The Director Of Income Tax (It) – 1, Mumbai v. M/S.variable Insurance Products Fund Ii Contrafund Portfolio (Vipcp

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.2540 OF 2011 The Director of Income Tax (IT) – 1, Mumbai..Appellant. Versus M/s.Variable Insurance Products Fund II ContraFund Portfolio (VIPCP)..Respondent. Mr.Tejveer Singh for the appellant.Mr.Prakash Shah with Mr.Jas Sanghavi i/by PDS Legal for the respondent. CORAM : J.P. Devadhar &M.S. Sanklecha, JJ. DATE : 6[th] March 2013 P.C. : 1.In this appeal by the Revenue for assessment year 2006-07, following question of law has been proposed for our consideration. “Whether, on the facts and circumstances of the case and in law, the Tribunal was justified in upholding the decision of the CIT (A) of deleting the penalty levied by the AO under Section 271(1)(c) of the Income Tax Act, 1961 ?” 2.The respondent – assessee had originally filed return of income showing business income as Nil. This was based on the ruling of the Authority for Advance Rulings (AAR) in the case of Fidelity Advisor Series itxa2540-11 VIII reported in (2004) 271 ITR 1. Thereafter, the respondent filed revised return of income voluntarily on 26[th] February 2007 showing income as capital gains of Rs.24.01 lakhs on the basis of a subsequent ruling of the AAR in the case of Fidelity Northstar Fund reported in (2007) 288 ITR 641. 3.The assessment was completed on the basis of revised return disclosing Rs.24.01 lakhs as income from capital gains. However, penalty proceedings were initiated on the ground that there was concealment on the part of the respondent – assessee in not having disclosed the amount of Rs.24.01 lakhs as short-term capital gains in the original return of income as filed. 4.The Tribunal by the impugned order deleted the penalty by holding that the revised return was filed by the respondent – assessee voluntarily on the basis of a ruling of the AAR in Fidelity Northstar Fund (supra). The Tribunal recorded a finding of fact that the revised return was not filed on the basis of any detection by the Revenue and in fact all the details have been furnished by the respondent – assessee in its revised return of income. Further the original return of income filed by the respondent – assessee was also on the basis of a ruling of AAR in the matter of Fidelity Advisor Series VIII (supra). On the aforesaid basis, the Tribunal held that it cannot be said that there is any concealment of income or furnishing inaccurate particulars of income on the part of the respondent – assessee. The claim made was bona fide as it was based on the decisions of AAR. The Tribunal followed the decision of the Apex Court in the matter of Commissioner of Income Tax V/s. Reliance Petroproducts Private Limited reported in (2010) 322 ITR 158 (S.C.), wherein it was observed that mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. 5.Since the decision of the Tribunal is based on finding of fact, 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.)