IN HIGH COURT OF DELHI AT NEW DELHI Decided on: 11th February, 2015 ITA 80/2015 COMMISSIONER OF INCOME TAX-8 (ERSTWHILE CIT-III) Appellant Through Ms. Suruchi Aggarwal, sr. standing counsel with Ms. Sonia Dhamija and Mr. Aamir Aziz, Advs. versus SUZUKI MOTORCYCLE INDIA LTD Respondent Through None CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE R.K.GAUBA MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT) % 1. revenue is aggrieved by order of Income Tax Appellate Tribunal (hereinafter referred to as ITAT ) in ITA No.6487/Del/2013. It urges that deletion of penalty amounts, as consequence of impugned order, is based upon erroneous reasons. 2. assessee s claim in respect of assessment year (AY) 2006-07 under two heads i.e. re-imbursement of expenses ( 8,68,81 ,641/-) and claim for long term capital loss were rejected. This rejection was upheld by CIT(Appeals) and ITAT. AO however proceeded to initiate penalty proceedings on opinion that material particulars had been ITA No.80/2015 Page 1 concealed and were not disclosed rendering assessee s particulars of income suspect and liable to penal action under Section 271(1)(c). This resulted in penalty of 3,04,62,300/-. By impugned order ITAT accepted assessee s contention and affirmed CIT(Appeals) s findings that assessee s returns did not withhold any relevant particulars and could not be said to have disclosed inaccurate facts. It is contended that ITAT fell into error on both counts. It is firstly submitted that inasmuch as reimbursement of expenses is concerned ITAT in its quantum proceedings upheld revenue s position that such reimbursement ought to have been claimed at relevant time instead of 2007-08 when it was actually done. learned counsel secondly argued that claim for long term capital loss was also suspect in background of circumstances given that previous transaction with Mr. Rana Iqbal Singh Jolly which is alleged to have fallen through, was under suspicious circumstance. [The learned counsel highlighted fact that said purchase amount was suddenly infused with substantial funds which were disbursed but were later reversed in books on ground that transaction was not complete.] learned counsel further highlighted that on this score quantum proceedings resulted in addition and consequently penal action is warranted. 3. This Court has considered submissions. As far as first issue of reimbursement is concerned, ITAT noticed that above was based only on account of letter dated 28.10.2009 addressed to assessee by AO. After noticing materials on record ITAT held that amount had in fact been disclosed in AY 2007-08 and they were directed to be deleted in appellate proceedings. Given these set of facts ITAT felt that at least penal ITA No.80/2015 Page 2 action was not warranted even though in quantum proceedings assessee might have failed. We see no infirmity in findings which are based upon pure appreciation of facts. So far as penalty imposed on account of quantum of capital loss made by assessee goes, this Court noticed that all that assessee did was to say that transaction was reversed inasmuch as amount received from Mr. Rana Iqbal Singh Jolly was returned to him. Whether that transaction was shrouded or suspicious or not, fact remains that capital loss was claimed on account of subsequent sale to M/s Patel Estate (P) Ltd. Having regard to these facts, ITAT noticed -and rightly so that assessee could not be accused of having furnished inaccurate particulars or concealed income or amounts which were liable to be taxed in its return so as to call for penal action under Section 271(1)(c). In given circumstances ITAT s decision based upon binding rules of Supreme Court including CIT V. Reliance Petroproducts Pvt. Ltd. 322 ITR 158 (SC) was justified and warranted. No substantial question of law arises. Appeal is therefore dismissed. S. RAVINDRA BHAT (JUDGE) R.K.GAUBA (JUDGE) FEBRUARY 11, 2015 vld ITA No.80/2015 Page 3 Commissioner of Income-tax-8 (Erstwhile CIT-III) v. Suzuki Motorcycle India Ltd