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Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL
Before: SHRI BEFORE SHRI G.D. AGRAWALG.D. AGRAWALG.D. AGRAWAL & G.D. AGRAWAL & AND & SHRI SUDHANSHU SRIVASTAVA SHRI SUDHANSHU SRIVASTAVASHRI SUDHANSHU SRIVASTAVA SHRI SUDHANSHU SRIVASTAVA
PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP :- PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP This appeal by the assessee for the assessment year 2005-06 is directed against the order of learned CIT(A)-VIII, New Delhi dated 14th October, 2011.
The assessee has challenged the levy of penalty by the Assessing Officer u/s 271(1)(c) of the Income-tax Act, 1961.
The facts of the case are that the Assessing Officer had levied the penalty amounting to `9,18,592/- in respect of the following two additions/disallowances :-
(i) Disallowance of depreciation on West Tower - `2,74,500/-
2 ITA-5085/Del/2011 (ii) Disallowance of interest - `22,35,834/-
On appeal, learned CIT(A) sustained the penalty in respect of disallowance of depreciation. However, in respect of disallowance out of interest, he directed that the penalty may be levied on the amount of `4,40,071/-. The Revenue has accepted the order of learned CIT(A) while the assessee is in appeal against the penalty sustained.
We have heard the arguments of both the sides and have perused the material placed before us. After considering the facts of the case and submissions of both the sides, we are of the opinion that the issue of levy of penalty u/s 271(1)(c) in respect of the above two disallowances is squarely covered in favour of the assessee by the decision of Hon’ble Apex Court in the case of CIT Vs. Reliance Petroproducts Pvt.Ltd. – (2010) 322 ITR 158 (SC), wherein Hon’ble Apex Court held as under:-
“Where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under section 271(1)(c). A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars.”
The ratio of above decision of Hon’ble Apex Court would be squarely applicable to the facts of the assessee’s case. The assessee has disclosed all material facts in respect of both the items and, admittedly, the details supplied by the assessee in its return of income are not found to be incorrect or erroneous or false. Accordingly, we, respectfully following the above decision of Hon’ble Apex Court, hold
3 ITA-5085/Del/2011 that no penalty u/s 271(1)(c) of the Act is leviable in respect of both the disallowances. The same is deleted.
In the result, the appeal of the assessee is allowed. Decision pronounced in the open Court on .12.2016.
(SUDHANSHU SRIVASTAVA SUDHANSHU SRIVASTAVA) (G.D. AGRAWAL G.D. AGRAWAL) SUDHANSHU SRIVASTAVA SUDHANSHU SRIVASTAVA G.D. AGRAWAL G.D. AGRAWAL JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VK.