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2015 (10) TMI 9 - ITAT MUMBAIPenalty proceedings u/s 271(1)(c) - taxability of interest - "Principle of Mutuality" - CIT(A) deleted the penalty on the ground that, in the earlier years the issue of taxability of interest was decided in the favour of the assessee and it was only after the decision of Bombay High Court which was rendered on 17.06.2010, this issue was decided against the assessee - Held that:- A mere making of a claim which may not be found sustainable in law later on, cannot be held against the assessee, that he is guilty of making a false claim. It is an admitted fact that, at the time of filing of return of income the issue of taxability of interest was in the favour of the assessee by virtue of series of decisions of the Tribunal in the earlier years in assessee's own case. Not only that, there were certain High Courts decisions also which were in the favour of the assessee as pointed out by the learned counsel. Thus the issue whether interest income will fall within the "Principle of Mutuality" or not itself was debatable as there were many conflicting decisions. In this background we hold that at the time of filing return of income the assessee's claim was not only bona fide but had a foundational fact in the form of Tribunal orders. Accordingly, we hold that the Ld.CIT(A) has rightly deleted the penalty as the claim of non taxability of interest income was based on bona fide belief. - Decided in favour of assessee.
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