Income Tax Appellate Tribunal - Delhi
Toscana Lasts Ltd., New Delhi vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH 'H' : NEW DELHI)
BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER
AND
SHRI C.M. GARG, JUDICIAL MEMBER
ITA No.4600/Del./2010
(ASSESSMENT YEAR : 2000-01)
M/s. Toscana Lasts Limited, vs. ITO, Ward 16 (3),
Thapar House, 124, Janpath, New Delhi.
New Delhi - 110 001.
(PAN : AAACT3805H)
(APPELLANT) (RESPONDENT)
ASSESSEE BY : Shri P.C. Yadav, Advocate
REVENUE BY : Shri Sameer Sharma, Senior DR
ORDER
PER B.C. MEENA, ACCOUNTANT MEMBER :
This appeal filed by the assessee emanates from the order of CIT (A)- XIX, New Delhi dated 11.08.2010 for the assessment year 2000-01.
2. The assessee is engaged in the business of manufacturing and sale of wooden shoe lasts, i.e. wooden pieces put in the shoes to save it from collapsing. The assessment u/s 143(3) was made on 28.02.2003 and the following additions were made :-
(i) Administrative expenses payable to M/s. APR Ltd. Rs.3,89,78,000/-
(ii) Value of unsaleable stock of 2282 pairs of wooden
lasts written off Rs. 8,57,119/-
(iii) Unpaid expenses Rs. 72,794/-
Rs.3,99,07,913/-
2 ITA No.4600/Del./2010
The assessee filed audited accounts along with the return of income declaring total income at Rs.2,12,05,670/- which was set off against the unabsorbed depreciation and business losses of earlier years. The total business loss of Rs.2,27,88,104/- and unabsorbed depreciation of Rs.7,27,38,068/- available with the assessee as per the return of income filed. The Assessing Officer initiated the penalty proceedings u/s 271(1)(c) and levied on 26.06.2009. The CIT (A) confirmed the levy of penalty. Now, the assessee is in appeal before us by taking the following grounds of appeal :-
"1. That the learned Commissioner of Income-tax (Appeals) has erred on facts and in law in dismissing the appeal filed by the appellant company in respect of order u/s 271(1)(c) of the Act levying penalty of Rs.1,60,00,000/-.
2. Without prejudice to ground no.'l' above, that the learned Commissioner of Income-tax (Appeals) has erred on the facts and circumstances of the case in confirming the levy of penalty in respect of disallowance of payments Rs.3,89,78,000/- towards administrative charges (other than expenses relating to production & sale) made to M/s. APR Ltd. as not related to the business of the appellant company particularly when the appellant company did not have the requisite infrastructure to perform necessary administrative tasks as is evident from the assessment records of various assessment years.
2A. Without prejudice to ground no. '2' above, that the learned Commissioner of Income-tax (Appeals), on the facts and circumstances of the case, has erred in confirming the levy of penalty without bringing on record any material to show that the administrative expenses of Rs.3,89,78,000/- did not relate to business or were expenses of personal or capital nature and hence not allowable u/s 37 of the Act.3 ITA No.4600/Del./2010
2B. Without prejudice to ground nos. '2' and '2A' above, that the learned Commissioner of Income-tax (Appeals) on the facts and circumstances of the case has erred in confirming the imposition of penalty in respect of disallowance of Rs.3,89,78,000/- without considering that no opportunity was allowed to this appellant to explain in writing why penalty should not be imposed on the aforesaid amount and the order so passed is against natural justice and deserves to be quashed.
3. Without prejudice to ground no. 1 above, that the learned Commissioner of Income-tax (Appeals) has erred in confirming the levy of penalty in respect of disallowances/claims for write off of un-saleable stocks Rs. 8,57,119/- on the ground that such un-saleable stocks were not removed from god owns and / or such goods were not put to sale.
3A. Without prejudice to ground no. '3' above, that the learned Commissioner of Income Tax (Appeals) has erred in confirming the penalty on surmises and conjectures without referring or bringing on record any material to show that the claim for write off of stocks of Rs.8,57,119 was false and merely because the AO did not agree with the assessee with regard to write off of such stocks and that such disagreement tantamounted to concealment of income or furnishing of inaccurate particulars of income.
4. Without prejudice to ground no. '1' above, that the learned Commissioner of Income-tax (Appeals) has erred on facts and circumstances of the case in justifying the levy of penalty in respect of expenses amounting to Rs.72,794/- lying unpaid as on March 2003 out of claim of Rs.3,96,801/- made in accounts in the year under appeal i.e. asst. year 2000-01 treating the liability as unascertained liability. The same is admissible in accordance with the mercantile system/accrual principle being followed by the appellant company.
4A. That without prejudice to ground no. '4' above, that the learned Commissioner of Income Tax (Appeals) has erred in holding that the claim for expenses of Rs.3,96,801/- made in accounts in the assessment year 2000-01 has been with the intention to reduce the year's income for the purpose of payment of tax and that the appellant company is liable to be hit within 4 ITA No.4600/Del./2010 the mischief of section 271(l)(c) without pointing out any material in support of this finding.
5. Without prejudice to ground no. '1' to '4A' above, that the learned Commissioner of Income-tax (Appeals) has erred in law and on facts in dismissing the appeal against the order of penalty on disallowances of administrative expenses of Rs.3,89,78,000/- in spite of the fact that the assessing officer has not recorded any satisfaction that the said disallowances call for initiation of penalty proceedings as has been recorded in various paragraphs of assessment order in respect of payments of interest of Rs.37,97,357/-, Bad debt written off Rs.8,65,014/- etc.
6. Without prejudice to grounds no. '1' to '5' above, that the learned Commissioner of Income-tax (Appeals) has erred in confirming the levy of penalty in respect of various disallowances of expenses in assessment without appreciating that disallowances in assessment do not ipso-facto call for imposition of penalty, more particularly when there is complete absence of concealment of any income or filing of any inaccurate particulars as provided in section 271(l)(c) of the Act, 1961 and that the assessee company had huge accumulated/brought forward losses amounting to Rs.9,55,26,169/- and was not liable to pay any tax and there was, therefore, no question of any concealment or furnishing inaccurate particular of income as per the law laid down and applicable at the relevant time. (The explanation 4 (a) below section 271(l)(c) is inserted through Finance Act, 2002, w.e.f. 1- 4-2003 and is not applicable to the assessment year under consideration).
7. That the order is otherwise bad in law and on facts.
8. That the above grounds are independent and without prejudice to each other.
9. That the Appellant craves leave to amend, alter, add or forego any of the above grounds."
3. While pleading on behalf of the assessee in grounds no.2 to 2B, the ld. AR submitted that the addition of Rs.3,89,78,000/- was made by the 5 ITA No.4600/Del./2010 Assessing Officer for reasons that assessee has not got any benefit out of these expenses and assessee failed to justify that these expenses are incurred wholly and exclusively for the purpose of business. The ITAT confirmed the addition with the observation that assessee has ultimately discharged its liability by issuing preferential shares. He also submitted that in the quantum appeal, the benefit of waiver of loan came to the assessee out of these expenses was ignored. The ld. AR submitted that the quantum additions and penalty proceedings are two separate and distinct proceedings. The assessee submitted that agreement, debit note of these expenses, ledger account and return of income of M/.s APR Ltd. were submitted during the assessment proceedings and in penalty proceedings also, the assessee also submitted the confirmation of the payee company in order to prove the bonafide and genuineness of these expenses. All the evidences in this regard are placed at pages 32 to 36 of the paper book. The Assessing Officer as well as the CIT(A) has not brought on record anything to prove that the documents submitted by the assessee during the assessment proceedings as well as in penalty proceedings are false. The Assessing Officer and CIT (A) relied only on the findings of the assessment proceedings which have no relevance in the penalty proceedings. For this, ld. AR relied on the judgment of Hon'ble Calcutta High Court in the case of CIT Vs Bimal Kumar Damini - 261 ITR 857(Cal.) wherein it is held that observations made by the Appellate Tribunal 6 ITA No.4600/Del./2010 in quantum proceedings are not a finding for the purpose of penalty proceedings and are not binding in penalty proceedings. Ld. AR also relied on the case of CIT Vs J.K. Synthetics - 219 ITR 267 (Del.) wherein it is held that penalty proceedings are different from assessment proceedings and separate and distinct provisions have been enacted in the statute for initiation of the penalty proceedings, therefore, the findings recorded by the Tribunal in quantum appeal cannot be held to be decisive. Ld. AR further submitted that the assessee's claim is bonafide. The expenses payable to M/s APR Ltd. were shown separately by the assessee in profit and loss account and which has been discussed by the auditor categorically in the audit report, which is placed at pages 50 and 51 of the paper book. He submitted that the assessee has made a claim in an open and bona fide manner without concealing any thing from the department. Therefore, it is not a case of concealment at all and that it cannot be termed as furnishing of inaccurate particulars of income. The ld. AR further submitted that assessee was in possession of huge losses pertaining to earlier years as is evident from the order of assessment wherein the income of the assessee has been finally assessed at NIL. He submitted that no prudent corporate entity would make any bogus claim to enhance its losses in such circumstances. He submitted that whatever claim was made by the assessee is made in good faith and upon the advice of the auditors and the employees. At the most, such claim can be termed as a wrong claim but the 7 ITA No.4600/Del./2010 same cannot be put at par with false claim. For this, he relied on the decision of ITAT, Delhi Bench in the case of Prakash Industries in ITA No.1420/Del/2010. A copy of the order was supplied. Ld. AR further submitted that similar type of expenses in the case of sister concern, M/s. Newquest Corporation Ltd., have been allowed by the ITAT, Nagpur Bench and he draw our attention to the copy of the order of ITAT placed at pages 141 to 171 of the paper book. He further submitted that Explanation 1 of section 271(1)(c) has two clauses. Clause A is applicable where an assessee fails to offer an explanation. Thus, this clause is not applicable in assessee's case as assessee has submitted an explanation which has not been proved false by the revenue authorities. Clause B of Explanation 1 provides that where an assessee offered an explanation which he is not able to substantiate and failed to prove that such explanation is bona fide and that all the facts are disclosed by him. It is pertinent to mention here that clause B has been inserted w.e.f. 10.09.1986. On reading of purview, the following two conditions must be satisfied :-
(i) Assessee offers explanation which he is not able to substantiate;
and
(ii) he fails to prove that such explanation is bonafide; and all the facts relating to the same have been disclosed by him He submitted that at this juncture, it would be relevant to take note that conjunction "and" has been used by the legislature between these two 8 ITA No.4600/Del./2010 essential conditions of clause B. Therefore, before charging an assessee with the rigors of clause B, all the above conditions must be cumulatively satisfied and if anyone of the conditions is missing then the rigors of this clause are not applicable. For this proposition, he relied on the decision of ACIT vs. VIP industry in ITA No.5424/Mum./2006 dated 20.03.2009, placed at page 72 of the paper book. He further submitted that in the case of M/s. Pfizer Limited vs. DCIT in ITA No.154/Mum/2010 dated 25.01.2012, ITAT, Mumbai Bench 'C' had considered the provisions of clause B of Explanation 1 and held as under :-
"14. At this juncture it would be relevant to take note that conjunction "and" has been used by the legislature between these two essential conditions of clause (B) of Explanation (1) to section 271(1)(c). It shows that both the above referred conditions must be cumulatively satisfied so as to bring a case within the mischief of this clause. If only one condition is satisfied and the other is not, the penalty would not follow. In other words, if the person offers an explanation which he is not able to substantiate [being condition(i) above] but succeeds in proving that such explanation is bona fide and that all the material facts relating to the same were disclosed by him, [being condition (ii) above], the penalty would not be attracted."
Ld. AR further submitted that the provisions of section 271(1)(c) are discretionary provisions and the same has to be exercised in judicious manner at least in those cases where there is no evidence to prove that the claim of the assessee is bogus and it has not been made to reduce tax liability. In assessee's case, there is huge carry forward losses and depreciation to be set 9 ITA No.4600/Del./2010 off, therefore, there cannot be any intention to furnish inaccurate particulars of income or to make bogus claims. Ld. AR relied on the following decisions where provisions section 271(1)(c) was held to be discretionary :-
(i) CIT vs. Maya Rani - 92 ITR 349 (Del);
(ii) Hindustan Steel Ltd. vs. State of Orissa - 83 ITR 276 (SC);
(iii) Prem Arora in ITA No.4702 of 2010 (Del.)(ITAT).
Ld. AR further submitted that the explanation furnished by the assessee has not been proved false. The assessee has procured services from M/s APR. In support of this, the assessee has submitted a copy of agreement executed between the assessee and M/s APR for the services. M/s. APR provided the services to the assessee and had charged the amount. While confirming the addition, the ITAT has also observed that payment has also been made and ultimately shares have been issued. Thus, the ITAT has not dismissed the assessee's appeal by holding that expenses incurred by the assessee were bogus. The ITAT has accepted that there was a pool arrangement of sharing of services. At the level of assessment proceedings, the assessee could not point out that as a result of the services, the assessee get benefit of waiver of liability of Rs.7,95,42,313/- in the year under consideration. Further, it was pleaded before the CIT (A) which has not been considered in the pleadings of the assessee in this regard. The allocation of shares to the payee company in order to discharge the liability of these expenses has been duly disclosed by 10 ITA No.4600/Del./2010 the assessee with the Registrar of Companies and there is no evidence that the allocation of the shares was not proved. This fact has been duly acknowledged by the ITAT in its order in the quantum proceedings. The assessee has incurred the liability and discharged the same by issuing the shares and such issuance of shares in lieu of outstanding liability is permissible and admissible business expense, as held by Hon'ble Delhi High Court in the case of CIT vs. Auto Kashyap Ltd. reported in 330 ITR 435 (Del.). Ld. AR further submitted that during the penalty proceedings, the assessee has filed confirmation of M/s APR Limited to whom these expenses were payable. The CIT (A) has not considered the same and confirmed the penalty. The assessee could obtain the confirmation only on 20.03.2010 when the quantum proceedings were culminated. However, this confirmation was filed during the penalty proceedings. Such confirmation of third party cannot be discarded in a summary manner because no third party will give false evidence to oblige an assessee. For this proposition, ld. AR relied on the decision of Hon'ble Allahabad High Court in the case of Sheo Narian Duli Chand reported in 72 ITR 766 wherein it is held that there is no presumption that witnesses appearing for an assessee come forward to give false evidence to oblige the assessee. He submitted that if the CIT (A) had any doubt then he could have verified the confirmation from the executor of the confirmation before upholding the penalty, as the powers of CIT (A) are coterminous with 11 ITA No.4600/Del./2010 of Assessing Officer, as held by the Hon'ble Apex Court in the case of Kanpur Coal Syndicate reported in 53 ITR 225 (SC). He further submitted that M/s. APR Ltd. to whom the impugned expenses were payable was also regularly assessed to tax and filing the return of income where no adverse inference can be drawn. He further submitted that assessee has made a true and correct disclosure in his return of income. He also submitted that in the case of CIT vs. M/s. Reliance Petroproducts Pvt. Ltd. - 322 ITR 158 (SC), Hon'ble Supreme Court has held that inaccuracy and concealment has to be judged from the return of income of the assessee and he draw our attention to the relevant observation of the Hon'ble Supreme Court which is reproduced as under "Reading the words "inaccurate" and "particulars" in conjunction, the must mean the details supplied in the return which are no accurate not exact or correct not according to truth 0 erroneous. In this case, there is no finding that any details supplied by the assessee in its return were found to be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty under s.
271(1)(c)."
He submitted that Hon'ble Supreme Court has confirmed the view taken in the case of Dilip Shroff to the extent of interpretation of words "inaccurate particulars" and held that mere disallowance of a claim will not ipso facto warrant penalty. He pleaded that no penalty can be levied in such a disallowance. He also relied on the decision of ITAT, Mumbai Bench in the case of Sanghvi Swiss Refill in ITA No.3893 of 2007 decided on 07.05.2010 12 ITA No.4600/Del./2010 for the proposition that when there is no finding of the AO that the details furnished by the assessee are incorrect or erroneous or false penalty is not leviable. He also held that similar view has been held by the ITAT, Delhi Bench 'B', New Delhi in the case of ITO vs. DSL Software Ltd. in ITA Nos.861 & 862/Del/2011 dated 09-03-2012 and he draw our attention to the relevant para of the order. He also relied on the decision of ITAT, Mumbai Bench 'A' in the case of ITO vs. Litolier Interior Pvt. Ltd. in ITA No.2795/Mum/2007 dated 30.10.2010 and pleaded that on similar circumstances, penalty had not been levied.
4. While pleading on Ground Nos.3 & 3A in respect of disallowance of Rs.8,57,119/- of stock written off, ld. AR submitted that these stocks were obsolete and auditors have certified this in their report. He also submitted that the disallowance of Rs.8,57,119/- in respect of write off of non-movable goods was made without any basis. The Assessing Officer held that no basis of working out the cost of scrap value of such goods was submitted and CIT (A) upheld it on account of excise approval was not granted and goods were not removed. The CIT (A) has confirmed the addition only because assessee has failed to obtain necessary approval from the excise authorities in this regard. The assessee has made this claim in a bonafide manner, therefore, such disallowance should not have been made. The obsolete stocks are allowed on provisional basis as held by ITAT, Delhi Bench 'C' in the case of 13 ITA No.4600/Del./2010 Pepperi + Fuchs (India) Ltd. vs. DCIT reported in (2006) 6 SOT 10 and a copy of the same was furnished. It was a bonafide written off of stocks and unsaleable stocks which is reflected in financial statements filed along with return of income. Nothing has been brought on record by the Assessing Officer that assessee has reused these items or has not excluded these items from its books. Therefore, in view of the decision of Hon'ble Supreme Court in the case of CIT vs. M/s. Reliance Petroproducts Pvt. Ltd., cited supra, penalty cannot be levied in such cases as assessee has not furnished any inaccurate particulars of income.
5. While pleading on ground nos.4 & 4A and 5, the ld. AR submitted that these were unpaid expenses. The third disallowance on account of unpaid expenses made by Assessing Officer was unascertainable liability. The assessee has not pressed this disallowance before the ITAT. The assessee is following mercantile system of accounting. The assessee has consumed the services but payments have been made at a later date for want of bills. Thus, the claim of the assessee was not incorrect or inaccurate, therefore, no penalty is leviable. Finally, he submitted that the Assessing Officer has not recorded clear satisfaction in the body of the assessment for assuming the jurisdiction of levy of penalty. He further submitted that the reliance of the CIT (A) and Assessing Officer on the case of Dharmendra Textile reported in 306 ITR 277 (SC) is not at all applicable to the assessee's case. This decision has been 14 ITA No.4600/Del./2010 distinguished by the Hon'ble Apex Court in the case of Rajasthan Weaving and Spinning Mill reported in 224 CTR 1 (SC) wherein Hon'ble Supreme Court has held that judgment of Dharmedra Textile, cited supra, is rendered in the context of section 11AC of the Customs Act and if one looks at the provisions of section 11AC, this shows that legislation used "shall" instead of "may" in section 11AC of the Act. In the case of Dharmendra Textile, Hon'ble Apex Court held that once conditions are specified in section 11AC of the Central Excise Act then there is no need to see any mens rea. Ld. AR finally submitted that the decision of Escorts Finance - 188 Taxman 87 is also not applicable as in this case, assessee has made ex-facie bogus claim. Similarly, the facts in the case of Zoom Communication reported in 327 ITR 510 is also not applicable in the assessee's case. He finally submitted that penalty may be deleted.
6. On the other hand, ld. DR relied on the orders of the authorities below and also submitted that the assessee has made a claim of Rs.3,89,78,000/- and failed to establish regarding the benefits derived by this expenditure, therefore, this expenditure was not wholly and exclusively for the purpose of business. This addition has been upheld by the ITAT. Further the disallowance of Rs.8,57,119/- has been made as the assessee has failed to produce excise approval for removal of these goods. Similarly, the disallowance of certain unpaid expenses was not allowable as these were 15 ITA No.4600/Del./2010 unascertainable liabilities. Therefore, the assessee has not disclosed the correct income in the return of income. He pleaded to sustain the orders of the authorities below.
7. We have heard both the sides. The assessee claimed the expenses of Rs.3,89,78,000/- being the amount payable to M/s. APR Limited for the services provided to the assessee. This amount was debited with debit notes received from M/s. APR Limited and the expenditure were pertaining to salary and wages of Rs.1,65,99,000/-, communication & telephone expenses of Rs.38,90,000/-, traveling & conveyance expenses of Rs.75,60,000/- and other expenses of Rs.1,09,29,000/- totaling Rs.3,89,78,000/-. The assessee claimed that M/s. APR Limited has provided services to the assessee and this was a genuine expenditure debited to the books of accounts of the assessee which has been settled by way of issuing the shares and this fact has been accepted by the ITAT in its quantum order which the revenue has not denied. Sharing of administrative expenses with M/s. APR Limited in a pool arrangement was disallowed by the Assessing Officer for the reason that assessee has not got any benefit out of these expenses and assessee failed to establish whether the expenses were wholly and exclusively for the purpose of the business of the assessee. The assessee has failed to advance the argument with regard to the benefit of waiver of loan came due to these expenses. Further, we also agree with the pleadings of the ld. AR that the 16 ITA No.4600/Del./2010 quantum additions in penalty proceedings are two separate and distinct proceedings. Penalty cannot be levied for every disallowance made in the assessment order. The assessee has submitted the agreement, debit note for these expenses, ledger account of M/s. APR Limited to whom the payments were made. Further, the confirmation from M/s. APR Limited was also filed in penalty proceedings. The revenue authorities have not brought anything on record which could prove the non-genuineness of these documents. The facts with regard to these claims were clearly mentioned and disclosed in the return of income. The expenses payable to M/s. APR Limited were shown separately by the assessee in the profit and loss account and the same has been also discussed by the auditor in the audit report which is evident form pages 50 & 51 of the paper book. Thus, we find that assessee has made a claim which was transparent and bona fide. Assessee has not concealed anything in this regard. Therefore, it cannot be a case of concealment of facts. As far as the filing of inaccurate particulars of income is concerned, we hold that assessee was having huge carry forward losses and depreciation and the return was filed at nil income. In our considered view, there cannot be a motive or incentive for the assessee to make any bogus claim in the return of income. These facts show that whatever claim made by the assessee was under good faith and with the advice of the auditors and the employees. The assessee has furnished an explanation which has not been found false. 17 ITA No.4600/Del./2010 Therefore, in our considered view, the assessee's case falls in category of cases which are covered by the decision of Hon'ble Supreme Court in the case of Reliance Petroproducts Pvt. Ltd., cited supra. The relevant portion of the aforesaid judgment of Hon'ble Supreme Court is reproduced as under :-
" A glance at the provisions of section 271 (l)(c) of the Income- tax Act, 1961, suggests that in order to be covered by it, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. The meaning of the word "particulars" used in section 271(l)(c) would embrace the details of the claim made. Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars. In order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee, because that is the only document where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. To attract penalty, the details supplied in the return must not be accurate, not exact or correct, not according to the truth or erroneous.
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."
Further, with regard to the penalty levied on stock written off, we find that assessee has made a genuine claim of write off with regard to the obsolete items. This fact has been disclosed in the return of income. Simply, the assessee has failed to obtain approval from the excise authorities shall not make assessee's claim as bogus. It was a bonafide claim and no penalty u/s 18 ITA No.4600/Del./2010 271(1)(c) can be levied on the bonafide claim made in the return of income. Similarly, with regard to the disallowance of Rs.72,794/- out of the unpaid amount, we hold that this claim was also not false claim. The assessee is following mercantile system of accounting where principle of accrual of expenses is allowable. Simply by stating that liability was unascertained, no penalty can be levied on the assessee on this ground. Considering all the facts, we find that there is no concealment of income or filing of any inaccurate particulars of income which could bring the assessee under the provisions of section 271(1)(c) of the Act. The assessee has huge accumulated losses and depreciation which further strengthen our view that there was no incentive for assessee to make such claims for the benefit of tax. Considering all these facts, we set aside the orders of the authorities below.
8. In the result, the appeal of the assessee stands allowed.
Order pronounced in open court on this 12th day of May, 2014.
Sd/- sd/-
(C.M. GARG) (B.C. MEENA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated the 12th day of May, 2014
TS
Copy forwarded to:
1.Appellant
2.Respondent
3.CIT
4.CIT(A)-XIX, New Delhi.
5.CIT(ITAT), New Delhi.
AR, ITAT
NEW DELHI.