VS. S.D. RICE MILLS 275 ITR 206 (P&H); VI) HCIL ARSSPL TRIVENI (JV) VS. ACIT (ITA NOS.4579 & 4580/DEL/2010) (DELHI ITAT); VII) ACIT VS. DSL SOFTWARE LTD. 147 TTJ 67; VIII) RUDOLPH STAUDINGER VS. ACIT (2007) 18 SOT 115; AND ITA NO.5486/DEL/2011 10 IX) ARISTOCRAT LUGGAGE LTD. VS. DCIT (ITA NO.6841/MUM/2 006) (MUMBAI ITAT). 13. IT HAS BEEN CONTENDED THAT BY PLACING RELIANCE O N CIT VS. ZOOM COMMUNICATION (P) LTD. 327 ITR 510 (DEL) (SUPRA) A ND CIT VS. ESCORTS FINANCE LTD. 328 ITR 44 (DEL) THE DEPARTMENT SEEK S TO CONTEND THAT IT IS NOT THE DEPARTMENTS ONUS TO ESTABLISH MENS REA IN A CASE LIKE THE PRESENT ONE; THAT THIS IS NOT THE ASSESSEES CASE AT ALL AND THE CASE LAW RELIED ON BY THE DEPARTMENT ARE ALL DIFFERENT ON FA CTS; THAT BOTH THESE CASE LAWS STAND DEALT WITH BY THE HONBLE DELHI HIGH C OURT VIDE ITS JUDGEMENT (COPY PLACED ON RECORD) DATED 19.07.2012 IN ITA NO.1190/2011 IN THE CASE OF CIT VS. SOCITEX REPOR TED IN 340 ITR 595 (DEL); AND THAT UNDER SIMILAR CIRCUMSTANCES IN PRICE WATERHOUSE COOPERS PVT. LTD. VS. CIT KOLKATA I IN CIVIL APPEA L NO.6924/2012 ARISING OUT OF SLP (C) NO.10700 OF 2009 VIDE ITS JUD GEMENT (COPY PLACED ON RECORD) DATED 25.092012 THE HONBLE HIGH COURT HAS HELD THAT ABSENCE OF DUE CARE DOES NOT MEAN THAT THE ASSESSEE IS GUILTY OF EITHER FURNISHING INACCURATE PARTICULARS OF ITS INCOM E OR OF ATTEMPTING TO CONCEAL ITS INCOME. 14. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE MA TERIAL ON RECORD. THE ISSUE BEFORE US IS AS TO WHETHER THE LD. CIT (A) HAS CORRECTLY DELETED THE PENALTY LEVIED ON THE ASSESSEE. THE FACTS HAVE BEEN ADVERTED TO ELABORATELY HEREINABOVE. HOWEVER TO REITERATE SUCCINCTLY IN THE ASSESSMENT PROCEEDINGS IT WAS HELD INTER ALIA THAT THE INDUSTRIAL UNDERTAKING AT GAGRET HAD BEEN FORMED BY SPLITTING UP/RE-CONSTRUCTION OF A BUSINESS ALREADY IN EXISTENCE. AS AGAINST THIS THE LD. CIT (A) HELD THAT THE ASSESSEE HAD FAILED TO PR OVE EXPANSION OF THE UNIT BY WAY OF INCREASE IN INVESTMENT OF UPTO 50% OF THE VALUE OF PLANT & MACHINERY AS ON 31.03.2004 DISENTITLING IT F OR DEDUCTION U/S ITA NO.5486/DEL/2011 11 80IC OF THE ACT. THE PENALTY IMPOSED ON THE ASSESSEE WA S DELETED BY THE CIT (A) BY VIRTUE OF THE ORDER UNDER APPEAL. 15. THE LD. CIT (A) HAS DELETED THE PENALTY BY OBSERV ING THAT THE ASSESSEE WAS CORRECT IN CONTENDING THAT ALL THE MATERIAL FACTS WERE AVAILABLE IN THE RETURN OF INCOME AND THE AUDIT REP ORTS AND ESPECIALLY IN THE AUDITORS REPORT IN FORM NO.10CCB WHEREIN TH E AUDITOR HAD GIVEN A REPORT FAVOURING THE ASSESSEES CLAIM FOR DEDUC TION U/S 80IC OF THE ACT AND NO MATERIAL FACT WAS CONCEALED; THAT IN THE PENALTY ORDER THE ASSESSING OFFICER HAD FAILED TO SHOW AS TO HOW THE A SSESSEE HAD FURNISHED AN EXPLANATION WHICH IT HAD NOT BEEN ABLE TO SUBSTANTIATE AND FAILED TO PROVE IT WAS BONA FIDE; AND THAT THE A SSESSING OFFICERS VIEW FOR DISALLOWING CLAIM U/S 80IC OF THE ACT WAS ALT OGETHER DIFFERENT FROM THE VIEW ON THE BASIS OF WHICH THE PENALTY HAD B EEN PROPOSED. 16. IT WOULD BE APPROPRIATE TO HERE REPRODUCE THE R ELEVANT PORTION OF THE CIT (A)S ORDER:- THUS I AGREE WITH APPELLANTS CONTENTION THAT ALL THE M ATERIAL FACTS WERE AVAILABLE IN THE RETURN OF INCOME AND AUDIT REPORTS AND ESPECIALLY IN AUDITORS REPORTS IN FORM NO.10CCB WHEREIN THE AUDITOR HAD GIVEN A REPORT FAVOURING APPELLANTS CL AIM FOR DEDUCTION U/S 80IC. FROM THOSE MATERIAL FACTS A.O. HA D NOT MADE OUT ANY CASE OF INSUBSTANTIAL EXPANSION. MY PRE DECESSOR CIT (A) ALTHOUGH GAVE A NEW FINDING; DID SO BY UTILI ZING AND ANALYZING THE SAME DATA/FACTS AS REPORTED BY APPELLAN T ITSELF. THUS NO MATERIAL FACTS WERE CONCEALED. TO THAT EXTENT I AGREE THAT EXPLANATION 1 TO SECTION 271 (1)(C) DOES NOT APPLY TO THE PRESENT CASE. I ALSO FIND FROM A CAREFULLY PERUSAL OF PENALTY ORD ER THAT A.O. HAS FAILED TO ELABORATE AND ESTABLISH AS TO HOW A PPELLANT HAS FURNISHED AN EXPLANATION WHICH IT WAS NOT ABLE TO SUBSTANTIATE AND FAILED TO PROVE IT WAS BONA FIDE. THE A.O. HAS NOT DEALT WITH APPELLANTS EXPLANATIONS THAT (A) THE VIEW O F A.O. FOR DISALLOWING CLAIM U/S 80IC WAS ALTOGETHER DIFFE RENT FROM THE VIEW ON THE BASIS OF WHICH PENALTY WAS BEING PROPOSED (B) EVEN AUDITOR HAS GIVEN A REPORT IN PRESCRIBED FORM 10CCB BASED ON ALL DISCUSSED FIGURES OF WDV AND EXPANSION/ADDITION TO ITA NO.5486/DEL/2011 12 MACHINERIES IN VARIOUS YEARS (C) APPELLANT HAD NOT CO NCEALED ANY MATERIAL FACTS RELEVANT TO THE ISSUE OF DEDUCTION U/ S 80IC. I FIND THAT A.O. HAS FAILED TO COUNTER APPELLANTS THESE RE LEVANT ARGUMENTS MADE FOR REBUTTING THE PRESUMPTION OF CONCEAL MENT. ON THE OTHER HAND CONSIDERING THE PENALTY PROCEEDING S AFRESH I FIND THAT ON THE BASIS OF AUDITORS REPORT APPELLANT MADE A BONAFIDE CLAIM OF DEDUCTION U/S 80IC BASED ON A CERTAIN LEGAL INTERPRETATION OF THE PROVISIONS OF SECTION 80IC AND ALSO ON A FAVOURABLE LEGAL VIEW AS ADOPTED BY CIT (A) AND IT AT FOR PREVIOUS YEAR. EVEN IF THAT CLAIM WAS REJECTED BY MY PREDECESSOR CIT (A) (OF COURSE FOLLOWING A DIFFER ENT LEGAL VIEW POINT) IT IS A CASE OF DIVERGENCE IN VIEWS OF INTERPRE TING THE PROVISIONS OF THE ACT AND NOT A CASE OF HIDING SOME MATERIAL FACTS. TO THAT EXTENT AS FAR AS A PENALTY PROVISION IS CONCERNED I FIND THAT APPELLANT HAS BEEN ABLE TO ADDUCE A REASONA BLE EXPLANATION FOR THE PURPOSE OF REBUTTING THE PRESUMPTION OF CONCEALMENT. I FIND THAT VARIOUS COURT DECISION CITED BY THE APPELLA NT IN ITS PAPER BOOK ESPECIALLY (I) CIT VS. RAHULJEE 250 ITR 225 (DELHI) (II) CIT VS. RELIANCE PETROPRODUCTS P. LTD. 322 ITR 1 58 (SC) (III) CIT VS. NALWA SONS INVESTMENT LTD. 327 ITR 543 (DEL) ( IV) CIT VS. DHARAMPAL PREMCHAND LTD. 329 ITR 572 (DEL) ARE FAVO RABLY APPLICABLE TO APPELLANTS CASE. IN VIEW OF AFORESAID DISCUSSION PENALTY U/S 271 (1) (C) ON THE ISSUE OF WRONG CLAIM OF DEDUCTION U/S 80IC IS NOT HE LD TENABLE. 17. FOR THE YEAR UNDER CONSIDERATION IN THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAD HELD THAT THE DEDUCTION CLAIM ED U/S 80IC OF THE ACT WAS NOT ALLOWABLE SINCE MOST OF THE MACHINERY USED IN THE BUSINESS WAS OLD HAVING BEEN EARLIER USED IN THE BUSINES S RUN BY SHRI PRANAY SHANKER GARG. IN HOLDING SO THE ASSESSING OFFIC ER HAD MERELY RELIED ON THE FINDINGS OF THE ASSESSING OFFICER IN THE A SSESSMENT ORDER PASSED FOR ASSESSMENT YEAR 2004-05. THE ASSESSMENT ORDER FO R ASSESSMENT YEAR 2004-05 WAS SET ASIDE BY THE LD. CIT (A) A ND THE ASSESSEES CLAIM OF DEDUCTION WAS UPHELD VIDE ORDER DATED 04.02.2008 (APB 31-60) OBSERVING THAT THERE HAD BEEN NO SPLITTI NG UP/RE- CONSTRUCTION OF THE BUSINESS ALREADY IN EXISTENCE AND TH AT SINCE DEDUCTION U/S 80IB OF THE ACT WAS ADMISSIBLE TO AN INDU STRIAL UNDERTAKING THERE WAS NO REASON FOR DENYING THE CLAI M MADE. THE ITA NO.5486/DEL/2011 13 TRIBUNAL VIDE ORDER DATED 23.04.2010 (APB 61-69) AFFIRMED THE SAID ORDER PASSED BY THE CIT (A) FOR ASSESSMENT YEAR 2004-05. 18. FOR ASSESSMENT YEAR 2005-06 I.E. THE YEAR UNDER C ONSIDERATION HOWEVER THE DEDUCTION U/S 80IC OF THE ACT WAS DISALLO WED BY THE CIT (A) NOT ON THE GROUND OF OLD MACHINERY HAVING BEEN USED IN THE BUSINESS BUT ON THE GROUND OF THE ASSESSEE HAVING FAILE D TO COMPLY WITH THE REQUIREMENT OF SUBSTANTIAL EXPANSION. THIS GR OUND IT IS PERTINENT TO NOTE HAD NEVER BEEN INVOKED BY THE ASSE SSING OFFICER FOR MAKING THE DISALLOWANCE FOR THE YEAR. THIS DISALLOWAN CE WAS NOT CHALLENGED BY THE ASSESSEE BEFORE THE TRIBUNAL. HOWEVE R THIS FACT OF THE ADDITION NOT HAVING BEEN CHALLENGED BEFORE THE TRIBUNAL BY ITSELF DOES NOT LEAD TO ANY INEVITABLE CONCLUSION OF LEVIAB ILITY OF CONCEALMENT PENALTY AS HELD IN :- I) CIT VS. GANESH MAL NANAK CHAND 1976.CTR (RAJ) 193; II) SOHAN LAL G. SANGHI VS. ACIT 125 ITR 184 (MP); III) ACIT VS. AGGARWAL SANITARY AND HARDWARE COMPANY 8 2 TTJ (CHD) 501; AND IV) CANBAY SOFTWARE VS. DCIT 122 TTJ 721 (PUNE). 19. PENALTY PROCEEDINGS AND ASSESSMENT PROCEEDINGS ARE SE PARATE. THOUGH THE FINDINGS IN ASSESSMENT PROCEEDINGS MAY BE RELE VANT FOR THE PURPOSES OF LEVY OF CONCEALMENT PENALTY THEY ARE NOT MATERIAL FOR SUCH LEVY ON A STAND ALONE BASIS. THE REQUIREMENT U/S 271 (1)(C) OF THE ACT IS EITHER CONCEALMENT OF PARTICULARS OF INCOM E OR FURNISHING OF INACCURATE PARTICULARS THEREOF NEITHER OF WHICH IS T HE CASE HEREIN. EVEN UNDER EXPLANATION-1 TO SECTION 271 (1)(C) A P RESUMPTION IS RAISED WHICH IS A REBUTTABLE PRESUMPTION. IN THE PRE SENT CASE EVEN THIS PRESUMPTION IS NOT AT THE OUTSET EVEN AVAILABLE AGAINST THE ASSESSEE INASMUCH AS THE EXPLANATION OFFERED BY THE ASSESSEE HAS NEITHER BEEN FOUND TO BE FALSE NOR HAS THE ASSESSEE NOT BEEN ABLE TO ITA NO.5486/DEL/2011 14 SUBSTANTIATE THE SAME NOR HAS SUCH EXPLANATION BEEN SHOW N TO BE NOT BONA FIDE . AS DISCUSSED ALL FACTS RELATING TO THE EXPLANATION AND MATERIAL TO THE COMPUTATION OF THE ASSESSEES TOTAL INC OME STOOD DULY DISCLOSED BY THE ASSESSEE. 20. THIS APART AS SEEN THE BASIS OF THE ADDITION OF ` 2 67 90 071/- AS TAKEN BY THE ASSESSING OFFICER WAS CHANGED TO ENTIREL Y ANOTHER GROUND BY THE LD. CIT (A). THUS THE FOUNDATION OF THE LEVY OF THE PENALTY CEASED TO EXIST. THE ASSESSING OFFICER HAD DENIE D THE ASSESSEES CLAIM OF DEDUCTION U/S 80IC OF THE ACT HOLDIN G AS FOR ASSESSMENT YEAR 2004-05 THAT THE INDUSTRIAL UNDERTAKING AT GAGRET WAS EARLIER OWNED BY ANOTHER ASSESSEE AND THE INDUSTRIAL UNDERTAKING WAS THUS FORMED BY SPLITTING UP/RE-CONSTRUCTION OF A BUSINESS ALREADY IN EXISTENCE DISENTITLING THE SCHEME OF DEDUCTION U/ S 80IC OF THE ACT. THIS HOWEVER WAS NOT THE BASIS ADOPTED BY THE LD. CI T (A) TO DENY THE DEDUCTION CLAIMED AND THE LD. CIT (A) HELD THAT THE DEDUCTION CLAIMED WAS NOT ALLOWABLE SINCE THE ASSESSEE HAD FAILED TO INVEST IN PLANT & MACHINERY TO THE EXTENT OF 50%. MOREOVER EVEN THE BASIS ADOPTED BY THE ASSESSING OFFICER AS ABOVE STOOD CANCELLED IN APPEA L BEFORE THE CIT (A) FOR ASSESSMENT YEAR 2004-05 AND THE CIT (A)S OR DER WAS AFFIRMED BY THE TRIBUNAL. IN CIT VS. ANANDA BAZAR PATRIKA LTD. 116 ITR 416 (CAL) IT HAS BEEN HELD THAT WHEN THE ORIGIN AL BASIS OF INITIATION OF PENALTY PROCEEDINGS IS ALTERED OR MODIFIED BY THE APPELLATE AUTHORITY THE AUTHORITY INITIATING PENALTY PROCEED INGS HAS NO JURISDICTION THEREAFTER TO PROCEED ON THE BASIS OF THE FINDINGS OF THE APPELLATE AUTHORITY. IN HOLDING SO THE HONBLE CAL CUTTA HIGH COURT FOLLOWED SHADIRAM BAL MUKAND 84 ITR 183 (ALL) DWARKA PRASAD SUBHAS CHANDRA 94 ITR 154 (ALL) AND LAKHDHIR LALJ I 85 ITR 77 (GUJ). SIMILAR IS THE DECISION OF THE SPECIAL BENCH OF THE T RIBUNAL IN GUJARAT CREDIT CORPORATION VS. ACIT 302 ITR (AT) 250. ITA NO.5486/DEL/2011 15 21. MOREOVER EVEN ON THE ISSUE OF DISALLOWANCE OF DED UCTION U/S 80IC ON THE GROUND THAT THE ASSESSEE HAD NOT CARRIED OU T THE REQUISITE EXPANSION UNDER THE SAID SECTION THERE IS A DIFFERENC E OF OPINION BETWEEN THE ASSESSEE AND THE DEPARTMENT AND THE CLAIM O F THE ASSESSEE IN THIS REGARD HAS NOT BEEN SHOWN TO BE MALA FIDE . THE ASSESSEE NURTURED A BONA FIDE BELIEF THAT IT HAD CARRIED OUT SUBSTANTIAL EXPANSION BY MAKING NECESSARY INVESTMENT IN PLANT & MAC HINERY DURING THE PERIOD FROM 01.04.2002 TO 31.03.2005 AND THAT IT WAS THUS ELIGIBLE TO CLAIM DEDUCTION U/S 80IC OF THE ACT IN RESPECT OF THE PROFITS EARNED IN ITS GAGRET UNIT. SUCH CLAIM HAS NOT BEEN SH OWN TO BE WITHOUT BASIS OR FALSE. NOW THERE IS A BONA FIDE DIF FERENCE OF OPINION ENTERTAINED BY THE ASSESSEE WITH THAT OF THE DEPARTMENT REGARDING THE MANNER OF DETERMINING THE SUBSTANTIAL EXPANSION FOR T HE PURPOSE OF ALLOWABILITY OF DEDUCTION U/S 80IC OF THE ACT SUCH I SSUE BEING A HIGHLY VEXED DEBATABALE LEGAL ISSUE. IN SUCH CIRCUMSTANCES A S HELD INTER ALIA IN THE FOLLOWING CASES NO CONCEALMENT IS LEVIABLE:- I) CIT VS. DEEPAK KUMAR 232 CTR 78 (P&H); II) CIT VS. NALWA SONS INVESTMENT LTD. 327 ITR 543 (DEL ); III) CIT VS. DHARAM PAL PREM CHAND LTD. 329 ITR 572 (P &H); IV) CIT VS. ARISUDANA SPINNING MILLS LTD. 326 ITR 429 ( P&H); V) CIT VS. HARSHWARDHAN CHEMICALS AND MINERALS LTD. 259 ITR 212 (RAJ); VI) CIT VS. INTERNATIONAL AUDIO VISUAL COMPANY 288 ITR 570 (DEL); VII) SHAHBAD COOPERATIVE SUGAR MILLS LTD. 322 ITR 73 ( P&H); VIII) CIT VS. VAIN CHAMPIGONS & AGRO PRODUCE 284 ITR 408 (DEL); IX) CIT VS. VIBROS ORGANICS LTD. 206 CTR 582 (DEL); X) CIT VS. BACARDI MARTINI INDIA LTD. 288 ITR 585 (D EL); XI) CIT VS. NATH BROTHERS EXIM INTERNATIONAL LTD. 288 ITR 670 (DEL); ITA NO.5486/DEL/2011 16 XII) CIT VS. PHI SEEDS INDIA LTD. 208 CTR 320 (DEL); AN D XIII) JOYCO INDIA (P) LTD. 152 TAXMAN 14 (DEL) (MAG.). 22. TO SUM UP IN THE PRESENT CASE WHERE IN THE RETUR N OF INCOME FILED THE ASSESSEE HAD DULY DISCLOSED ALL THE DETAILS REG ARDING THE CLAIM OF DEDUCTION U/S 80IC OF THE ACT WHICH CLAIM WAS SUPPORTED BY THE TAX AUDIT REPORT AND THE TAX AUDIT REPORT CONTA INED ALL THE FACTS RELATING TO THE SUBSTANTIAL EXPANSION AS REQUIRED BY S ECTION 80IC THE ASSESSING OFFICER NOWHERE ALLEGED THE ASSESSEE TO HAVE WITH HELD ANY INFORMATION OR TO HAVE FURNISHED ANY FALSE INFORMATIO N THE DISALLOWANCE HAD BEEN MADE MERELY ON ACCOUNT OF A BO NA FIDE DIFFERENCE OF OPINION BETWEEN THE ASSESSEE AND THE DEPA RTMENT REGARDING THE MANNER OF DETERMINING SUBSTANTIAL EXPAN SION FOR THE PURPOSE OF THE ALLOWABILITY OF DEDUCTION U/S 80IC OF THE ACT WHICH DETERMINATION UNDOUBTEDLY IS A HIGHLY DEBATABLE/V EXED LEGAL ISSUE BESIDE THE FACT THAT THE DISALLOWANCE HAD BEEN MADE B Y THE ASSESSING OFFICER ON ONE ISSUE WHEREAS THAT MADE BY THE CIT (A) WAS ENTIRELY ON A DIFFERENT ISSUE NO PENALTY U/S 271(1)(C) OF THE ACT IS LEVIABLE AS CONSIDERED IN THE FOREGOING PARAGRAPHS AND WE HOLD TH AT THE SAME WAS WRONGLY LEVIED AND WAS CORRECTLY DELETED BY THE LD. CIT (A). THE CIT (A) WHILE CORRECTLY DELETING THE PENALTY TO THAT E XTENT HAS PASSED A PERFECTLY VALID ELABORATE REASONED ORDER WHICH WE HE REBY SUSTAIN REJECTING THE GRIEVANCE SOUGHT TO BE RAISED BY THE DE PARTMENT. 23. IN THE RESULT THE APPEAL FILED BY THE DEPARTMEN T IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 31.07.20 13. SD/- SD/- [T.S. KAPOOR] [A.D. JAIN] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 31.07.2013. ITA NO.5486/DEL/2011 17 DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES