IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: A: NEW DELHI
BEFORE SHRI J.S. REDDY, ACCOUNTANT MEMBER
AND SHRI GEORGE GEORGE K, JUDICIAL MEMBER
ITA No. 4886/Del/2013
Assessment Year 2007-08
ACIT vs. M/s.Beekman Heiix India Consulting P. Ltd.
Circle 1 (1) 310, A-Block, 3rd Floor,
Gurgaon Iris Tech Park, Sohna Road, Sector-48
Gurgaon
(PAN AACCB88655R)
(Appellant) (Respondent)
Appellant by : Smt. Parvinder Kaur, DR
Respondent by : Shri Deepak Malik, Advocate
ORDER
PER GEORGE GEORGE K, JUDICIAL MEMBER
This appeal at the instance of the department is directed against CIT(A)
order dated 21.6.2013. The relevant assessment year is 2007-08.
2. The solitary issue that arises for our consideration is whether the CIT(A) is
justified in deleting the penalty imposed u/s 271(1)(c) of the Act amounting to
Rs. 4,37,711/-.
3. Briefly stated the facts of the case are as follows :-
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That assessment u/s 143(3) was completed on 19.11.2009 at total income
of Rs. 1,65,71,920/- whereby the AO made the following disallowances :-
(i) Call option fees of Rs. 53,12,500/- was disallowed in full.
(ii) Feasibility study charages of Rs. 11,93,827/- was treated as mortizable
expenses u/s 35D and 4/5th of these were disallowed.
(iii) Disallowance of Rs. 2,13,126/- u/s 14A
4. The assesee preferred an appeal against the assessment order before the
Ld. CIT( Appeals)-V, New Delhi who vide order dated 22.02.2011 in appeal No
78/09- 10 deleted the disallowances mentioned in point no. 1 above and upheld
the disallowances mentioned in points no. 2 and 3 above.
5. Subsequently, the Assessing Officer levied penalty u/s 271(1)© amounting
to Rs. 4,37,711/- on 28.03.2011. Against the penalty order the assessee
preferred an appeal before the Ld. CIT(A} who vide Its order dated 21.6.2013
deleted the entire penalty holding that there is no element of concealment in
cases where the assessee has claimed certain expenses as deductible and those
expenses have subsequently been disallowed by the A.O. Ld. CIT(A) placed
reliance on decision in CIT vs Reliance Petro products Ltd. 230 CTR 320.
6. The revenue being aggrieved is in appeal before us raising the following
grounds :-
i) "Whether on the facts and circumstances of the case, Ld. CIT(A) was right
in deleting the penalty u/s 271(1)(c) by holding that assessee cannot be
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said to have concealed its income in cases where disallowance of
expenses has been made by the AD. Ld. CIT(A)'s view is not conformity
with the view taken by jurisdiction High Court in the case of CIT vs
Rubber Udyog Vikas P. Itd. 335 ITR 558."
ii) "Whether on the facts and circumstances of the case, Ld. CIT(A) was right
in ignoring the fact that in the present case, assessee had wrongly
claimed deduction while being aware of well settled legal position, in
which case penalty u/s 271(1)(c) is attracted as laid down in CIT vs
Rubber Udyog Vikas P. Ltd, 335 ITR 558."
iii) "The appellant craves for the permission to add, delete or amend the
grounds of appeal before or at the time of hearing of appeal."
7. Ld. Authorised Representative reiterated the assesee's submissions made
before the Income Tax Authority and supported the findings of the CIT(A).
8. We have heard rival submissions and perused the material on record. The
CIT(A) has made threadbare analysis of disallowance of expenditure made in
the quantum assessment which had resulted in the imposition of penalty u/s
271(1)(c) of the Act and had come to a correct conclusion that two disallowance
of expenditure is only an incorrect claim and does not amount to concealment of
income. The conclusions /findings of the CIT(A) have not been dispelled by the
revenue. The CIT(A)'s reliance on the various case laws on the subject is apt to
the facts of this case. The revenue in its grounds of appeal relied on the case of
CIT vs. Rubber Udyog Vikas (P) Ltd. 335 ITR 558 (2011 (P&H). This decision has
been taken note of by CIT(A) at para 3.8 of the impugned order. The dictum laid
down in case of Rubber Udyog Vikas (P) Ltd. is that incorrect claim would not
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tantamount to furnishing of inaccurate particulars unless it is established that
assesee has acted with malafide intention. The decision relied on by the revenue
is in no way helpful to the case of the revenue. On the contrary it help the
assessee's case. For the aforesaid reason, we are of the view that CIT(A)'s
order is correct and in accordance with law and no interference is called for.
8. In the result appeal filed by the revenue is dismissed.
This decision was pronounced in the Open Court on 18th July, 2014.
sd/- sd/-
(J.S. REDDY) ( GEORGE GEORGE K)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Date 18th July, 2014
*Veena
Copy of order forwarded to:
1. Appellant
2. Respondent
3. CIT(A)
4. CIT
5. DR
By Order
Asstt. Registrar, ITAT
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