The Commissioner Of Income Tax-Ii v. M/S. Brahma Associates

ASN IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 91 OF 2012 The Commissioner of Income Tax-II. v. M/s. Brahma Associates. ..Appellant. ..Respondent. Mr. Vimal Gupta, Senior Advocate for the Appellant.None for the Respondent. CORAM : J.P. DEVADHAR AND M.S. SANKLECHA, JJ. DATE : 20th March, 2013 PC: Although in this appeal by the revenue for assessment year 2003-04 numerous questions have been raised, the Counsel for the appellant presses only question-1 for our consideration which reads as under: Whether on the facts and in the circumstances of the case and in law the Tribunal did not err in confirming the order of the Commissioner of Income Tax (Appeals) in deleting the penalty of Rs.2,05,05,000/- levied on the assessee under Section 271(1)(c) of the Income Tax Act, 1961 instead of confirming the said penalty? 2) The respondent-assessee carries on business as builders and developers. In the assessment order the following disallowances/additions were made: (a) Disallowance of deduction under Section 80IB(10) of the Income Tax Act, 1961(“the Act”). (b)Addition of gross receipt of interest rather than net as claimed and (c)Addition of undisclosed profit on sale of undisclosed sale of units. In view of the above dis-allowances/additions, the Assessing Officer also levied penalty under Section 271(1)(c) of the Act upon the respondent- assessee on all the three counts. 3) In appeal, CIT(A) deleted the penalty levied on account of dis-allowance of deduction claimed under Section 80IB(10) of the Act and on additions made on account of gross receipt of interest. The penalty was sustained on undisclosed profit on sale of undisclosed flats. 4)On appeal by the revenue, the Tribunal by the impugned order upheld the order of CIT(A) deleting penalty on account of dis-allowance of deduction under Section 80IB(10) of ASN the Act as well as on the addition of gross interest income. So far as claim for deduction under Section 80IB(10) of the Act was concerned, the Tribunal held that all facts necessary for computing the income was disclosed in the balance-sheet and profit and loss account furnished along with the return of income itself. The impugned order records the fact that the Assessing officer come to a conclusion that deduction under Section 80IB(10) is not allowable on the basis of disclosure made in the return. Therefore, it was not a case of rejection of the claim for deduction under Section 80IB(10) of the Act and not any concealment of income or furnishing of inaccurate particulars of income by the respondent assessee. Moreover, the claim for deduction was made on the basis of the CBDT Circular. Thus, the issue was debatable. Therefore, penalty is not leviable. 5)So far as penalty on account of addition of interest as income from other source, the impugned order holds that the the treatment of interest income to be brought to tax on the basis of gross interest or net interest was a debatable issue. Therefore, the penalty on that account is not leviable. In the above view of the matter, the Tribunal upheld the finding of the CIT(A) and held that the levy of penalty on the aforesaid two grounds under ASN Section 271(1)(c) of the Act was not warranted. 6)The impugned order of the Tribunal is based on a finding of fact arrived at by the CIT(A) and the Tribunal. In these circumstances, we see no reason to entertain the proposed question of law. Accordingly, the appeal is dismissed with no order as to costs. (M.S.SANKLECHA, J.) (J.P. DEVADHAR, J.)