IN THE HIGH COURT OF DELHI AT NEW DELHI 
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   ITA 147/2012  
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 CIT             ..... Appellant 
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 Through Mr. N P Sahni, sr. standing counsel 
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 versus 
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 HERO HONDA MOTORS LTD       ..... Respondent 
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 Through 
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 CORAM: 
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 HON'BLE MR. JUSTICE SANJIV KHANNA 
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 HON'BLE MR. JUSTICE R.V.EASWAR 
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 O R D E R 
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   12.03.2012 
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 1. Revenue by the present appeal impugns order dated 27th May, 2011 
 passed by the Income Tax Appellate Tribunal (?Tribunal?, for short) in 
 ITA No.2698/Del./2010.  By the impugned order, the Tribunal has allowed 
 the appeal of the respondent-assessee and deleted the penalty imposed 
 under Section 271(1)(c) of the Income Tax Act, 1961 (?Act?, for short) 
 for the assessment year 1998-99 on two grounds : 
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 (1) Wrong claim was made under Section 43B on account of excise duty on 
 which Modvat credit was available. 
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 (2) Wrong claim of Rs.1.80 lacs was made on account of provisions for 
 doubtful debts. 
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 2. The Tribunal, in its impugned order, has noticed that the assessee 
 in the return of income itself had mentioned and given details of the 
 Modvat credit under Section 43B in the form of a note.  The assessee had 
 relied upon an order of the CIT(Appeals) in the case of Maruti Udyog Ltd. 
 in support of the said contention.  The Tribunal, in the impugned order, 
 has noticed that a similar controversy and legal issue had arisen in 
 number of cases and was subject matter of several conflicting decisions 
 of the Tribunal.  The matter was ultimately referred to the larger bench 
 of Tribunal in the case of DCIT v. Glaxo Smithkline Consumers Healthcare 
 Ltd., 107 ITD 343. 
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 3. With regard to the claim of bad debts, the tribunal has held that 
 the return of income was filed on 30th November, 1998 and the 
 disallowance was made on the basis of the Explanation inserted in Section 
 36(1) (vii) of the Act by the Finance Act, 2001 with retrospective effect 
 from 01.04.1989. 
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 4. Considering the aforesaid factual matrix, the Tribunal has 
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 distinguished the decisions relied upon by the Revenue.  It is therefore, clear that the Tribunal has accepted the explanation given by the 
 assessee.  The issues/claim made were debatable and two legal views were 
 possible.  The claims made by the assessee were under bona fide belief 
 that they may be acceptable.  Keeping in view the factual finding 
 recorded by the Tribunal, we are not inclined to issue notice and the 
 appeal is dismissed. 
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 SANJIV KHANNA, J 
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 R.V.EASWAR, J 
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 MARCH 12, 2012 
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 vld 
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 $ 16 
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