Jyoti v. Jani

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 985 of 2018 ==========================================================PRINCIPAL COMMISSIONER OF INCOME TAX-2VersusGUJARAT LEASE FINANCING LTD. ========================================================== Appearance:MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1 for the RESPONDENT(s) No. 1 ========================================================== CORAM: HONOURABLE MR.JUSTICE AKIL KURESHIandHONOURABLE MR.JUSTICE B.N. KARIA Date : 14/08/2018 ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Revenue is in appeal against judgement o the Income Tax Appellate Tribunal dated 12.02.2018 raising following question for our consideration:Appellate Tribunal dated 12.02.2018 raising following question for our consideration: “Whether the Appellate Tribunal has erred in law and on facts in deleting the penalty u/s. 271(1)(c) of the Act?” 2. The question relates to penalty imposed by the Assessing Officer under section 271(1)(c) of the Income Tax Act, 1961 which was deleted by the CIT(A) and confirmed by the Tribunal. We notice that the Assessing Officer had imposed penalty in connection with following four additions:Officer under section 271(1)(c) of the Income Tax Act, 1961 which was deleted by the CIT(A) and confirmed by the Tribunal. We notice that the Assessing Officer had imposed penalty in connection with following four additions: “(i)Interest on Income Tax refund (ii)Addition on account of wrong claim of depreciation (iii)Claim of bad debts (iv)On account of genuineness of the creclitors” 3. We are informed that the quantum additions in relation to items No.(ii) and (iii) have been stipulated by the Tribunal and the High Court has also dismissed Revenue's Tax Appeal No. 1030 of 2018. Regarding ground No. (iv), the Revenue has not carried the matter before the Tribunal. The sole surviving question therefore relates to penalty relatable to interest on income tax refund. The Tribunal relied on the judgement of Kolkata High Court in case of Pilani Investment and Industries Corporation Ltd reported in 383 ITR 635 to come to a conclusion that mere non-disclosure of interest earned on income tax refund is not a case of concealment. However, the CIT(A) noted as a matter of fact that proper disclosure was also made by the assessee. The amount of interest was reflected on the notes on account and therefore no concealment.items No.(ii) and (iii) have been stipulated by the Tribunal and the High Court has also dismissed Revenue's Tax Appeal No. 1030 of 2018. Regarding ground No. (iv), the Revenue has not carried the matter before the Tribunal. The sole surviving question therefore relates to penalty relatable to interest on income tax refund. The Tribunal relied on the judgement of Kolkata High Court in case of Pilani Investment and Industries Corporation Ltd reported in 383 ITR 635 to come to a conclusion that mere non-disclosure of interest earned on income tax refund is not a case of concealment. However, the CIT(A) noted as a matter of fact that proper disclosure was also made by the assessee. The amount of interest was reflected on the notes on account and therefore no concealment. 4. In the result, Tax Appeal is dismissed. (AKIL KURESHI, J) JYOTI V. JANI (B.N. KARIA, J)