2012 (7) TMI 803

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..... tent of Rs.1,32,88,262/-. This amount was disallowed and the assessee lost its case on merit before the CIT (A) as well as Tribunal. In this backdrop, the Revenue initiated proceedings under Section 271 (1) (c) contending that penalty was justifiably leviable. The CIT (A) allowed the assessee's appeal against the order of AO. The Revenue's appeal was rejected by the impugned order where it was held that: - "The discussions in the impugned order show that the assessee maintained separate books of accounts for different units and, therefore, the claim in respect of deduction u/s 80HHC is allowable, without offsetting the loss from other unit. The CIT (Appeals) while dealing with the quantum addition, as well as the ITAT denied the claim of t .....

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..... careful consideration of the matter, we find that the AO has relied on the judgment of the Jharkhand High Court (supra) and referred the issue of levying penalty to the Additional CIT. He did not examine whether the share application monies can be treated as "loan" or "deposit" within the meaning of Section 269SS. The Additional CIT has merely endorsed the view of the AO in passing the penalty order. The CIT(A) has found as a fact that the shares were subsequently allotted to the applicant companies as shown by the form filed before the Registrar of Companies. Neither the AO nor the Additional CIT has taken the trouble to examine this aspect while imposing the penalty. They have merely relied on the judgment of the Jharkhand High Court (sup .....

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..... In the present case too as noticed by the Tribunal all the foundational facts which ultimately led to the disallowance were revealed by the assessee in the return. Furthermore, interpretation which ultimately prevailed was pronounced upon by the Supreme Court in the decision reported as IPCA Laboratories v. DCIT, 266 ITR 521. Previous to that various Benches of the Tribunal had interpreted the provision in favour of the assessee even though two High Courts i.e. Bombay and Madras High Court took contrary positions. 5. Having regard to these facts, this Court is of the opinion that the decision of the Tribunal impugned in this case does not suffer from any legal infirmity. No question of law is made out. The Appeal is accordingly dismissed.< .....

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