TaxTMI 
TaxTMI 
2021 (9) TMI 1178
X X X X Extracts X X X X
X X X X Extracts X X X X
....e. 2. The ld.CIT(A) has erred in law and on facts in cancelling penalty for the repairs of the road not belonging to the Assessee to the extent of Rs. 1,98,81,000/-. 3. The ld.CIT(A) has erred in law and on facts in cancelling the penalty imposed by the AO for Rs. 5801.76 lacs without appreciating the fact that Assessee had failed to furnish complete details of quantity transported and rate charged by the transporters." 3. Facts of the case are already on record, therefore for the sake of brevity the same are not repeated herein. 4. Ground No.1 relates to deletion of penalty by the Ld. Commissioner, imposed by the AO for inadmissible guest house maintenance expenses to the extent of Rs. 2,10,000/-. Having heard the parties and perused the material available on record. Though, the claim of the Assessee qua guest house expenses has not been completely allowed and subjected to addition partly, however, to impose the penalty for furnishing inaccurate particulars of income, it is required to be established that the Assessee offered no explanation, secondly, if explanation is offered, then the same is found to be false by the authorities, however in this case n....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the company, was deleted by the Co-ordinate Bench, while relying upon the order of Co-ordinate Bench in ITA no. 187/Jab/2008 as submitted by the Ld. AR. The ld. DR neither refuted the claim of the ld. AR nor finding recorded in the said order. Considering the facts as the addition qua "repairs and maintenance of assets not belonging to the company", has already been deleted by the Co-ordinate Bench, hence no penalty could survive and consequently the ground no. 2 is dismissed being infructuous. 6. Ground No.3 relates to the cancellation of penalty imposed by the AO for Rs. 5801.76 lakhs under the head "payments made to the transporters". 6.1 The AO imposed the penalty qua addition under the head "payments made to the transporters" by holding that it is evident from the records that Assessee could not produce the details as required by the Assessing Officer. Therefore, the Assessing Officer has disallowed the expenditure. Non-maintenance of proper details goes to prove that Assessee is furnishing inaccurate particulars of its income. 6.2 The said penalty was deleted by the ld. Commissioner by holding that there is neither the element of concealment of income nor any inaccu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urt of Chhattisgarh against the sustaining of the said addition, however, it is still pending for adjudication and the Assessee is claiming the expenditure as revenue in nature in the return of income for the A.Y. 2009-10 which has been denied by the AO every year. On the aforesaid observations, the AO disallowed the said expenditure by treating as "capital in nature" and added back to the total income of the Assessee and also initiated penalty proceedings u/sec. 271(1)(c) of the Act for furnishing inaccurate particulars of income and vide penalty order dated 19/02/2013 imposed the penalty on the said addition by holding as under: - "As regards claim for land compensation and rehabilitation, the assessing officer has treated it as capital expenditure and this stand of the Department was upheld by the appellate authorities (upto tribunal) in earlier years also. By claiming the deduction under the garb of revenue expenditure is tantamount to the furnishing of inaccurate particulars." 8.2 The said penalty also came into consideration before the ld. Commissioner, who sustained the penalty by holding as under:- "Regarding claim of "Land Compensation and Rehabilit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ction 271(1)(c) is attracted. The minimum penalty imposed against the addition is confirmed for furnishing inaccurate particulars of income in the return. Penalty imposed against other additions as discussed above is cancelled." 8.3 The affirmation of penalty by the ld. Commissioner has also been challenged by the Assessee in the instant appeal under consideration. 8.4 The Assessee reiterated the same arguments raised before the authorities below that the legal issue involved in the instant case relates to the treatment of expenditure as capital or revenue in nature. Non-acceptance of claim does not mean wrong claim and by any stretch of imagination, making an incorrect claim in law can tantamount to furnishing of inaccurate particulars of income as held by the Hon'ble Supreme Court in the case of CIT vs. Reliance Petroproducts Pvt. Ltd. [(2010) 322 ITR 158 (SC)]. It was further claimed by the Assessee that there is no evidence of inaccurate particulars furnished by the Assessee before the AO. It is a fact that relevant information has been fully disclosed and, therefore, it cannot be attributed that inaccurate particulars of income have been furnished. 8.5 On the cont....
X X X X Extracts X X X X
X X X X Extracts X X X X
....36 ITR 261 {P&H} ) held that no penalty u/s 271(1) (c) was leviable in respect of the deduction wrongly claimed by the Assessee u/s 80IB of the Act in respect of income from Duty Draw Back. 8.10 The Hon'ble Apex Court in the case of Hindustan Steel Limited vs State of Orissa [1970 SCR (1) 753] has held that a penalty will ordinarily be imposed in cases where the party acts deliberately in defiance of law, or is guilty of contumacious or dishonest conduct, or acts in conscious disregard of its obligation; but not, in cases where there is a technical or venial breach of the provisions of the Act or where the breach flows from a bonafide belief that the offender is not liable to act in the manner prescribed by the statute. 8.11 In this case, as the Revenue Department did not find the claim of the Assessee as maintainable and treated the same as "Capital in nature" as against "Revenue in nature" claimed by the Assessee and made the addition and consequently imposed the penalty. The Assessee is continuously claiming the said addition as "Revenue in Nature" and it is not the case of the Revenue that the Assessee has acted deliberately in defiance of law, or is guilty of contuma....