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2011 (7) TMI 522 - BOMBAY HIGH COURTPenalty u/s 271(1)(c) - AO taxed the royalty income - CIT(Appeals) deleted the penalty on the ground that the assessment has been made on the basis of the facts disclosed by the assessee - Revenue informs the Court that the Revenue has filed an appeal against the decision of the Tribunal deleting the quantum addition in the present case and the same is pending - Held that:- The fact that the appeal against the deletion of the quantum addition is pending before this Court, cannot be a ground to sustain the penalty imposed under Section 271(1)(c) because the quantum addition itself was made on the basis of the return filed by the assessee which is found to be correct. Merely because the assessee's contention that the royalty income is exempt was not acceptable to the AO cannot be a ground to impose penalty under Section 271(1)(c) - in favour of assessee.
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