Itxa/897/2013 Of Commissioner Of Income Tax-1 v. Bennett Coleman And Co. Ltd

sas IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL (LOD) NO.2115 OF 2012 The Commissioner of Income Tax-7, Mumbai ..Appellant. V/s. Bennett Coleman & Co. Ltd. ..Respondent. Mr. Suresh Kumar for the appellant. Mr. Jas Sanghvi i/b. PDS Legal for the respondent. CORAM : J.P. DEVADHAR AND M.S. SANKLECHA, JJ. DATED : 26TH FEBRUARY, 2013 P.C. :- 1.Mr. Jas Sanghavi on behalf of the respondent-assessee undertakes to file Vakalatnama. 2. In this appeal by the revenue for the assessment year 1998-99, following question of law has been raised for our consideration:- “ Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in cancelling the penalty levied of Rs.19,92,493/- u/s. 271(1)(c) in respect of disallowance of claim of loss on sale of machine where the assessee did not disclose the full facts and camouflaged the capital loss as loss on sale of stores in order to reduce taxable income ?” 3.The respondent-assessee has sold the machine in the assessment year under consideration and claimed it as a business loss. However, the assessing officer held it to be a capital loss. In quantum proceedings, the CIT(A) and the Tribunal upheld the view of the assesing officer holding it to be capital loss and not business loss as claimed by the assessee. 4.In view of the above, the Assessing Officer levied penalty under Section 271(1)(c) of the Income Tax Act, 1961 upon the respondent-assessee. The Tribunal by the impugned order held that the loss on sale of machine was disclosed by the respondent-assessee in return of income and claimed as a business loss. The authorities did not accept the claim and held it to be a capital loss. Thus, the penalty has been imposed merely because the claim has been disallowed. The Tribunal relied upon the decision of the Supreme Court in the case of CIT V/s. Reliance Petroproducts Pvt. Ltd. reported in [2010] 322 ITR 158 (SC) to hold disallowance of claim would not ipso facto lead to imposition of penalty. The Tribunal also reached a itxal-2115-12 finding of fact that there was no intention on the part of respondent-assessee to dishonestly avoid paying taxes. It is not the case of the revenue that the aforesaid finding of the Tribunal is perverse. In the above circumstances, as the decision is based on finding of fact we see no reason to entertain the proposed question of law. 5.Accordingly, the appeal is dismissed with no order as to costs. (M.S. SANKLECHA, J.) (J.P. DEVADHAR, J.)