2017 (12) TMI 1522

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....ncome Tax Act, 1961 (hereinafter referred to as "the Act"). 2. Brief facts of the case are that under the assessment order passed u/s 143(3), the Assessing Officer had made three additions to the income of the assessee:- i) Addition on account of entertainment subsidy which the assessee had claimed to be a capital receipt which the Assessing Officer held that it should be reduced from the cost of assets and depreciation should not be allowed. ii) Disallowance of Rs. 70,08,183/- in respect of ESOP and ESPS Schemes as a contingent liability by the Assessing Officer as against the assessee treating it as revenue expenditure. iii) Disallowance of Rs. 34,53,218/- u/s 14A of the Act. 2.1 On appeal, the Ld. CIT (A)....

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.... of Biocon Ltd. Vs DCIT reported in (2013) 35 Taxmann.com 335. The Ld. CIT (A) also noted that the assessee had furnished all particulars during the course of assessment proceedings and that the Assessing Officer had nowhere stated that the particulars furnished were incorrect or inaccurate. The Ld. CIT (A) also noted that since two different Benches of the ITAT had held two different views on the deductibility of ESOP expenses as revenue expenditure, the issue was a debatable one and, therefore, no penalty was leviable on that count also. 2.5 Now, the department has approached the ITAT and has challenged the deletion of penalty by the Ld. CIT (A). 3. The Ld. Sr. DR, while supporting the order of the Assessing Officer, vehemently argu....

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.... cases has held that the same was not a deductible expenditure. Thus, although the ITAT Delhi has held the quantum issue against the assessee in the assessee's own case, the fact remains that the issue is a debatable legal issue and, further, no instance of concealment of income or furnishing of inaccurate particulars of income has been pointed out either by the Assessing Officer or by the Ld. Sr. DR during the course of proceedings before us. Therefore, we are of the considered opinion that penalty will not be leviable on this issue as mere making of a claim, which is not otherwise acceptable in law, will not tantamount to concealment of income or furnishing inaccurate particulars, especially when the bona fides of the assessee are not und....

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....details of the claim made. It is an admitted position in the present case that no information given in the return was found to be incorrect or inaccurate. It is not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee cannot be held guilty of furnishing inaccurate particulars. The Ld. counsel argued that "submitting an incorrect claim in law for the expenditure on interest would amount to giving inaccurate particulars of such income". We do not think that such can be the interpretation of the concerned words. The words are plain and simple. In order to expose the assessee to the penalty unless the case is strictly covered by the provision, the penalty provision canno....