CIT vs. DCM SHRIRAM CONSOLIDATED LTD

IN THE HIGH COURT OF DELHI AT NEW DELHI . . . ITA 162/2012 . . . CIT ..... Appellant . Through: Mr. Sanjeev Sabharwal, Sr. Standing counsel . versus . . . DCM SHRIRAM CONSOLIDATED LTD ..... Respondent . Through: Mr. V P Gupta and Mr. Basant Kumar, Advs. . . . CORAM: . HON'BLE MR. JUSTICE SANJIV KHANNA . HON'BLE MR. JUSTICE R.V.EASWAR . . . O R D E R . 16.03.2012 . . . Revenue by this appeal impugns order dated 14.7.2011 passed by the Tribunal affirming the order of the CIT(Appeals) deleting penalty under Section 271(1)(c) of the Income Tax Act, 1961 (?Act?, for short). The appeal pertains to assessment year 2006-07. . 2. Penalty was imposed to two grounds. The Assessing Officer had made disallowance under Section 14A of the Act by applying Rule 8D. On the first aspect it is noticed that this Court has held that Rule 8D is not retrospective and will not apply to assessment year 2006-07. On the second aspect it is noticed while computing profits under Section 115JB the assessee had not added back provisions made for bad debt. However, bad and doubtful debts had been added back under the normal provisions. 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 CIT v. 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 penalty. . No substantial question of law arises. The appeal is dismissed. . . . SANJIV KHANNA, J . . . . . . . R.V.EASWAR, J . MARCH 16, 2012 . vld . . . $ 35 .