DCIT 1(1), MUMBAI v. DICKINSON FOWLER P. LTD, MUMBAI

ITA 398/MUM/2009 | 2003-2004
Pronouncement Date: 24-02-2010

Appeal Details

RSA Number 39819914 RSA 2009
Assessee PAN AAACD6234A
Bench Mumbai
Appeal Number ITA 398/MUM/2009
Duration Of Justice 1 year(s) 1 month(s) 5 day(s)
Appellant DCIT 1(1), MUMBAI
Respondent DICKINSON FOWLER P. LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 24-02-2010
Appeal Filed By Department
Bench Allotted D
Tribunal Order Date 24-02-2010
Date Of Final Hearing 18-02-2010
Next Hearing Date 18-02-2010
Assessment Year 2003-2004
Appeal Filed On 19-01-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D : MUMBAI BEFORE SHRI A.L. GEHLOT (AM) AND SMT. P. MADHAVI DEVI (JM) ITA NO.398/MUM/2009 ASSESSMENT YEAR : 2003-04 DY. COMMISSIONER OF INCOME TAX -1(1) ROOM NO.533 & 579 5 TH FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI-20. ..( APPELLANT ) VS. M/S. DICKINSON FOWLER PVT. LTD. 84 RAJMAHAL BUILDING VIR NARIMAN ROAD MUMBAI-4. ..( RESPONDENT ) P.A. NO. (AAACD 6234 A) APPELLANT BY : SHRI SANJEEV JAIN RESPONDENT BY : S HRI YOGESH A. THAR O R D E R PER A.L. GEHLOT (AM). THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE LD. CIT(A) DATED 14.10.2008 FOR ASSESSMENT YEAR 2003-0 4 WHEREIN THE REVENUE HAS RAISED THE FOLLOWING GROUND. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE PENALTY AMOUNT ING TO RS.6 50 281/- LEVIED BY THE AO U/S.271(1)(C). 2. THE BRIEF FACTS OF THE CASE ARE THAT THE AO LEVI ED PENALTY ON ACCOUNT OF FOLLOWING ADDITIONS MADE IN TOTAL INCOME. SOFTWARE EXPENSES : RS. 4 88 176/- PROVISION OF LIABILITY FOR CASH AWARD : RS. 4 40 226/- DEPRECIATION ON TECHNICAL KNOWHOW : RS.12 6 0 375/- EXCESS DEDUCTION U/S. 80HHC : RS. 1 41 04 9/- ITA NO. 398/M/09 ASSESSMENT YEAR :03-04 2 3. THE CIT(A) CANCELLED THE PENALTY AFTER A DETAILE D DISCUSSION ON EACH ITEM. THE CIT(A) WHILE CANCELLING THE PENALTY OBSE RVED THAT MERELY ADDITION SUSTAINED ON MERIT PENALTY U/S.271(1)(C) IS NOT APP LICABLE UNLESS IT IS FOUND THAT ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME OR HAS CONCEALED PARTICULARS OF HIS INCOME. HE FURTHER OB SERVED THAT THE AO HAS ONLY GONE BY THE FACT THAT ADDITION HAS BEEN SUSTAI NED BY THE FIRST APPELLATE AUTHORITY HOWEVER CONFIRMATION OF ADDITION IN ITS ELF DOES NOT SUGGEST CONCEALMENT OF INCOME. THE CIT(A) HAS ALSO OBSERVE D THAT THE TREATMENT GIVEN IN RESPECT OF SECTION 80-HHC WERE SUBJECT MAT TER OF FURTHER LITIGATION AND IN CASE OF DEBATABLE CLAIM WHICH DOES NOT AMOUN T TO CONCEALMENT OF PARTICULARS OR INACCURATE PARTICULARS THE CIT(A) RE LIED UPON THE JUDGMENT OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF HARSHVA RDHAN CHEMICALS AND MINERAL LTD.(2003) 259 ITR 212. 4. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES. WE FIND THAT THE FIRST ITEM ON WHICH AO LEVIED PENALTY IS ON ACCOUNT OF SOFTWARE EXPENSES HAS BEEN SENT BACK TO THE FILE OF THE AO BY ITAT IN ASSESSEES OWN CASE ON MERIT VIDE ITA NO.6083 & 6138/M/06 DATED 27.4.2009 FOR THE ASSESSMENT YEAR 2003-04. THE CONTENTION OF THE LD. AR IS THAT IN THE CASE OF GODFREY PHILIPS INDIA LTD. IN ITA NO.2747 & 2592/M/09 DATED 20.1.2010 FOR ASSESSMENT YEAR 2002-03 ITAT HAS CANCELLED PENALTY ON THE GROUND THAT THE PENALTY U/S.271(1)(C) IS NOT LEVIABLE WHEN ISSUE IS DEBATABLE. 5. AS REGARDS THE MERIT OF 2 ND ISSUE PROVISION FOR CASH THIS ISSUE HAS NOT BEEN PRESSED BEFORE THE ITAT BY THE ASSESSEE. THE LD. AR FURTHER SUBMITS THAT SIMILAR IS THE POSITION IN RESPECT OF DEPRECIA TION AND DEDUCTION ITA NO. 398/M/09 ASSESSMENT YEAR :03-04 3 U/S.80HHC SINCE THESE ISSUES ARE DEBATABLE NO PEN ALTY U/S.271(1)(C) ARE LEVIABLE. THE LD. AR RELIED ON FOLLOWING DECISION : 1. ITO VS. MEDICOP TECHNOLOGIES INDIA LTD. (30 SOT 506)(CHENNAI) 2. A.CIT VS. REAL IMAGE TECH(P) LTD. (177 TAXMAN 80)(C HENNAI)(MAG) 3. ITA NO.5869/MUM/05 FOR ASSESSMENT YEAR 2000-01 DATE D 24.4.2009 IT IS ALSO SUBMITTED BY THE AR THAT WHEN THE ASSESS EE HAS MADE FULL DISCLOSURE OF THE FACTS PENALTY CANNOT BE LEVIED. THE LD. AR RELIED ON VARIOUS DECISIONS OF WHICH GIST HAS BEEN SUBMITTED ALONGWIT H CHART. IT IS ALSO SUBMITTED BY THE LD. AR THAT WHEN THE HONBLE HIGH COURT HAS ADMITTED THE APPEAL AS QUESTION OF LAW PENALTY U/S.271(1)(C) C ANNOT BE LEVIED. IN SUPPORT OF THIS CONTENTION HE HAS RELIED ON THE DEC ISION OF WHICH GIST HAS BEEN ATTACHED TO THE CHART FILED BY THE LD. AR. TH E LD. AR SUBMITTED THAT IF CLAIM OF ASSESSEE IS CERTIFIED BY EXPERT NO PENALTY IS LEVIABLE. THE LD. AR RELIED ON VARIOUS DECISIONS OF WHICH GIST HAS BEEN RECORDED ALONG WITH CHART. 6. THE LD. DR RELIED ON THE ORDER OF THE AO. 7. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND PERUSED THE RECORDS. WE HAVE GONE THROUGH THE DECISION CITED B Y THE LD. AR APART FROM THAT IT MAY ALSO BE MENTIONED THAT THE ISSUE RELAT ED TO LEVY OF PENALTY U/S.271(1)(C) HAS BEEN EXAMINED BY THE ITAT BY VARI OUS ANGLES IN ITA NO.1985/M/09 DATED 18.2.10 WHERE AM IS A PARTY TO THE ABOVE DECISION THE RELEVANT DISCUSSION OF THE ITAT IN PARA-5 TO 5.5 IS REPRODUCED AS UNDER :- ITA NO. 398/M/09 ASSESSMENT YEAR :03-04 4 5. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE RECORD AS WELL AS GONE THRO UGH THE DECISIONS CITED. INCOME TAX IS COLLECTED FROM T AX PAYERS WHO ARE HAVING TAXABLE INCOME FOR THE WELFA RE OF THE STATE. THE CITIZENS ARE BOUND TO PAY SUCH IN COME TAX AS IT IS A PART OF THEIR DUTY TO THE NATION. TH E INCOME TAX IS PAYABLE YEARLY ON THE ANNUAL TAXABLE INCOME THAT MEANS THIS DUTY TOWARDS THE NATION IS YEARLY DUTY OF THE TAXPAYERS. UNDER THE CIRCUMSTANC ES SOME TIME TAXPAYERS AGREE TO CERTAIN ADDITIONS DURI NG ASSESSMENT PROCEEDINGS NOT ALWAYS BECAUSE THEY ARE CONVINCED THAT SUCH ADDITION IS WARRANTED OR OTHERW ISE JUSTIFIED BUT WITH A VIEW TO BRING FINALITY TO THE WHOLE MATTER TO PURCHASE PEACE AND AVOID LITIGATION. THE GENERAL VIEW HAS ALWAYS BEEN THAT MERE ADMISSION BY ITSELF NEED NOT OFFER IMMUNITY TO THE TAXPAYER WHE RE THE ADMISSION HAS BEEN EXTORTED FROM HIM AFTER CONCEALMENT HAD BEEN BROUGHT HOME. BUT THERE ARE A NUMBER OF CASES WHERE THERE IS HARDLY ANY MATERIAL TO JUSTIFY THE ADDITION AT THE TIME WHEN ADDITION IS CONCEDED. IT IS TRUE THAT IN SOME CASES THE ADDITIO N MAY BE AGREED WITH A VIEW TO FORESTALL ENQUIRY. EVE N IN SUCH CASES IT WOULD APPEAR THAT PENALTY MAY NOT BE LEVY ABLE IN ABSENCE OF ANY MATERIAL ON RECORD AGAI NST THE TAXPAYER. IT IS BECAUSE A MERE ATTEMPT TO CONCE AL INCOME HAS NOT BEEN SPECIFICALLY MADE LIABLE FOR PENALTY. EVEN IN A CASE WHERE PROCEEDINGS FOR DETEC TION OF CONCEALMENT IS GOING ON DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE SURRENDERS SOME INCOME AN D AO DROPS THE PROCEEDINGS OF DETECTION OF CONCEALMEN T BY ACCEPTING ASSESSEES SURRENDER WITHOUT MAKING FURTHER EXAMINATION OR INVESTIGATION REGARDING DETE CTION OF CONCEALMENT UNDER THESE CIRCUMSTANCES ALSO IT CAN BE HELD THAT IT IS NOT A CASE OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME; BECAUSE IN THAT SITUATION T HE AO DOES NOT RECORD SATISFACTION AS REQUIRED U/S 271(1) . IN THIS REGARD THE LEGAL POSITION IS WELL SETTLED IN VIEW OF THE SUPREME COURT DECISIONS IN COMMISSIONER OF INCOME TAX MADRAS AND ANR. VS. S.V. ANGIDI CHETTIA R 44 ITR 739 (SC) AND D.M. MANASVI V. COMMISSIONER OF INCOME TAX GUJARAT II AHMEDABAD 86 ITR 557 (SC) THAT POWER TO IMPOSE PENALTY UNDER SECTION 271(1) O F THE ACT DEPENDS UPON THE SATISFACTION OF THE INCOME TAX OFFICER IN THE COURSE OF THE PROCEEDINGS UNDER THE ACT. IT CANNOT BE EXERCISED IF HE IS NOT SATISFIED AND HAS NOT RECORDED HIS SATISFACTION ABOUT THE EXISTENCE O F THE CONDITIONS SPECIFIED IN CLAUSES (B) (C) AND (D) OF SECTION 271(1) OF THE ACT. BEFORE THE PROCEEDINGS ARE CONCL UDED. IT IS TRUE THAT MERE ABSENCE OF THE WORDS I AM SAT ISFIED MAY NOT BE FATAL BUT SUCH A SATISFACTION MUST BE SP ELT OUT FROM THE ORDER OF THE ASSESSING AUTHORITY AS TO THE CONCEALMENT PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS. IN THE ABSENCE OF A CLEAR F INDING ITA NO. 398/M/09 ASSESSMENT YEAR :03-04 5 AS TO THE CONCEALMENT OF INCOME FURNISHING INACCURA TE PARTICULARS THE INITIATION OF PENALTY PROCEEDINGS WILL BE WITHOUT JURISDICTION. 5.1 THIS VIEW IS ALSO SUPPORTED BY THE PROV ISIONS OF EXPLANATION 1(B) OF SECTION 271 OF THE ACT. ACCO RDING TO US AS PER THE PROVISIONS OF EXPLANATION 1(B) OF S. 271 OF THE ACT THE BURDEN IS ON THE ASSESSEE TO SUBSTANTIATE THE MATTERS STATED IN THE EXPLANATION THAT IT IS SETTLED POSITION IN LAW THAT THERE CANNO T BE AN ESTOPPELS AGAINST A STATUTE. IT IS FOR THE DEPARTME NT TO CONSIDER THE EXPLANATION OFFERED BY THE ASSESSEE IN RESPECT OF AN AMOUNT WHICH WAS OFFERED AS TAX. IT I S NOT AUTOMATIC THAT WHENEVER AN AMOUNT WAS OFFERED BY TH E ASSESSEE PENALTY IS TO BE LEVIED. THEREFORE IN TH E PENAL PROCEEDINGS WHICH CONCEPTUALLY DIFFER FROM ASSESSME NT PROCEEDINGS THE ASSESSEE CAN FILE AN EXPLANATION JUSTIFYING ITS ACTION IN NOT INCLUDING A PARTICULAR ITEM OF INCOME IN ITS RETURN THOUGH IT MAY HAVE OFFERED TH E AMOUNT TO BE TAXED SUBSEQUENTLY THAT IF SUCH AN EXPLANATION IS OFFERED THE DEPARTMENT HAS TO EXAMI NE ITS ACCEPTABILITY AND RECORD A FINDING AS TO WHETHE R THE EXPLANATION IS ACCEPTABLE OR NOT. ONLY IF THE EXPLANATION IS NOT FOUND ACCEPTABLE THE QUESTION O F PENALTY WILL ARISE. IN OTHER WORDS THE EXPLANATION OF THE ASSESSEE HAS TO BE CONSIDERED ON THE MERITS. DU RING ASSESSMENT PROCEEDINGS IF THE AO ACCEPT THE SURREN DER AMOUNT IN OTHER WORDS IT CAN BE SAID THAT WHATEVE R EXPLANATION SUBMITTED BY THE ASSESSEE IN RESPECT OF SURRENDER OF AMOUNT HAVE BEEN ACCEPTED BY THE AO UNLESS FINDING IS GIVEN BY THE AO THAT EXPLANATION FURNISHED BY THE ASSESSEE WAS FALSE EXPLANATION. 5.2 THE ISSUE RELATING TO BONAFIDE AND FA LSE RETURNS IN IMPOSING PENALTY ON THE ASSESSEE UNDER SECTION 43 OF THE MADHYA PRADESH GENERAL SALES TAX ACT 1958 AND SECTION 9(2) OF THE CENTRAL SALES TA X ACT 1956 HAVE BEEN EXAMINED BY THE APEX COURT IN T HE CASE OF CEMENT MARKETING CO. OF INDIA LTD. V .ASSIS TANT COMMISSIONER OF SALES TAX [1980] 4 TAXMAN 44 (SC) 124 ITR 15 (SC). FACTS IN BRIEF OF THAT CASE WERE T HAT THE ASSESSEE-COMPANY EFFECTED CERTAIN TRANSACTIONS OF SALE OF CEMENT IN ACCORDANCE WITH THE PROVISIONS OF THE CEMENT CONTROL ORDER DURING THE ASSESSMENT PERIOD 1 - 8-1971 TO 31-7-1972. THE AMOUNT OF FREIGHT INCLUDED IN THE 'FREE ON RAIL DESTINATIONS RAILWAY STATION' WAS PAID BY THE PURCHASERS AND HENCE THE ASSESSEE DEDUCTED FROM THE PRICE SHOWN IN THE INVOICES SENT TO THE PURCHASERS. IN THE COURSE OF ITS ASSESSMENT TO SALE S TAX UNDER THE MADHYA PRADESH GENERAL SALES TAX ACT 195 8 AND THE CENTRAL SALES TAX ACT 1956 THE ASSESSEE D ID NOT INCLUDE THE SAID AMOUNT OF FREIGHT IN ITS TAXAB LE TURNOVER ON THE GROUND THAT IT DID NOT FORM PART OF THE ITA NO. 398/M/09 ASSESSMENT YEAR :03-04 6 SALE PRICE. IN HIS TWO SEPARATE ASSESSMENT ORDERS ONE UNDER THE CENTRAL SALES TAX ACT 1956 AND THE OTHE R UNDER THE MADHYA PRADESH GENERAL SALES TAX ACT 1958 THE ASSISTANT COMMISSIONER HOWEVER INCLUDED THE SAME IN THE TAXABLE TURNOVER FOR LEVYING TAX. H E ALSO IMPOSED HEAVY PENALTY ON ACCOUNT OF THE ASSESSEE'S FAILURE TO DISCLOSE THE SAME IN ITS TAXA BLE RETURNS. ON DIRECT APPEAL TO THE SUPREME COURT HEL D AS UNDER:-. 5. THE NEXT QUESTION THAT ARISES FOR CONSIDERATION IS WHETHER THE ASSISTANT COMMISSIONER WAS RIGHT IN IMPOSING PENALTY ON THE ASSESSEE FOR NOT SHOWING TH E AMOUNT OF FREIGHT AS FORMING PART OF THE TAXABLE TU RNOVER IN ITS RETURNS. THE PENALTY WAS IMPOSED UNDER SECTI ON 43 OF THE MADHYA PRADESH GENERAL SALES TAX ACT 1958 A ND SECTION 9(2) OF THE CENTRAL SALES TAX ACT 1956 ON THE GROUND THAT THE ASSESSEE HAD FURNISHED FALSE RETURN S BY NOT INCLUDING THE AMOUNT OF FREIGHT IN THE TAXABLE TURNOVER DISCLOSED IN THE RETURNS. NOW IT IS DIFFI CULT TO SEE HOW THE ASSESSEE COULD BE SAID TO HAVE FILED 'F ALSE' RETURNS WHEN WHAT THE ASSESSEE DID NAMELY NOT INCLUDING THE AMOUNT OF FREIGHT IN THE TAXABLE TURN OVER WAS UNDER A BONA FIDE BELIEF THAT THE AMOUNT OF FRE IGHT DID NOT FORM PART OF THE SALE PRICE AND WAS NOT INC LUDIBLE IN THE TAXABLE TURNOVER. THE CONTENTION OF THE ASSE SSEE THROUGHOUT WAS THAT ON A PROPER CONSTRUCTION OF THE DEFINITION OF 'SALE PRICE' IN SECTION 2(O) OF THE M ADHYA PRADESH GENERAL SALES TAX ACT 1958 AND SECTION 2( H) OF THE CENTRAL SALES TAX ACT 1956 THE AMOUNT OF FREI GHT DID NOT FALL WITHIN THE DEFINITION AND WAS NOT LIAB LE TO BE INCLUDED IN THE TAXABLE TURNOVER. THIS WAS THE REAS ON WHY THE ASSESSEE DID NOT INCLUDE THE AMOUNT OF FREI GHT IN THE TAXABLE TURNOVER IN THE RETURNS FILED BY IT. NOW IT CANNOT BE SAID THAT THIS WAS A FRIVOLOUS CONTENTION TAKEN UP MERELY FOR THE PURPOSE OF AVOIDING LIABILITY TO PAY TAX. IT WAS A HIGHLY ARGUABLE CONTENTION WHICH REQUIRED SERIOUS CONSIDERATION BY THE COURT AND THE BELIEF ENTERTAINED BY THE ASSESSEE THAT IT WAS NOT LIABLE TO INCLUDE THE AMOUNT OF FREIGHT IN THE TAXABLE TURNOV ER COULD NOT BE SAID TO BE MALA FIDE OR UNREASONABLE. WHAT SECTION 43 OF THE MADHYA PRADESH GENERAL SALES TAX ACT 1958 REQUIRES IS THAT THE ASSESSEE SHOULD HAV E FILED A 'FALSE' RETURN AND A RETURN CANNOT BE SAID TO BE 'FALSE' UNLESS THERE IS AN ELEMENT OF DELIBERATENES S IN IT. IT IS POSSIBLE THAT EVEN WHERE THE INCORRECTNESS OF THE RETURN IS CLAIMED TO BE DUE TO WANT OF CARE ON THE PART OF THE ASSESSEE AND THERE IS NO REASONABLE EXPLANATION FORTHCOMING FROM THE ASSESSEE FOR SUCH WANT OF CARE THE COURT MAY IN A GIVEN CASE INFER DELIBERATENESS AN D THE RETURN MAY BE LIABLE TO BE BRANDED AS A FALSE RETUR N. BUT WHERE THE ASSESSEE DOES NOT INCLUDE A PARTICULAR IT EM IN THE TAXABLE TURNOVER UNDER A BONA FIDE BELIEF THAT HE IS NOT LIABLE SO TO INCLUDE IT IT WOULD NOT BE RIGHT TO CONDEMN THE RETURN AS A 'FALSE' RETURN INVITING ITA NO. 398/M/09 ASSESSMENT YEAR :03-04 7 IMPOSITION OF PENALTY. THIS VIEW WHICH IS BEING TAK EN BY US IS SUPPORTED BY THE DECISION OF THIS COURT IN HINDUSTAN STEEL LTD. V. STATE OF ORISSA [1970] 25 S TC 211 WHERE IT HAS BEEN HELD THAT: '...EVEN IF A MIN IMUM PENALTY IS PRESCRIBED THE AUTHORITY COMPETENT TO I MPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF PROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FRO M A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE....' IT IS ELE MENTARY THAT SECTION 43 OF THE MADHYA PRADESH GENERAL SALES TAX ACT 1958 PROVIDING FOR IMPOSITION OF PENALTY IS PENAL IN CHARACTER AND UNLESS THE FILING OF AN INAC CURATE RETURN IS ACCOMPANIED BY A GUILTY MIND THE SECTION CANNOT BE INVOKED FOR IMPOSING PENALTY. IF THE VIEW CANVASSED ON BEHALF OF THE REVENUE WERE ACCEPTED T HE RESULT WOULD BE THAT EVEN IF THE ASSESSEE RAISES A BONA FIDE CONTENTION THAT A PARTICULAR ITEM IS NOT LIABL E TO BE INCLUDED IN THE TAXABLE TURNOVER HE WOULD HAVE TO SHOW IT AS FORMING PART OF THE TAXABLE TURNOVER IN HIS R ETURN AND PAY TAX UPON IT ON PAIN OF BEING HELD LIABLE FO R PENALTY IN CASE HIS CONTENTION IS ULTIMATELY FOUND BY THE COURT TO BE NOT ACCEPTABLE. THAT SURELY COULD NEVER HAVE BEEN INTENDED BY THE LEGISLATURE. 6. WE ARE THEREFORE OF THE VIEW THAT THE ASSESSEE C OULD NOT BE SAID TO HAVE FILED 'FALSE' RETURNS WHEN IT D ID NOT INCLUDE THE AMOUNT OF FREIGHT IN THE TAXABLE TURNOV ER SHOWN IN THE RETURNS AND THE ASSISTANT COMMISSIONER WAS NOT JUSTIFIED IN IMPOSING PENALTY ON THE ASSESS EE UNDER SECTION 43 OF THE MADHYA PRADESH GENERAL SALE S TAX ACT 1958 AND SECTION 9(2) OF THE CENTRAL SALE S TAX ACT 1956. 7. WE ACCORDINGLY REJECT THE APPEALS INSOFAR AS THE Y ARE DIRECTED AGAINST THE INCLUSION OF THE AMOUNT OF FREIGHT IN THE TAXABLE TURNOVER OF THE ASSESSEE BUT ALLOW THE APPEALS INSOFAR AS THEY RELATE TO IMPOSITION OF PENALTY AND SET ASIDE THE ORDERS PASSED BY THE ASSISTANT COMMISSIONER IMPOSING PENALTY ON THE ASSESSEE. 5.3 NOW COMING TO THE DECISIONS RELIED UPON BY TH E LEARNED AR WHICH ARE AS UNDER:- A) THE PUNJAB & HARYANA HIGH COURT IN THE CASE O F CIT VS. RAJIV GARG &ORS. 3 13 ITR 256 HELD AS UNDER:- PURUSANT TO THE NOTICE U/S 148 THE ASSESSEE FILED THE REVISED RETURN OF INCOME SHOWING HIGHER INCOME. THE SAID RETURN OF INCOME WAS ACCOMPANIED BY A NOTE IN WHICH THE ASSESSEE SUBMITTED THAT HE SURRENDERED THE ENTIRE AMOUNT OF SALE PROCEEDS OF SHARES TO BUY PEACE OF MIND AND TO AVOID HAZARDS OF LITIGATION AND ALSO TO SAVE ITA NO. 398/M/09 ASSESSMENT YEAR :03-04 8 HIMSELF FROM ANY PENAL ACTION. LATER ON ON THE BASIS OF REVISED RETURN THE ASSESSMENT WAS FRAMED AND THE RETURN SUBMITTED BY THE ASSESSEE WAS REGULARIZED AS IT IS. DURING THE COURSE OF ASSESSMENT THE AFORESAID EXPLANATION GIVEN BY THE ASSESSEE WAS NEITHER REJECTED NOR WAS IT HELD TO BE MALA FIDE. THE TRIBUNAL HAS RECORDED A PURE FINDING OF FACT TO THE EFFECT THAT THE REVENUE HAS NOT PLACED ON RECORD ANY MATERIAL OR EVIDENCE TO DISCHARGE ITS BURDEN OF PROVING CONCEALMENT. IN THE ASSESSMENT ORDER NO SUCH FINDING WAS RECORDED. THE DEPARTMENT HAS SIMPLY RESTED ITS CONCLUSION ON THE ACT OF THE ASSESSEE OF HAVING OFFERED ADDITIONAL INCOME IN THE RETURN FILED IN RESPONSE T O THE NOTICE ISSUED UNDER SECTION 148. THE TRIBUNAL HAS FURTHER HELD THAT THE ADDITIONAL INCOME SO OFFERED BY THE ASSESSEE WAS DONE IN GOOD FAITH AND TO BUY PEACE. THEREFORE IN VIEW OF THE AFORESAID FINDING THE TRIBUNAL WAS JUSTIFIED IN UPHOLDING THE ORDER OF THE CIT(A) WHEREBY THE PENALTY IMPOSED U/S 271(1)(C) BY THE AO WAS ORDER TO BE DELETED. B) THE LEARNED AR HAS ALSO RELIED UPON THE DEC ISIONS OF ITAT IN CASES OF NITON VALVE INDUSTRIES (P.) LTD . VS. ACIT [2009] 30 SOT 236 (MUM.) ITO VS. GACL FINANC E LTD. [2009] 30 SOT 360 (MUM.) AND TWIN STAR JUPITE R COOPERATIVE HSG. SOC.LTD. VS. ITO [2009] 31 SOT 4 74 (MUM.) THE ITAT IN THE CASE OF M/S OASIS SECURITIES LTD. IN ITA NO. 846/M/08 FOR AY 2002-03 VIDE ITS OR DER DATED 29 TH JANUARY 2010 CONSIDERED ITS DECISION IN GACL LTD. CITED SUPRA AND OTHER DECISIONS OF ITAT A ND UPHELD THE ORDER OF THE CIT(A) WHO DIRECTED THE AO TO DELETE THE PENALTY LEVIED U/S 271(1)(C). THE RELEVA NT FINDINGS OF THE ITAT REPRODUCED BELOW:- 7.3 NOW COMING TO THE MERITS OF THE CASE WE NOTICED THAT THE AO LEVIED PENALTY U/S 271(1)(C) ON THE GROUND THAT THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME. WHAT IS INACCURATE PARTICULARS OF INCOME WITHIN THE MEANING OF PROVISIONS OF SECTION 271(1)(C) OF THE ACT HAS BEEN DISCUSSED IN DETAILS BY THE ITAT MUMBAI BENCH IN THE CASE OF MIMOSA INVESTMENT CO. PVT. LTD IN ITA NO. 2983/MUM/07 FOR AY 2004-05 ORDER DATED 15.01.09. THE SAID ORDER HAS BEEN FOLLOWED BY THE ITAT IN THE CASE OF ITO VS. GACL LTD. IN ITA NO. 6528/M/05 VIDE ORDER DATED 19.03.2009 THE DECISION CITED BY THE LEARNED AR. THE FACTS OF THE CASE OF ITO VS. GACL LTD WERE THAT THE ASSESSEE CLAIMED LOSS AS LOSS FROM TRADING OF SHARES. THE ASSESSING OFFICER TREATED THE SAID LOSS UNDER EXPLANATION TO SECTION 73 AND TREATED THE SAME AS DEEMED SPECULATION LOSS. THE ASSESSING OFFICER HAS APPORTIONED THE INTEREST AND OTHER EXPENSES ITA NO. 398/M/09 ASSESSMENT YEAR :03-04 9 ATTRIBUTABLE TO SPECULATION BUSINESS INCOME. PENALTY U/S 271(1)(C) LEVIED BY THE AO HAS BEEN CANCELLED BY THE ITAT FOLLOWING THEIR ANOTHER DECISION IN CASE OF MIMOSA INVESTMENT CO PVT LTD ITA NO 2983/MUM/07 FOR AY 2004-05 ORDER DATED 15.01.09 WHEREIN IT WAS HELD THAT THE PROCEEDINGS UNDER SECTION 271(1) (C) CAN BE INITIATED ONLY IF T HE A.O OR THE FIRST APPELLATE AUTHORITY IS SATISFIED I N THE COURSE OF ANY PROCEEDINGS UNDER THE ACT. IF HE IS SATISFIED AS PER CLAUSE (C) THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF SUCH INCOME HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY THE SUM MENTIONED IN SUB-CLAUSE (III) OF CLAUSE (C). THE EXPRESSION USED IN CLAUSE (C) IS H AS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THEREFORE BOTH IN CASES OF CONCEALMENT AND INACCURACY THE PHRASE PARTICULARS OF INCOME ARE USED. IT WILL BE NOTED THAT AS REGARDS CONCEALMENT THE EXPRESSION IN CLAUSE (C) IS HAS CONCEALED THE PARTICULARS OF HIS INCOME AND NOT HAS CONCEALED HIS INCOME. THE EXPRESSIONS 'HAS CONCEALED THE PARTICULARS OF INCOME' AND 'HAS FURNISHED INACCURATE PARTICULARS OF INCOME' HAVE NOT BEEN DEFINED EITHER IN SECTION 271(1)(C) OR ELSEWHERE IN THE ACT. THERE CANNOT BE A STRAIGHT JACKET FORMULA FOR DETECTION OF THESE DEFAULTS OF CONCEALMENT OF PARTICULARS OR OF FURNISHING INACCURATE PARTICULARS OF INCOME. IT DEPENDS UPON THE FACTS OF THE EACH CASE. THERE WAS CONCEALMENT OR NOT IS ORDINARILY A QUESTION OF FACT. ONCE BEARING IN MIND THE CORREC T PRINCIPLES COMES TO THE CONCLUSION THAT THE ASSESSEE HAS DISCHARGED THE ONUS IT BECOMES A CONCLUSION OF FACT. SIMILARLY WHETHER THE EXPLANATION OFFERED BY THE ASSESSEE WAS BONA FIDE OR NOT IS ALSO A QUESTION OF FACT. IN THE ASSESSMEN T PROCEEDINGS THE ITO WHILE ASCERTAINING THE TOTAL INCOME CHARGEABLE TO TAX WOULD BE IN A POSITION TO DETECT THE SPECIFIC OR DEFINITE PARTICULARS OF INCO ME CONCEALED OR INACCURATE PARTICULARS ARE FURNISHED. WHERE IN THE CONSTITUENTS OF INCOME RETURNED SUCH SPECIFIC OR DEFINITE PARTICULARS OF INCOME ARE DETECTED AS CONCEALED THEN EVEN IN THE TOTAL INCOME FIGURE TO THAT EXTENT THEY REFLECT IT WOULD AMOUNT TO CONCEALMENT TO THAT EXTENT. IN THE SAME WAY WHERE SPECIFIC AND DEFINITE PARTICULARS OF INCOME ARE DETECTED AS INACCURATE THEN SUCH FIGURE WILL ALSO MAKE THE TOTAL INCOME INACCURATE I N PARTICULARS TO THE EXTENT IT DOES NOT INCLUDE SUCH INCOME. IN OTHER WORDS THE AO CANNOT INVOKE PROVISION OF SECTION271 (1) (C) ON THE BASIS ROUTIN E AND GENERAL PRESUMPTIONS. WHETHER IT BE A CASE OF ONLY CONCEALMENT OR OF ONLY INACCURACY OF ITA NO. 398/M/09 ASSESSMENT YEAR :03-04 10 PARTICULARS OR BOTH THE PARTICULARS OF INCOME SO VITIATED WOULD BE SPECIFIC AND DEFINITE AND BE KNOWN IN THE ASSESSMENT PROCEEDINGS BY THE ITO WHO ON BEING SATISFIED ABOUT EACH CONCEALMENT OR INACCURACY OF PARTICULARS OF INCOME WOULD BE IN A POSITION TO INITIATE THE PENALTY PROCEEDINGS ON ONE OR BOTH OF THE GROUNDS OF DEFAULT AS MAY HAVE BEEN SPECIFICALLY AND DIRECTLY DETECTED. 7.4 IT WAS ALSO HELD THAT FROM THE SCHEME OF THE ACT TWO IMPORTANT THINGS COME OUT ARE THAT IT IS THE DUTY OF THE ASSESSEE TO FURNISH PARTICULARS OF INCOME WHICH SHOULD BE ACCURATE PARTICULARS SIMULTANEOUSLY HE HAS RIGHT TO CLAIM ALL EXEMPTIONS AND DEDUCTIONS PROVIDED IN THE ACT ACCORDING TO THE ASSESSEE FOR WHICH HE IS ENTITLED. THE DUTY OF THE ASSESSING OFFICER IS TO ASSESS REAL AND CORRECT INCOME IN ACCORDANCE WITH LAW. THE CBDT IN ITS CIRCULAR NO. 14(XL35) OF 1955 DATED 11.04.1955 STATED THAT OFFICERS OF THE DEPARTMENT MUST NOT TAKE ADVANTAGES OF IGNORANCE OF AN ASSESSEE AS TO HIS RIGHTS IT IS ONE OF THEIR DUTIE S TO ASSIST A TAX PAYER IN EVERY REASONABLE WAY .ON THE BASIS OF DETAILED DISCUSSIONS IN THIS REGARD TH E ITAT OBSERVED THAT AFTER FURNISHING PARTICULARS REGARDING DETERMINATION OF INCOME THE ASSESSEE HAS RIGHT TO CLAIM EXEMPTION AND DEDUCTION ACCORDING TO HIM WHICH ARE AS PER LAW .THE ASSESSING OFFICER WHILE DISCHARGING HIS DUTY ALLOW OR DISALLOW ASSESSEES CLAIM AND ARRIVED AT A DIFFERENT FIGURE OF TOTAL INCOME THEN THE TOTAL INCOME DECLARED BY THE ASSESSEE THAT CASE CANNOT BE SAID TO BE A CASE OF FURNISHING INACCURATE PARTICULARS OR CONCEALING OF PARTICULARS OF INCOME. 5.4 IN THE CASE UNDER CONSIDERATION THE CIT(A) HAS HEAVILY RELIED UPON THE LATEST JUDGMENT OF DHARMEND RA TEXTILES (SUPRA).THE APPLICABILITY OF THIS JUDGMENT HAS BEEN DISCUSSED IN AN ANOTHER JUDGMENT BY THE SUPREM E COURT IN THE CASE OF UNION OF INDIA V. RAJASTHAN SP G. & WVG. MILLS 224 CTR 1(SC). THE RELEVANT DISCUSSION O F THE APEX COURT IS REPRODUCED AS UNDER:- 20. AT THIS STAGE WE NEED TO EXAMINE THE RECENT DECISION OF THIS COURT IN DHARAMENDRA TEXTILE CASE (SUPRA). IN ALMOST EVERY CASE RELATING TO PENALTY THE DECISION IS REFERRED TO ON BEHALF OF THE REVENUE AS IF IT LAID DOWN THAT IN EVERY CASE O F NON-PAYMENT OR SHORT PAYMENT OF DUTY THE PENALTY CLAUSE WOULD AUTOMATICALLY GET ATTRACTED AND THE AUTHORITY HAD NO DISCRETION IN THE MATTER. ONE OF US (AFTAB ALAM J.) WAS A PARTY TO THE ITA NO. 398/M/09 ASSESSMENT YEAR :03-04 11 2009] UOI V. RAJASTHAN SPG. & WVG. MILLS (SC) 621 DECISION IN DHARAMENDRA TEXTILE CASE (SUPRA) AND WE SEE NO REASON TO UNDERSTAND OR READ THAT DECISION IN THAT MANNER. IN DHARAMENDRA TEXTILE CASE (SUPRA) THE COURT FRAMED THE ISSUES BEFORE IT IN PARAGRAPH 2 OF THE DECISION AS FOLLOWS : '2. A DIVISION BENCH OF THIS COURT HAS REFERRED THE CONTROVERSY INVOLVED IN THESE APPEALS TO A LARGER BENCH DOUBTING THE CORRECTNESS OF THE VIEW EXPRESSED IN DILIP N. SHROFF V. JOINT CIT 2007 (8) SCALE 304. THE QUESTION WHICH ARISES FOR DETERMINATION IN ALL THESE APPEALS IS WHETHER SECTION 11AC OF THE CENTRAL EXCISE ACT 1944 (THE INSERTED BY FINANCE ACT 1996 WITH THE INTENTION OF IMPOSING MANDATORY PENALTY ON PERSONS WHO EVADED PAYMENT OF TAX SHOULD BE READ TO CONTAIN MENS REA AS AN ESSENTIAL INGREDIENT AND WHETHER THERE IS A SCOPE FOR LEVYING PENALTY BELOW THE PRESCRIBED MINIMUM. BEFORE THE DIVISION BENCH THE STAND OF THE REVENUE WAS THAT THE SAID SECTION SHOULD BE READ AS PENALTY FOR STATUTORY OFFENCE AND THE AUTHORITY IMPOSING PENALTY HAS NO DISCRETION IN THE MATTER OF IMPOSITION OF PENALTY AND THE ADJUDICATING AUTHORITY IN SUCH CASES WAS DUTY BOUND TO IMPOSE PENALTY EQUAL TO THE DUTIES SO DETERMINED. THE ASSESSEE ON THE OTHER HAND REFERRED TO SECTION 271(1)(C) OF THE INCOME-TAX ACT 1961 TAKING THE STAND THAT SECTION 11AC OF THE ACT IS IDENTICALLY WORDED AND IN A GIVEN CASE IT WAS OPEN TO THE ASSESSING OFFICER NOT TO IMPOSE ANY PENALTY. THE DIVISION BENCH MADE REFERENCE TO RULE 96ZQ AND RULE 96ZO OF THE CENTRAL EXCISE RULES 1944 AND A DECISION OF THIS COURT IN CHAIRMAN SEBI V. SHRIRAM MUTUAL FUND [2006] 5 SCC 361 AND WAS OF THE VIEW THAT THE BASIC SCHEME FOR IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) SECTION 11AC OF THE ACT AND RULE 96ZQ(5) OF THE RULES IS COMMON. ACCORDING TO THE DIVISION BENCH THE CORRECT POSITION IN LAW WAS LAID DOWN IN CHAIRMAN CASE [2006] 5 SCC 361 AND NOT IN DILIP CASE [2007] 8 SCALE 304 (SC). THEREFORE THE MATTER WAS REFERRED TO A LARGER BENCH.' (P. 280). AFTER REFERRING TO A NUMBER OF DECISIONS ON INTERPRETATION AND CONSTRUCTION OF STATUTORY PROVISIONS THE COURT OBSERVED AND HELD AS FOLLOWS : '28. IN UNION BUDGET OF 1996-97 SECTION 11AC OF THE ACT WAS INTRODUCED. IT HAS MADE THE POSITION CLEAR THAT THERE IS NO SCOPE FOR ANY DISCRETION. IN PARA 136 OF THE UNION BUDGET REFERENCE HAS BEEN MADE TO THE PROVISION STATING THAT THE LEVY OF PENALTY IS A MANDATORY PENALTY. IN THE NOTES ON ITA NO. 398/M/09 ASSESSMENT YEAR :03-04 12 CLAUSES ALSO THE SIMILAR INDICATION HAS BEEN GIVEN. 29. THE ABOVE BEING THE POSITION THE PLEA THAT THE RULES 96ZQ AND 96ZO HAVE A CONCEPT OF DISCRETION IN-BUILT CANNOT BE SUSTAINED. DILIP N. CASE [2007] 8 SCALE 304 (SC) WAS NOT CORRECTLY DECIDED BUT CHAIRMAN CASE [2006] 5 SCC 361 HAS ANALYSED THE LEGAL POSITION IN THE CORRECT PERSPECTIVES. THE REFERENCE IS ANSWERED....' (P. 302) 21. FROM THE ABOVE WE FAIL TO SEE HOW THE DECISION IN DHARAMENDRA TEXTILE CASE (SUPRA) CAN BE SAID TO HOLD THAT SECTION 11AC WOULD APPLY TO EVERY CASE OF NON-PAYMENT OR SHORT PAYMENT OF DUTY REGARDLESS OF THE CONDITIONS EXPRESSLY MENTIONED IN THE SECTION FOR ITS APPLICATION. 22. THERE IS ANOTHER VERY STRONG REASON FOR HOLDING THAT DHARAMENDRA TEXTILE CASE (SUPRA) COULD NOT HAVE INTERPRETED SECTION 11AC IN THE MANNER AS SUGGESTED BECAUSE IN THAT CASE THAT WAS NOT EVEN THE STAND OF THE REVENUE. THE COURT NOTED THE SUBMISSION MADE ON BEHALF OF THE REVENUE AS FOLLOWS : 622 TAXMAN TAX REPORTS [VOL. 180 '5. MR. CHANDRASHEKHARAN ADDITIONAL SOLICITOR GENERAL SUBMITTED THAT IN RULES 96ZQ AND 96ZO THERE IS NO REFERENCE TO ANY MENS REA AS IN SECTION 11AC WHERE MENS REA IS PRESCRIBED STATUTORILY. THIS IS CLEAR FROM THE EXTENDED PERIOD OF LIMITATION PERMISSIBLE UNDER SECTION 11A OF THE ACT. IT IS IN ESSENCE SUBMITTED THAT THE PENALTY IS FOR STATUTORY OFFENCE. IT IS POINTED OUT THAT THE PROVISO TO SECTION 11A DEALS WITH THE TIME FOR INITIATION OF ACTION. SECTION 11AC IS ONLY A MECHANISM FOR COMPUTATION AND THE QUANTUM OF PENALTY. IT IS STATED THAT THE CONSEQUENCES OF FRAUD ETC. RELATE TO THE EXTENDED PERIOD OF LIMITATION AND THE ONUS IS ON THE REVENUE TO ESTABLISH THAT THE EXTENDED PERIOD OF LIMITATION IS APPLICABLE. ONCE THAT HURDLE IS CROSSED BY THE REVENUE THE ASSESSEE IS EXPOSED TO PENALTY AND THE QUANTUM OF PENALTY IS FIXED. IT IS POINTED OUT THAT EVEN IF IN SOME STATUTES MENS REA IS SPECIFICALLY PROVIDED FOR SO IS THE LIMIT OR IMPOSITION OF PENALTY THAT IS THE MAXIMUM FIXED OR THE QUANTUM HAS TO BE BETWEEN TWO LIMITS FIXED. IN THE CASES AT HAND THERE IS NO VARIABLE AND THEREFORE NO DISCRETION. IT IS POINTED OUT THAT PRIOR TO INSERTION OF SECTION 11AC RULE 173Q WAS IN VOGUE IN WHICH NO MENS REA WAS PROVIDED ITA NO. 398/M/09 ASSESSMENT YEAR :03-04 13 FOR. IT ONLY STATED HE KNOWS OR HAS REASON TO DO. THE SAID CLAUSE REFERRED TO WILFUL ACTION. ACCORDING TO LEARNED COUNSEL WHAT WAS INFERENTIALLY PROVIDED IN SOME RESPECTS IN RULE 173Q NOW STANDS EXPLICITLY PROVIDED IN SECTION 11AC. WHERE THE OUTER LIMIT OF PENALTY IS FIXED AND THE STATUTE PROVIDES THAT IT SHOULD NOT EXCEED A PARTICULAR LIMIT THAT ITSELF INDICATES SCOPE FOR DISCRETION BUT THAT IS NOT THE CASE HERE.' (P. 281) 23. THE DECISION IN DHARAMENDRA TEXTILE CASE (SUPRA) MUST THEREFORE BE UNDERSTOOD TO MEAN THAT THOUGH THE APPLICATION OF SECTION 11AC WOULD DEPEND UPON THE EXISTENCE OR OTHERWISE OF THE CONDITIONS EXPRESSLY STATED IN THE SECTION ONCE THE SECTION IS APPLICABLE IN A CASE THE CONCERNED AUTHORITY WOULD HAVE NO DISCRETION IN QUANTIFYING THE AMOUNT AND PENALTY MUST BE IMPOSED EQUAL TO THE DUTY DETERMINED UNDER SUB- SECTION (2) OF SECTION 11A. THAT IS WHAT DHARAMENDRA TEXTILE CASE (SUPRA) DECIDES. 5.5 WE NOTICED THAT THE JUDGMENT IN DHARAMEND RA TEXTILE (SUPRA) IS APPLICABLE IN CASE WHERE IT WAS FOUND THAT ALL THE CONDITIONS LAID DOWN IN THE SECTION 271(1)(C) ARE SATISFIED. ONCE THE SECTION IS APPLIC ABLE IN THAT CASE THE CONCERNED AUTHORITY WOULD HAVE NO DISCRETION IN QUANTIFYING THE AMOUNT AND PENALTY MU ST BE IMPOSED AS PRESCRIBED / DETERMINED UNDER THE SECTION. IN THE LIGHT OF ABOVE DISCUSSION WE FIND T HAT IN THE CASE UNDER CONSIDERATION CONDITIONS LAID DOWN I N SECTION 271(1)(C) ARE NOT SATISFIED THEREFORE PENAL TY PROVISIONS OF SECTION 271(1)(C) NOT APPLICABLE EVEN IN ACCORDANCE WITH ABOVE JUDGMENT OF THE APEX COURT. 8. IN THE LIGHT OF THE ABOVE DISCUSSION WE FIND THA T THE FIRST ITEM ON WHICH AO LEVIED PENALTY SOFTWARE EXPENSES TREATED AS CAPITAL IN QUANTUM MATTER THIS ISSUE HAS BEEN SENT BACK TO THE FILE OF THE AO SINCE BASIS ON WHICH AO LEVIED PENALTY HAS NOT BECOME FINAL. UNDE R THE CIRCUMSTANCES PENALTY LEVIED ON THE BASIS OF ORIGINAL FINDING OF THE AO CANNOT BE SUSTAINED. WE FIND THAT THE CIT(A) HAS RIGHTLY CANCELLED THE P ENALTY ON THIS ISSUE. AS REGARDS OTHER ITEMS ON WHICH AO LEVIED PENALTY WE N OTICE THAT THE AO HAS FAILED TO POINT OUT ANY SPECIFIC PARTICULAR WHICH H AVE EITHER BEEN CONCEALED ITA NO. 398/M/09 ASSESSMENT YEAR :03-04 14 OR INACCURATE. IN THE LIGHT OF OUR DISCUSSION WE N OTICE THAT ASSESSEES CLAIM FOR PROVISION OF CASH DEPRECIATION ON KNOW-HOW WI THOUT CALCULATION OF DEDUCTION THESE ARE THE BONAFIDE CLAIMS OF THE ASSE SSEE WHICH DOES NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS THE REFORE CONDITIONS LAID DOWN U/S.271(1)(C) DOES NOT SATISFY . IN THE LIGHT OF THE ABOVE WE ARE INCLINED TO UPHOLD THE ORDER OF THE CIT(A). THE GRO UND TAKEN BY REVENUE IS DISMISSED. 9. IN THE RESULT REVENUES APPEAL STANDS DISMISSED . ORDER PRONOUNCED ON 24.2.2010. SD/- SD/- ( P. MADHAVI DEVI ) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED: 24.2.2010. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI. ITA NO. 398/M/09 ASSESSMENT YEAR :03-04 15 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 22.2.10 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 23.2.10 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 24.2.10 SR.PS/PS 7. FILE SENT TO THE BENCH CLERK 25.2.10 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER