These are cross-appeals for asst. yr. 1996-97. assessee is public limited company engaged in publishing and selling city maps for Delhi and surrounding towns and also derives income by way of licence fee, dividend, etc. In return filed for assessment year under appeal, assessee claimed 100 per cent depreciation on structure on ground that it was temporary structure. While completing assessment under s. 143(3) of IT Act, AO noticed that assessee had spent Rs. 17.71 lakhs on boundary wall and Rs. 25,200 as cost of bricks and held that having regard to quantum of expenditure incurred structure cannot be called temporary one and further that at any rate boundary wall cannot be called temporary structure. He accordingly restricted claim of depreciation to 10 per cent as against 100 per cent claimed. disallowance made on this basis was Rs. 16,17,030. While completing assessment, AO also noticed that assessee had claimed deduction under s. 80M at Rs. 1,53,38,560 against dividend income of Rs. 158.83 lakhs. AO referred to assessments of preceding years wherein it was held that major part of expenses, including interest paid, debited to P&L a/c related to investment made by assessee in shares and dividend earned therefrom. He also referred to asst. yr. 1995-96 in which it was held that expenses incurred by assessee were more than dividend income, leaving no scope for deduction under s. 80M. On ground that facts for instant year are same, AO held that assessee was not eligible for deduction. assessment was thus completed by disallowing part of depreciation and by denying deduction under s. 80M. At end of assessment order, AO observed that penalty proceedings under s. 271(1)(c) are separately initiated. There was appeal against assessment to CIT(A) who by order dt. 15th Dec., 1999 confirmed disallowance of depreciation and set aside issue relating to s. 80M to AO for fresh adjudication. AO passed order on 11th Aug., 2003 to give effect to order of CIT(A) and in another order passed under s. 154 on 29th Sept., 2003, he allowed deduction at Rs. 71,83,000 under s. 80M. It appears that no appeal was taken to Tribunal by assessee against order passed by CIT(A). However, Revenue had filed appeal to Tribunal against relief granted by CIT(A) and Tribunal disposed of appeal by order dt. 13th Jan., 2003. AO thereafter issued penalty notice on ground that assessee concealed its income or furnished inaccurate particulars thereof. In response thereto, assessee first contended that proceedings are barred by limitation as CIT(A) passed order on 15th Dec., 1999 and penalty ought to have been imposed within six months from date of service of order on CIT/Chief CIT as provided in s. 275(1)(a). On merits, it was pointed out that assessee did not incur any expenditure for earning dividend income and, therefore, deduction under s. 80M had been claimed to extent of dividends distributed and there was no furnishing of inaccurate particulars of income. It was also argued that investment in shares of Eicher Ltd. was made entirely out of internal accruals or surplus funds and not out of borrowed funds. It was further submitted that assessee purchased shares of Eicher Ltd. essentially to safeguard its source of income consisting of licence fee and service charges for providing corporate services and thus any returns on investment must be treated as business income notwithstanding that dividend is assessable under head "Income from other sources" by reason of specific provisions of Act. assessee also contended that claim for deduction was made bona fide. AO rejected assessee s contention. So far as limitation aspect is concerned, he observed that Department had filed appeal before Tribunal against order of CIT(A) which was decided by Tribunal in ITA No. 1209/Del/2000 by order dt. 13th Jan., 2003 received by AO in March, 2004 and penalty order having been passed within 6 months from end of month in which order of Tribunal was thus received, penalty proceedings were not barred by time. On merits, it was argued by AO that in appeal before CIT(A) filed against consequential order passed by AO on 11th Aug., 2003, part disallowance of claim under s. 80M was not pressed. He also observed that assessee did not maintain s. 80M was not pressed. He also observed that assessee did not maintain separate record for expenses incurred against dividend income and, therefore, estimated allowance have to be made by AO. As regards purpose of investment in shares of Eicher Ltd., AO stated that he has allocated business expenses to dividend income proportionately by treating same at par with business income. He also observed that assessee s claim was not bona fide since in asst. yrs. 1993-94 to 1995-96, claim for deduction under s. 80M was subject of litigation. For these reasons, AO held that assessee furnished inaccurate particulars of its income and accordingly levied penalty of Rs. 45,41,242. On appeal, CIT(A) held that in earlier years, Tribunal has referred question of law to Hon ble Delhi High Court on issue whether deduction under s. 80M is to be allowed on gross or net dividend, whether shares of Eicher Ltd. were held by assessee as stock-in-trade or investment and whether expenditure is to be allowed under s. 36(1)(iii) and accordingly held that issue is debatable and, therefore, it cannot be said that assessee by claiming deduction furnished inaccurate particulars of income, nor can it be said that claim was false. In this view of matter, he cancelled penalty relating to deduction claimed under s. 80M. However, as regards claim for depreciation, CIT(A) held that assessee s claim was incorrect since only 10 per cent depreciation was allowable on structure and no reasons were given as to why depreciation was claimed at 100 per cent. He further found that assessee s claim was not supported by judicial precedents. According to CIT(A), in view of Expln. 1 below s. 271(1)(c), there was no more any need to prove conscious concealment or mala fide for levy of penalty. Accordingly, penalty with reference to depreciation claimed was affirmed. With regard to question of limitation, CIT(A) agreed with AO that proceedings were not barred by limitation. Before CIT(A), assessee had also taken up point that AO had not recorded his satisfaction in assessment order to effect that assessee concealed its income or furnished inaccurate particulars thereof. CIT(A), however, relying on observations of Supreme Court in CIT vs. S.V. Angidi Chettiar (1962) 44 ITR 739 (SC) to effect that endorsement at foot of assessment order that action is taken by issue of notice for concealment of income amounts to recording of satisfaction, rejected assessee s contention. He noted that in present case also, AO has recorded similar footnote in assessment order. Both assessee as well as Revenue are aggrieved by order of t h e CIT(A) and have filed present appeals. Whereas appeal of assessee is against confirmation of penalty in respect of disallowance o f depreciation, appeal of Revenue is against cancellation of penalty in respect of claim for deduction under s. 80M. We have heard rival contentions. assessee filed additional ground of appeal before Tribunal by application dt. 3rd Aug., 2005. following grounds have been taken therein: "1. That on facts and circumstances of case and in law order dt. 20th Sept., 2004 passed by AO levying penalty under s. 271(1)(c) of IT Act, 1961 ( Act ), is without jurisdiction, illegal, bad in law and void ab initio. That on facts and circumstances of case and in law impugned penalty order is without jurisdiction, illegal, bad in law and void ab initio since same has been passed without there being satisfaction in assessment order that appellant had furnished inaccurate particulars of income/loss, which is sine qua non for assumption of valid jurisdiction." It is submitted that additional ground raises purely legal issue in respect of which facts are already on record and no fresh investigation is required. It is also submitted that additional ground is taken since assessee was recently informed of correct position of law and that omission to raise same in memorandum of appeal was neither wilful nor unreasonable. Reliance is placed on judgments of Supreme Court in Jute Corporation of India vs. CIT (1990) 88 CTR (SC) 66: (1991) 187 ITR 688 (SC) and National Thermal Corporation Ltd. vs. CIT (1999) 157 CTR (SC) 249: (1998) 229 ITR 383 (SC). On behalf of Department, admission of additional ground was vehemently opposed. On careful consideration of matter, we are of view that additional ground requires to be admitted. It raises pure question of law and requires no investigation into facts which are already on record. Further, in view of recent judgments of Hon ble Delhi High Court on question of satisfaction, which we shall presently note, omission to take ground in memorandum of appeal cannot be said to be wilful or unreasonable. Respectfully following judgments of Supreme Court cited above, we admit additional ground for adjudication. As regards merits of additional ground, we have heard rival submissions. We are of view that additional ground has to be decided in favour of assessee. We have carefully perused assessment order. At end of same, AO has noted that "penalty proceedings under s. 271(1)(c) are separately initiated". It has been held by Hon ble Delhi High Court in CIT vs. Ram Commercial Enterprises Ltd. (2001) 167 CTR (Del) 321: (2000) 246 ITR 568 (Del), after noticing judgment of Supreme Court in case of Angidi Chettiar (supra) that merely because there is note in assessment order that penalty proceedings have been initiated it cannot be assumed that satisfaction was arrived at, in absence of same being spelt out by order of assessing authority. In case of Diwan Enterprises vs. CIT (2001) 167 CTR (Del) 324: (2000) 246 ITR 571 (Del), Hon ble Delhi High Court after referring to its judgment in Ram Commercial Enterprises Ltd. (supra) held that non-recording of satisfaction in assessment order before issue of notice or initiation of any step for imposing penalty is jurisdictional defect which cannot be cured. In CIT vs. B.R. Sharma (2005) 196 CTR (Del) 454: (2005) 275 ITR 303 (Del), it was held by Hon ble Delhi High Court that assessment order should apparently show that there is application of mind and this can only be gathered by reasons stated in order and reference to other records may not be very relevant. It was pointed out that s. 271(1)(c) being penal provision, should be construed strictly and satisfaction, though subjective, must be arrived at objectively. In CIT vs. Vikas Promoters (P) Ltd. (2005) 194 CTR (Del) 384: (2005) 277 ITR 337 (Del), Hon ble Delhi High Court observed that in case of Angidi Chettiar (supra), Supreme Court have repeatedly that in case of Angidi Chettiar (supra), Supreme Court have repeatedly emphasized word "satisfaction" and satisfaction is not to be merely in mind of AO but must be reflected from record. It was further held that element of satisfaction should be apparent from order itself and it is not for Courts to go into minds of authorities or trace reasons from files of such authorities. If we peruse assessment order in light of above binding authorities, we are unable to find any satisfaction being recorded therein to effect that assessee concealed its income or furnished inaccurate particulars thereof. It may be clarified that penalty has been levied not for concealment of income but for furnishing inaccurate particulars of income as can be seen from closing paras of penalty order. Therefore, satisfaction of AO must be that assessee furnished inaccurate particulars of income. disallowance of depreciation and deduction under s. 80M are discussed in paras 6 and 7 respectively of assessment order. So far as depreciation is concerned, AO has merely stated that structure built by assessee, on which depreciation has been claimed, cannot be termed as temporary structure. He has, therefore, restricted claim of depreciation to 10 per cent as against 100 per cent claim. Nowhere in this para has AO stated that particulars furnished by assessee in support of claim were wrong o r false, nor has he unearthed any material fact or particulars which assessee did not disclose. position with regard to claim under s. 80M is even worse. In para 7 of assessment order, AO has merely referred to t h e assessments of earlier years and has stated that in line with those assessments, assessee s claim for year under appeal cannot be allowed. In course of arguments before us, learned counsel for assessee had drawn our attention to order of Tribunal for asst. yrs. 1993-94 to 1995-96, dt. 27th Oct., 1999, copy of which has been placed at pp. 74 to 96 of paper book. In those years, claim had reached Tribunal and argument of assessee (before Tribunal) was that it was in its own business interest to hold shares of subsidiary company (Eicher Ltd.) and, therefore, acquisition of shares was motivated by considerations such as holding control over company in interests of its business. This argument was not accepted by Tribunal as can be seen from para 23 of order. Tribunal found it inconsistent to compute expenditure under head business while computing dividend income under head "Income from other sources". claim of assessee was sought to be supported by judgment of Gujarat High Court in Addl. CIT vs. Laxmi Agents (P) Ltd. (1980) 125 ITR 227 (Guj) and that of Calcutta High Court in CIT vs. National & Grindlays Bank Ltd. (1993) 109 CTR (Cal) 264: (1993) 202 ITR 559 (Cal) before Tribunal. All that Tribunal has stated is that assessee s claim is not consistent with scheme of IT Act or with logic and that it was implausible stand. AO has not referred to order of Tribunal in assessment order presumably because it was passed after assessment order. Be that as it may, we have referred to Tribunal s order only for purpose of showing that if at all, assessee s claim can only be stated to be debatable or contentious and in all fairness to assessee it must also be said to be supported by High Court judgments. Even before us, learned counsel for assessee cited several other judgments in support of its claim that despite dividend income being assessed as income from other sources, expenditure could be computed under head business. In light of authorities which prima facie support assessee, it is difficult to hold that AO could have been satisfied that assessee furnished inaccurate particulars of its income with regard to s. 80M. This is quite apart from fact that there is no satisfaction recorded in para 7 of assessment order. We accordingly accept additional ground and cancel penalty sustained by CIT(A). In appeal filed by Department also, assessee is entitled to succeed on ground of non-recording of satisfaction as pointed out in earlier paras. assessee is entitled under r. 27 of ITAT Rules, 1963 to support decision of CIT(A), which is appealed against by Department, on ground of non-recording of satisfaction, which ground has been dismissed by CIT(A). We have already noted that so far as claim under s. 80M is concerned, there is no recording of satisfaction in assessment order to effect that assessee furnished inaccurate particulars thereof. Though CIT(A) has rejected assessee s plea based on non-recording of satisfaction and has cancelled penalty levied with reference to deduction under s. 80M on other grounds on ground that assessee has not furnished inaccurate particulars of income we accept assessee s plea regarding non- recording of satisfaction in view of r. 27 and uphold ultimate decision of CIT(A) to cancel penalty. above discussion would suffice to dispose of both appeals, but in deference to arguments advanced before us by both sides, we wish to advert to them and render our decision. So far as question whether assessee is guilty of furnishing of inaccurate particulars concerned, we are unable to say that assessee furnished inaccurate particulars of income either with regard to claim for depreciation or with regard to claim for deduction under s. 80M. With respect to claim for depreciation, we have already noted that AO has not found fault with particulars furnished by assessee nor has he shown them to be false. He has not also unearthed any material fact or particulars which assessee did not disclose. All that AO stated was that on existing facts furnished by assessee, structure cannot be said to be temporary structure. CIT(A) has referred to Expln. 1 to s. 271(1)(c) to hold that assessee s claim is not supported by judicial precedents and, therefore, is not bona fide. We fail to see how it can be said so. Hon ble Delhi High Court in Addl. CIT vs. Delhi Cloth & General Mills Company Ltd. (1984) 42 CTR (Del) 188: (1986) 157 ITR 822 (Del) has held as under: " .The observation of Tribunal comes to nothing but this, that assessee s plea that expenditure in question was of revenue nature did not have any force and expenditure had to be treated as capital expenditure and, therefore, assessee was bound to add same back to its total income, and fact that assessee did not so add back that expenditure amounted to furnishing of inaccurate particulars of income by assessee. It is obvious that fact that expenditure in question was capital expenditure in nature and was, therefore, liable to be added back to income of assessee is quite different from fact as to whether, on facts and in circumstances of case, assessee could be under bona fide belief that expenditure in question was revenue expenditure and for that reason same was not added back to its total income with result that no penalty was exigible on that account, are two quite different facts. aforesaid plea of assessee regarding its bona fide belief about nature of expenditure was not duly regarding its bona fide belief about nature of expenditure was not duly considered by Tribunal. mere fact that plea of assessee that expenditure in question was of revenue nature was not accepted upto Tribunal, by itself did not mean that assessee had furnished inaccurate particulars of its income by not adding that back to its total income Before we comment on merits of plea of assessee, it may be stated here that it is settled law that mere fact that claim of expenditure stands disallowed, does not by itself lead to inference that assessee had furnished inaccurate particulars in regard to that item. Penalty on account of concealment can be imposed only if there is conscious and deliberate concealment on part of assessee." aforesaid observations are complete answer to view taken by CIT(A) that Expln. 1 to s. 271(1)(c) applies to case. Further, AO has merely taken view different from that of assessee on very same facts and this cannot be brought within meaning of phrase "furnishing inaccurate particulars of income". following authorities support this proposition: (i) Cement Marketing Co. of India Ltd. vs. Asstt. CST (1980) 124 ITR 15 (SC) (ii) Burma Shell Oil Storage & Distributing Company of India Ltd. vs. ITO (1987) 163 ITR 496 (Cal) (iii) CIT vs. Late G.D. Naidu By LRs (1986) 51 CTR (Mad) 256: (1987) 165 ITR 63 (Mad). So far as claim under s. 80M is concerned, CIT(A) has noticed that for asst. yrs. 1998-99 and 1999-2000, Hon ble Delhi High Court by order dt. 20th Aug., 2001 has admitted appeal of assessee on following substantial questions of law: "(a) Whether Tribunal was justified in law in holding that assessee- appellant was entitled to deduction under s. 80M of IT Act, 1961 in respect of net dividend and not gross dividend? (b) Whether Tribunal was correct in holding that assessee s shares were stock-in-trade and/or investment in shares? (c) Whether Tribunal was correct in holding that expenditure under s. 36(1)(iii) of Act was not linked to earning of dividend income? Taking into consideration above development, CIT(A) has rightly held that assessee cannot be said to have furnished inaccurate particulars relating to claim. We have already noticed that assessee s claim has prima facie support of judgments of Gujarat and Calcutta High Courts (cited supra), and Bombay High Court in CIT vs. Amritaben R. Shah (2000) 158 CTR (Bom) 195: (1999) 238 ITR 777 (Bom) has also taken same view. When assessee s claim is supported by judgments of High Courts, AO cannot possibly say, without bringing out any material difference between cases before High Courts and case of assessee, that assessee is guilty of furnishing inaccurate particulars of income. Further, issue has been recurring from earlier years and disallowance has been made based on earlier assessments without bringing out any material inaccuracy or falsity in facts placed by assessee. issue is at best debatable or contentious issue. In our view, CIT(A) was, therefore, right in saying that assessee did not furnish inaccurate particulars in relation to claim for deduction under s. 80M. For above reasons, we hold that assessee did not furnish inaccurate particulars of income either with regard to claim for depreciation or with regard to deduction under s. 80M. In course of arguments in assessee s appeal, learned counsel for assessee raised contention that penalty order is barred by limitation under s. 275(1)(a) of Act. We are unable to agree with contention. order of Tribunal in appeal filed by Department in ITA No. 1209/Del/2000, dt. 13th Jan., 2003 is stated to have been received in office of CIT-IV, Delhi, in month of March, 2004. Even assuming that it was received on 31st March, 2004, AO has six months time from that date to pass penalty order. penalty order was passed on 20th Sept., 2004, which is within time. We, therefore, do not agree with learned counsel for assessee that penalty order is barred by time. learned counsel for assessee, however, submitted that so far as penalty with regard to disallowance of depreciation is concerned, penalty order is barred by time under s. 275(1)(a) of Act. He pointed out that disallowance of depreciation was confirmed by CIT(A) by order dt. 15th Dec., 1999 against which there is no appeal to Tribunal either by assessee or by Department and, therefore, penalty with regard to depreciation should have been imposed within six months from end of month in which order of CIT(A) was received by Chief CIT or CIT. He submitted that it is not conceivable that order passed on 15th Dec., 1999 would not have been received by Chief CIT or CIT for such long time and, therefore, submitted that penalty order passed on 20th Sept., 2004 must be certainly time-barred. We are unable to accept this submission also since once "order" of CIT(A) is subjected to appeal then extended period of limitation is available to AO for passing penalty order. In present case, order of CIT(A) dt. 15th Dec., 1999 was appealed against by Department and, therefore, AO is entitled to pass penalty order within six months from end of month in which order of Tribunal is received by CIT or Chief CIT. learned senior Departmental Representative has filed letter dt. 21st Nov., 2006 written by AO to him saying that order of Tribunal was received in office of CIT in March, 2004. This was not disputed on behalf of assessee. penalty order having been passed on 20th Sept., 2004 is, therefore, within period of limitation. argument of learned counsel for assessee to contrary is not accepted. In result, appeal filed by assessee is allowed and penalty relating to claim of depreciation is cancelled and appeal filed by Department against cancellation of penalty levied with reference to claim for deduction under s. 80M is dismissed. No costs. *** EICHER GOODEARTH LTD. v. DEPUTY COMMISSIONER OF INCOME TAX