IN THE HIGH COURT OF DELHI AT NEW DELHI 
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   ITA 162/2012  
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 CIT            ..... Appellant 
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 Through: Mr. Sanjeev Sabharwal, Sr. Standing counsel 
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 versus 
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 DCM SHRIRAM CONSOLIDATED LTD       ..... Respondent 
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 Through: Mr. V P Gupta and Mr. Basant Kumar, Advs. 
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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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      16.03.2012 
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 Revenue by this appeal impugns order dated 14.7.2011 passed by the 
 Tribunal affirming the order of the CIT(Appeals) deleting penalty under 
 Section 271(1)(c) of the Income Tax Act, 1961 (?Act?, for short).  The 
 appeal pertains to assessment year 2006-07. 
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 2. Penalty was imposed to two grounds.  The Assessing Officer had made 
 disallowance under Section 14A of the Act by applying Rule 8D.  On the 
 first aspect it is noticed that this Court has held that Rule 8D is not 
 retrospective and will not apply to assessment year 2006-07.  On the 
 second aspect it is noticed while computing profits under Section 115JB 
 the assessee had not added back provisions made for bad debt.  However, 
 bad and doubtful debts had been added back under the normal provisions. 
 CIT(Appeals) and the tribunal have deleted the said penalty observing 
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 that the position became clear when the retrospective amendment was made w.e.f. 1.4.2001 vide Finance (No.2) Act, 2009.  In the present case, the 
 assessee had filed the return on income on 29.11.2006, which was revised 
 on 31.3.2008.  These are before the retrospective amendment in 2009.  The 
 assessee had relied on CIT v. HCL Comnet System and Services Ltd. (2008) 
 305 ITR 409 (SC) and submitted that no adjustment was required to be made 
 for provision for bad and doubtful debts under clause (c) of the 
 Explanation to Section 115JB.  In these circumstances, we feel the 
 Tribunal was justified in accepting and holding that the case is covered 
 by Explanation 1 Clause (B) to Section 271(1) and had correctly dismissed 
 the appeal of the Revenue deleting the penalty. 
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 No substantial question of law arises.  The appeal is dismissed. 
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 SANJIV KHANNA, J 
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 R.V.EASWAR, J 
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 MARCH 16, 2012 
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 vld 
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 $ 35 
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