A.F.R. Court No. - 37 Case :- INCOME TAX APPEAL DEFECTIVE No. - 114 of 2012 Appellant :- Commissioner Of Income Tax -Ii Respondent :- M/S Euro Footwear Ltd. Counsel for Appellant :- Shambhu Chopra Counsel for Respondent :- A. Bansal,S.K. Garg and Case :- INCOME TAX APPEAL No. - 799 of 2012 Appellant :- Commissioner Of Income Tax -Ii Respondent :- M/S Euro Footwear Ltd. Counsel for Appellant :- Shambhu Chopra Hon'ble Tarun Agarwala,J. Hon'ble Vinod Kumar Misra,J. Both appeals involve same question of law and are being decided together. For facility, facts in appeal of assessment year 2003-04 is being taken into consideration. For assessment year 2003-04, assessee claimed deduction under Section 80 HHC and 80IB. assessee claimed 30 percent of gross total income under Section 80 IB on income derived from Duty Entitlement Pass Book Scheme (DEPB) as well as on Duty Draw Back Scheme etc. Assessing Officer held that income derived from DEPB and other export incentives are not income derived from industrial undertaking. 2 Assessing Officer allowed deductions under Section 80 IB after deleting duty draw back and export incentives. Assessing Officer was also of opinion that for claiming deductions on duty draw back etc, Assessee had furnished inaccurate particulars and therefore, initiated penalty proceedings under Sections 271 (1) (c) of Act and considered decision of Supreme Court rendered in Liberty India Vs. CIT (2009) 317 ITR 218 and levied penalty under Section 271 (1) (c) amounting to Rs.20,20,000/-. assessee, being aggrieved, filed appeal before CIT Appeals, which was allowed and order of penalty was set aside. department, being aggrieved, filed second appeal, which was rejected. department has now filed present appeal under Section 260 of Tax Act contending that substantial question of law arises and that tribunal committed manifest error in deleting penalty imposed under Section 271 (1) (c) of Act. 3 Having heard Sri Ashok Kumar, learned counsel for appellant and Sri Ashish Bansal, learned counsel for respondents, we find that assessee had disclosed all income and claimed certain deductions, which were disallowed. mere fact that certain deductions were disallowed, does not mean that assessee had furnished inaccurate particulars or had concealed particulars of his income. words "inaccurate particulars" means details supplied in return, which was not accurate or which was not exact or correct or which was not according to truth or which was erroneous. In instant case, there is no finding of Assessing Officer that details supplied by assessee in its return was inaccurate, incorrect, erroneous or false. In absence of any finding of this nature, question of imposing penalty under Section 271 (1) (c) on mere making of claim could not arise nor such imposition of penalty would be sustainable in law. In our opinion, mere making of claim for certain deductions by itself would not amount to 4 furnishing inaccurate particulars regarding income of assessee. In Commissioner of Income Tax Vs. Reliance Petro Products Pvt. Ltd. (2010) 322 ITR 158, Supreme Court held that mere making of claim, which is not sustainable in law, by itself, would not amount to furnishing inaccurate particulars regarding income of assessee. Such claim made by assessee in return, would not amount to inaccurate particulars. Similar view was taken by this Court in Commissioner of Income Tax Vs. M/S Arvidn Footwear Pvt. Ltd. Dated 11.04.2012 in Income Tax Appeal No. 507 of 2012 as well as Income Tax Appeal No. 340 of 2006, Commissioner of Income Tax-II, Kanpur Vs. M/S J.K., Syntehtics Ltd. decided on 04.12.2015. We also find that Supreme Court in Case of Liberty India (supra) has only clarified law, which was subsequent to filing of return of assessee. In light of aforesaid, we are of opinion that order of tribunal does not suffer from 5 any error of law. No substantial question of law arises. Both appeals fail and are hereby dismissed, accordingly. Order Date :- 8.12.2015 YK (Vinod Kumar Misra, J.) (Tarun Agarwala, J.) Commissioner Of Income Tax -II v. M/S Euro Footwear Ltd