The Commissioner Of Income Tax Iii, Pune v. M/S.m.r. Gangani & Brothers

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.215 OF 2011 The Commissioner of Income Tax III, Pune..Appellant. Versus M/s.M.R. Gangani & Brothers ..Respondents. Mr.Vimal Gupta, Senior Advocate with Ms.Padma Divakar for the appellant.None for the respondent. P.C. : CORAM : J.P. Devadhar &M.S. Sanklecha, JJ. DATE : 30[th] October 2012 1.Whether the Income Tax Appellate Tribunal was justified in deleting the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961 is the question raised in this appeal. 2.The assessment year involved herein is AY 2001-2002. 3.In the assessment year in question, the valuation of the closing stock was shown by the assessee at Rs.28,09,614/-. During the course of the assessment proceedings, the Assessing Officer computed the value of the closing stock by a different method and valued the closing stock at Rs.45,45,737/- and the same was accepted by the assessee. In view of the enhancement of the valuation of the closing stock, penalty proceedings were initiated and penalty under Section 271(1)(c) of the Income Tax Act, 1961 was imposed upon the assessee. 4.On appeal filed by the assessee, the Commissioner of Income Tax (A) as also the Income Tax Appellate Tribunal have held that estimation of higher rate of valuation of the closing stock could not be treated as furnishing of inaccurate particulars of income and accordingly deleted the penalty imposed upon the assessee. In our opinion, the view taken by the Income Tax Appellate Tribunal is a reasonable and possible view. 5.In this view of the matter, we see no merit to entertain the appeal and the same is hereby dismissed with no order as to costs. (M.S. Sanklecha, J.) (J.P. Devadhar, J.)