TaxTMI 
TaxTMI 
TaxTMI 
2016 (3) TMI 422
X X X X Extracts X X X X
X X X X Extracts X X X X
....tified in deleting the penalty amounting to Rs. 8,91,62,465/- imposed by the Assessing Officer u/s 27(1)(c) of the IT Act, 1961." 4. In ITA No.4201/Del/2013, Assessment Year 2006-07, the assessee has raised the following grounds:- "1. Whether the CIT(A) under the facts and circumstances of the case and in law was justified in deleting the penalty amounting to Rs. 56,07,821/- imposed by the Assessing Officer u/s 271 (l)(c) of the IT. Act 1961?" Brief facts of the case 5. These assesses are engaged in the business of FM Radio Broadcasting under the brand "93.5 Red FM" in the territory of Kolkata, Delhi & Mumbai. All these assessee filed there return of income which were subsequently revised and in revised return claim u/s 35ABB of the Act was made on account of license fees paid by the assessee for respective territories. These companies were awarded license from the Ministry of Information and Broadcasting, Government of India for operation of F M radio station in respective cities. Successfully participating in the auction held in March, 2000 it entered in to a licenses agreement dated 27/10/2000 with Ministry of Information and Broadcasting. Tenure of that license was for a p....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of all successful bids received under phase - II in that city. All these assessee on migration to phase - II paid one time entry fee and accordingly got a new grant of permission agreement executed with the ministry of Information and broadcasting. Then they moved to revenue sharing model of phase -II for a fresh period of 10 years with effect from 1.04.2005. Claim of the assessee on which penalty is levied 6. Claim of the assessee was that license fee expenditure paid under Phase -I of license regime is allowable in full during the year under consideration in accordance with sub-section (2) of section 35ABB, For this main reliance of the assessee was on the provision of section 35ABB(2) and also the notification issued by the Govt, of India Notification No. 39 dated 9th January, 2004,whereby under the proviso to clause (k) of sub-section (1) of section 2 of the TRAI Act, 1997 as amended, the scope of the expression telecommunication services was increased to include the broadcasting services and cable services also. Based on such Notification, the license fee expenditure as earlier claimed by the assessee u/s 37 of I.T. Act had been recomputed and claim was made u/s 35ABB on pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d by the AO holding that same is a capital loss as the license was not transferred as required u/s 35ABB (2) of the act. On appeal before CIT (A) who in turn rejected claim of deduction of whole of license fees paid under phase -I holding that as there is no transfer as per section 35ABB (2) of the act. However he was of the view that as it is migration of license of assessee from Phase-I to phase -II of the licensing policy for F M radios, remaining unallowed expenditure u/s 35ABB becomes part and parcel of the licensing fee payable for phase- II and same shall be added to the license fee of phase - II, hence CIT (A) granted deduction of 1/10th of license fees of Phase -I. Against the Appeal filed by the Department, ITAT has dismissed the same vide their consolidated order dated 24-11-2015 and confirmed the findings of CIT (A) for granting deduction u/s 35ABB being 1/10th of license fees of Phase -I every year over 10 year period of Phase-ll License Fee commencing from AY 2006-07 onwards. Appeal as filed by the Assessee for allowing the entire deduction of phase -I of license fees itself has also been dismissed by ITAT by observing that migration of license from Phase-l to Phase-l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ties the issue was decided in altogether in a different manner discussing the claim of deduction u/s 35ABB of the act. There is no The Ld. CIT (A) has deleted the penalty u/s 271(1) (c) of the act holding that in such a debatable issue the penalty u/s 271(1) (c) cannot be levied as assessee has disclosed full particulars of its claim. He deleted the penalty holding as under :- "5.2 I have considered the submission of the appellant, observation of the Assessing Officer and various case laws. It is seen that appellant company was engaged in the business of Radio Broadcasting at Delhi under the channel identity 93.5 Red F.M. During the year, the appellant had claimed deduction u/s 35ABB of Rs. 12,65,82,440/-under the head 'license fee' in the revised return of income filed with the Assessing Officer as revenue expenditure and also shown interest income as business income instead of income from other sources. During the course of assessment proceedings the Assessing Officer has held that appellant was not entitled to claim the remaining license fee of Phase-I as revenue expenditure due to migration from Phase-I license to Phase-II license. The Assessing Officer held that becau....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the ten years license term starting from A.Y. 2006-07 onwards in accordance with section-35ABB. This clearly shows that there was difference of opinion/ interpretation with regard to the allowability of such license fee expenditure between the appellant, Assessing Officer and CIT(Appeal). The appellant has further stated that it is a settled law that if a different stand is taken by the revenue as against the stand taken by the appellant and due to such difference of opinion such deduction is not allowed, penalty cannot be imposed on such disallowances. In view of the above stated facts the AR of the appellant submitted that no penalty is leviable in its case. A glance at the provisions of section 271(l)(c) suggests that in order to be covered u/s 271(l)(c) there has to be concealment of income of the appellant. Secondly the appellant must have furnished inaccurate particulars of its income in the return of income. However, in the instant case, the appellant has given all particulars of its income shown in the return of income. The appellant did not conceal or suppress any facts relating to the income or loss for the instant year. The information given in the return of income w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....unt to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee, because that is the only document where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. To attract 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 penalty under Section 271(l)(c). A mere 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. Such a claim made in the return cannot amount to furnishing inaccurate particulars." The above view of the Apex court in the case of Reliance Petro product mentioned has been followed by jurisdictional Delhi High Court and also Delhi Tribunal in numerous subsequent cases. XXXXXX Since the appellant has not concealed any income or did not furnish any inaccurate particulars of its i....