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2011 (9) TMI 466 - ITAT MUMBAIPenalty u/s 271(1)(c) - period of limitation - held that:- Hon'ble Madras High Court in the case of Rayala Corpn. (P.) Ltd. (2006 -TMI - 13212 - MADRAS High Court) has concluded that, "There is no dispute in this case that the petitioner has filed an appeal before the Tribunal and the same is pending. In such a case, the limitation period for the levy of penalty will be as provided for under Section 275(1)(a), i.e., six months from the end of the month in which the order of the Tribunal is received by the Chief CIT. There cannot be any doubt on this aspect. Accordingly, this Court is of the view that the proviso to Section 275 (1)(a) of the Act, does not nullify the availability to the third respondent of the period of limitation of six months from the end of the month when the order of the Tribunal, Chennai, is received by the third respondent herein" - Decided against the assessee. Penalty for wrong claim of deduction of provision for doubtful debts - held that:- it is clear that the assessee has made a conscious claim under section 36(1)(vii), despite the retrospective amendment by Finance Act, 2001, w.e.f. 1st April 1989, wherein an explanation has been inserted clarifying that a provision for bad and doubtful debts made in the accounts of the assessee shall not be a part of any bad debt or part thereof written-off as irrecoverable in the books of account of the assessee. - Penalty Justified. Provisions for diminution in the value of investments - The undisputed facts are that, the assessee has not sold the shares in question and has claimed a notional loss. The loss was claimed on re-valuation of an asset. By no stretch of imagination, this can be called as a debatable issue. - Penalty justified. Provisions for premium on debenture - When the option to redeem the debenture is not exercised, the question of liability to pay premium does not arise. When an event has not occurred, there is no crystallization of liability and no loss can be allowed under the Act. Penalty justified.
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