TaxTMI 
TaxTMI 
TaxTMI 
2016 (7) TMI 1183
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.... vide order dated 18th March, 2013. The assessee aggrieved by this penalty, filed an appeal before ld. CIT (A) who after considering the submissions, dismissed the appeal. 3. Now the assessee is further in appeal before the Tribunal. 3.1. The ld. Counsel for the assessee reiterated the submissions as are made in the written submissions and submitted that the authorities below were not justified in imposing penalty and confirming the same. The ld. Counsel submitted that merely because a claim made by the assessee was disallowed by the Assessing Authority, would not ipso facto make the assessee liable for penalty under section 271(1)(c) of the Act. He submitted that penalty proceedings and the assessment proceedings are two different and distinct proceedings. In the present case, the conditions as envisaged under the law for imposing penalty are not satisfied. He placed reliance on the judgment of the Hon'ble Supreme Court rendered in the case of CIT vs. Reliance Petroproducts P. Ltd. 322 ITR 158 (SC). He submitted that so far claim of deduction under section 10BA is concerned, the issue was debatable as prior to the judgment of Hon'ble Supreme Court rendered in the case of Liberty....
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.... return on 23.09.2009 and that as per the existing decision of the various courts such receipts on account of DEPB and duty draw back were treated to be part of business receipts and considered eligible for deduction u/s 10BA of IT Act. It was also stated that the decision of Hon'ble Supreme Court in the case of Liberty India vs. CIT, supra was delivered on 31.08.2009 and that it is only after the decision of Hon'ble supreme Court, such claim is held not eligible for deduction u/s 10BA of IT Act. It is accordingly contended that when the return was filed there was no concealment of income or furnishing of inaccurate particulars of income. It is also stated that such claim was supported by the statutory auditors. Another justification for not imposition of penalty u/s 271(1)(c) of I.T. Act by the appellant is that whether the receipts on account of DEPB/duty draw back should be part of business receipts is always a debatable issue in as much as before the decision of Hon'ble Supreme Court in the Liberty India vs. CIT, various courts including the jurisdiction High court in the case of Saraf Seasoning Udyog vs. ITO, (2009) 317 ITR 207 has held such receipts to be part of business pro....
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....m duty draw back/DEPB. In fact the submission of the appellant is factually incorrect in respect of the fact that the return of the income for A.Y. 2008-09 has been filed before the decision of the Hon'ble Supreme Court in as msuch as the return of income has been filed after the decision of the Hon'ble Supreme Court in the case of Liberty India vs. CIT, the claim of deduction on the receipts from DEPB/duty draw back was definitely not allowable. All these facts were before the appellant when the return of income was filed and knowing very well that with the decision of the Hon'ble Supreme Court such receipts from DEPB/duty draw back can not form part of eligible profits u/s 80IA, 80IB, 10BA etc., the appellant claimed such receipts as exempt income u/s 10BA and accordingly made a wrong claim in the return of income. In this background by making such intentional wrong claim the appellant definitely furnished inaccurate particulars of his income. It may be stated that it is not a case of mere claim of the assessee being rejected but it is a case of wrong claim being made by the appellant. On such claim the decision of the Hon'ble Supreme Court there was no doubt or any issue of deba....
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....allowed the deduction to the assessee under s. 80-IB on duty drawback. Hon'ble Punjab & Haryana High Court in the case of Liberty India (supra) has held that deduction under s. 80-IB would not be admissible to the assessee. The SLPs have been filed against the decisions of Hon'ble Punjab & Haryana High Court as well as against the decisions of Hon'ble Delhi High Court in the Hon'ble Supreme Court which are stand admitted as informed by the learned representative of the assessee. Thus, prima facie, it indicates that this issue was a debatable one. Hon'ble Punjab & Haryana High Court in the case of CIT vs. Budhewal Co-operative Sugar Mills (supra) has held that if an assessee has made a bona fide claim on the basis of law laid down by various Hon'ble High Courts then penalty would not be levied upon such an assessee merely on the ground that his claim was disallowed. Similarly, the Hon'ble Rajasthan High court in the case of CIT vs. Harshvardhan (supra) has held that if an assessee claims some deductions which are debatable then it could not be said that assessee has concealed any income or furnished inaccurate particulars of income which exposed him with the penalty proceedings unde....