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DCIT, Circle 10(1),New Delhi vs. M/s DCM Shriram Consolidated Ltd.,5th floor, Kanchanjunga Building,18, Barakhamba Road,New Delhi
July, 12th 2012
                                                              ITA NO. 2140/Del/2012

                         DELHI BENCH "B", NEW DELHI
                             I.T.A. No. 2140/Del/2012

                                  A.Y. : 2005-06

DCIT, Circle 10(1),                     vs. M/s DCM Shriram Consolidated
New Delhi                                   Ltd.,
                                            5th floor, Kanchanjunga Building,
                                            18, Barakhamba Road,
                                            New Delhi
                                            (PAN/GIR NO. : AAACD0097R)
(Appellant )                                (Respondent )

               Assessee by               :   Sh. V.P. Gupta & Basant Kumar,
            Department by                :   Sh. J.S. Ahlawat, Sr. D.R.

      This appeal by the Revenue is directed against the order of the

Ld. Commissioner of Income Tax (Appeals)-XVI, New Delhi                    dated

29.11.2011 pertaining to assessment year 2005-06.

2.    The        issue raised in the appeal is that Ld. Commissioner of
Income Tax (A) erred in confirming the levy of penalty u/s. 271(1)(c)
of the Income Tax Act, 1961.

3.    In    this case assessee company filed return of income showing
the total income of ` 58,21,77,574/-. The tax payable as per normal
provisions of Income Tax Act was shown as ` 21,30,33,327/-.                   The

                                                         ITA NO. 2140/Del/2012

assessee company in the above return has also computed tax payable
u/s. 115JB of the IT Act at ` 9,68,11,559/-. The Assessing Officer made
the following disallowances in this case.

           a)   Deduction u/s. 80IA of the normal provisions of the
                computation was rejected.

           b)   Foreign tour expenses are disallowed.

           c)   Expenses u/s. 14A made in the normal provisions of
                the computation was disallowed.

           d)   Addition on account of differential sugar cane price.

           e)   Provision for doubtful debt.

           f)   Provision for gratuity.

3.1   The additions made on account of (a), (b), (c), (d) & (f) above
were deleted by the Ld. Commissioner of Income Tax (A) and the same
was also confirmed by the ITAT, Delhi. Assessing Officer levied the
penalty of ` 7,65,000/- on account of addition of ` 10200000/- being
provision of doubtful debts.

4.    Upon assessee's appeal Ld. Commissioner of Income Tax (A) held
that he was in agreement with the assessee's counsel submission that
since the tax payable by the assessee as per the provisions of the
Income Tax Act, whether before or after the passing of the assessment
order by the Assessing Officer, was more than the tax payable on the
book profits computed in accordance with section 115JB of the Act, it
implies   that the tax liability of the assessee would not have been
affected had it shown in its return of income, the book profits as
computed by the Assessing Officer.        Ld. Commissioner of Income Tax

                                                         ITA NO. 2140/Del/2012

(A) further noted that adjustment on account of provision for bad and
doubtful debts    was upheld   in   appeal on account of retrospective
amendment made to section 115JB.        Ld. Commissioner of Income Tax
(A) further   noted that the   penalty for concealment levied by the
Assessing Officer    in A.Y. 2006-07 in the case of the assessee for
similar addition made to the book profit u/s. 115JB was deleted by the
Ld. Commissioner of Income Tax (A).        Considering the above, Ld.
Commissioner of Income Tax (A) held that in the year under appeal as
well, when the assessee filed its return of income, the retrospective
amendment to section 115JB, regarding the claim in respect of bad
and doubtful debts, was not on the statute.        Ld. Commissioner of
Income Tax (A) further held that no wrong or malafide claim can be
said to have been made by the assessee while filing             its return.
Accordingly, Ld. Commissioner of Income Tax (A) deleted the penalty
imposed by the Assessing Officer in this regard.

5.   Against the above order the Revenue is in appeal before us.

6.   We have heard the rival contentions in light of the material
produced and precedent relied upon.     Ld. Counsel of the assessee at
the threshold    submitted that on account of similar additions in A.Y.
2006-07 and 2007-08, the Tribunal had deleted the levy of penalty in
the hands of the assessee.

7.   Ld. Departmental Representative could not controvert             these
submissions of the counsel for the assessee.

8.   We have carefully considered the submissions and perused the

records.   We find that similar addition was levied   in the hands of the

assessee for A.Yrs. 2006-07 & 2007-08. For A.Y. 2007-08 Tribunal had

                                                        ITA NO. 2140/Del/2012

noted that for A.Y. 2006-07 the matter had traveled to the Hon'ble

High Court and the Hon'ble High Court had confirmed the deletion of

penalty by observing as under:-

               "CIT(Appeals) and the tribunal have deleted the said
               penalty observing that the position became clear
               when the retrospective amendment was made w.e.f.
               1.4.2001 vide Finance (No. 2) Act, 2009.             In the
               present case, the assessee had filed the return on
               income on 29.11.2006, which was revised                   on
               31.3.2008.    These    are    before   the   retrospective
               amendment in 2009.           The assessee had relied on
               C.I.T. vs. HCL Comnet System and Services                Ltd.
               (2008) 305 ITR 409 (SC) and submitted that no
               adjustment was required to be made for provision for
               bad and doubtful debts under           clause (c) of the
               Explanation to Section 115JB. In these circumstances,
               we feel the   Tribunal was justified in accepting        and
               holding that the case is covered by Explanation 1
               Clause (B) to Section 271(1) and had correctly
               dismissed the appeal of the Revenue deleting the

               No substantial question of law arises.       The appeal is

                                                        ITA NO. 2140/Del/2012

8.1   Respectfully following the precedents as above, we confirm the

order of the Ld. Commissioner of Income Tax (A) wherein the penalty

has been deleted.

9.    In the result, the appeal filed by the Revenue stands dismissed.

      Order pronounced in the open court on 10/7/2012.

        Sd/-                                            Sd/-

 [R.P. TOLANI]                              [SHAMIM YAHYA]
JUDICIAL MEMBER                             ACCOUNTANT MEMBER

Date 10/7/2012
Copy forwarded to: -
1.    Appellant 2.     Respondent           3.    CIT   4.     CIT (A)
5.    DR, ITAT

                            TRUE COPY
                                                  By Order,

                                                    Assistant Registrar,
                                                    ITAT, Delhi Benches

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