ACIT vs. M/s.Beekman Heiix India Consulting P. Ltd.

IN THE INCOME TAX APPELLATE TRIBUNAL 

DELHI BENCH: A: NEW DELHI 

BEFORE SHRI J.S. REDDY, ACCOUNTANT MEMBER 

AND SHRI GEORGE GEORGE K, JUDICIAL MEMBER 

ITA No. 4886/Del/2013 

Assessment Year 2007-08 

ACIT vs. M/s.Beekman Heiix India Consulting P. Ltd. 

Circle 1 (1) 310, A-Block, 3rd Floor, 

Gurgaon Iris Tech Park, Sohna Road, Sector-48 

 Gurgaon 

 (PAN AACCB88655R) 

 (Appellant) (Respondent) 

 Appellant by : Smt. Parvinder Kaur, DR 

 Respondent by : Shri Deepak Malik, Advocate 

 ORDER 

PER GEORGE GEORGE K, JUDICIAL MEMBER 

 This appeal at the instance of the department is directed against CIT(A) 

order dated 21.6.2013. The relevant assessment year is 2007-08. 

2. The solitary issue that arises for our consideration is whether the CIT(A) is 

justified in deleting the penalty imposed u/s 271(1)(c) of the Act amounting to 

Rs. 4,37,711/-. 

 

3. Briefly stated the facts of the case are as follows :-  

 ITA No. 4886/Del/13 

2 

 That assessment u/s 143(3) was completed on 19.11.2009 at total income 

of Rs. 1,65,71,920/- whereby the AO made the following disallowances :- 

 (i) Call option fees of Rs. 53,12,500/- was disallowed in full. 

(ii) Feasibility study charages of Rs. 11,93,827/- was treated as mortizable 

 expenses u/s 35D and 4/5th of these were disallowed. 

 (iii) Disallowance of Rs. 2,13,126/- u/s 14A 

4. The assesee preferred an appeal against the assessment order before the 

Ld. CIT( Appeals)-V, New Delhi who vide order dated 22.02.2011 in appeal No 

78/09- 10 deleted the disallowances mentioned in point no. 1 above and upheld 

the disallowances mentioned in points no. 2 and 3 above. 

5. Subsequently, the Assessing Officer levied penalty u/s 271(1)© amounting 

to Rs. 4,37,711/- on 28.03.2011. Against the penalty order the assessee 

preferred an appeal before the Ld. CIT(A} who vide Its order dated 21.6.2013 

deleted the entire penalty holding that there is no element of concealment in 

cases where the assessee has claimed certain expenses as deductible and those 

expenses have subsequently been disallowed by the A.O. Ld. CIT(A) placed 

reliance on decision in CIT vs Reliance Petro products Ltd. 230 CTR 320. 

6. The revenue being aggrieved is in appeal before us raising the following 

grounds :- 

 i) "Whether on the facts and circumstances of the case, Ld. CIT(A) was right 

in deleting the penalty u/s 271(1)(c) by holding that assessee cannot be  

 ITA No. 4886/Del/13 

3 

said to have concealed its income in cases where disallowance of 

expenses has been made by the AD. Ld. CIT(A)'s view is not conformity 

with the view taken by jurisdiction High Court in the case of CIT vs 

Rubber Udyog Vikas P. Itd. 335 ITR 558." 

 ii) "Whether on the facts and circumstances of the case, Ld. CIT(A) was right 

in ignoring the fact that in the present case, assessee had wrongly 

claimed deduction while being aware of well settled legal position, in 

which case penalty u/s 271(1)(c) is attracted as laid down in CIT vs 

Rubber Udyog Vikas P. Ltd, 335 ITR 558." 

 iii) "The appellant craves for the permission to add, delete or amend the 

grounds of appeal before or at the time of hearing of appeal." 

7. Ld. Authorised Representative reiterated the assesee’s submissions made 

before the Income Tax Authority and supported the findings of the CIT(A). 

8. We have heard rival submissions and perused the material on record. The 

CIT(A) has made threadbare analysis of disallowance of expenditure made in 

the quantum assessment which had resulted in the imposition of penalty u/s 

271(1)(c) of the Act and had come to a correct conclusion that two disallowance 

of expenditure is only an incorrect claim and does not amount to concealment of 

income. The conclusions /findings of the CIT(A) have not been dispelled by the 

revenue. The CIT(A)’s reliance on the various case laws on the subject is apt to 

the facts of this case. The revenue in its grounds of appeal relied on the case of 

CIT vs. Rubber Udyog Vikas (P) Ltd. 335 ITR 558 (2011 (P&H). This decision has 

been taken note of by CIT(A) at para 3.8 of the impugned order. The dictum laid 

down in case of Rubber Udyog Vikas (P) Ltd. is that incorrect claim would not  

 ITA No. 4886/Del/13 

4 

tantamount to furnishing of inaccurate particulars unless it is established that 

assesee has acted with malafide intention. The decision relied on by the revenue 

is in no way helpful to the case of the revenue. On the contrary it help the 

assessee’s case. For the aforesaid reason, we are of the view that CIT(A)’s 

order is correct and in accordance with law and no interference is called for. 

8. In the result appeal filed by the revenue is dismissed. 

 This decision was pronounced in the Open Court on 18th July, 2014. 

 sd/- sd/- 

 (J.S. REDDY) ( GEORGE GEORGE K) 

 ACCOUNTANT MEMBER JUDICIAL MEMBER 

Date 18th July, 2014 

*Veena 

Copy of order forwarded to: 

1. Appellant 

2. Respondent 

3. CIT(A) 

4. CIT 

5. DR 

 By Order 

 Asstt. Registrar, ITAT