- (1.) Both the appeals involve the same question of law and are being decided together. For facility, the facts in the appeal of the assessment year 2003-04 is being taken into consideration.
(2.) For the assessment year 2003-04, the assessee claimed deduction under Section 80 HHC and 80IB. The assessee claimed 30 percent of the gross total income under Section 80 IB on the income derived from Duty Entitlement Pass Book Scheme (DEPB) as well as on Duty Draw Back Scheme etc. The Assessing Officer held that the income derived from DEPB and other export incentives are not the income derived from an industrial undertaking. The Assessing Officer allowed the deductions under Section 80 IB after deleting duty draw back and export incentives. The Assessing Officer was also of the opinion that for claiming deductions on duty draw back etc, the Assessee had furnished inaccurate particulars and therefore, initiated penalty proceedings under Sections 271 (1) (c) of the Act and considered the decision of the 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/-.
(3.) The assessee, being aggrieved, filed an appeal before the CIT Appeals, which was allowed and the order of penalty was set aside. The department, being aggrieved, filed a second appeal, which was rejected.;