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2017 (3) TMI 40 - HC - Income TaxPenalty u/s 271(1)(c) - claim of deduction on account of special Reserve under Section 36(1) (viii) of the Act including in its profits, dividend and interest income for providing long term finance for industrial / agricultural development / infrastructure facility in India - Held that:- The issue of dividend and interest income forming part of profits of business of long term finance is a debatable issue. For the aforesaid conclusion, the impugned order relied upon the decision of the Karnataka High Court in Commissioner of Income Tax Vs. Canfin Homes Ltd. [2011 (8) TMI 178 - KARNATAKA HIGH COURT] wherein on merits, the assessee's claim therein for deduction under Section 36(1)(viii) of the Act on account of dividend income and interest was allowed as being a part of profits earned in the business of providing long term finance for industrial / agricultural development / infrastructure facility in India. Moreover, the Tribunal also records a finding of fact that the respondent assessee had in its return of income claimed interest and dividend income as being available for deduction under Section 36(1)(viii) of the Act in its Return of Income and mere rejection of a claim for deduction will not amount to filing inaccurate particulars of income. In the above circumstances, the impugned order holds that no penalty is imposable, notwithstanding the fact that in quantum proceedings, the respondent assessee had accepted the order of the CIT(A), adverse to it on the above issues. - Decided in favour of assessee Penalty u/s 271(1)(c) - depreciation claim of sale and lease back transactions - Held that:- No substantial question of law arises at this stage as the entire issue is restored to the Assessing Officer for fresh consideration on the issue of penalty.
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