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TMI Blog2012 (9) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... in law and on facts is not considering the conclusive evidence brought on record by the A.O. regarding the bogus claim of exemption of interest income on FDRs u/s. 80IB of the I.T. Act by the assessee and on the penalty u/s 271(1)(c) of the Act is is leviable. 3. In doing so, Ld. CIT(A) ignored the ratio laid down in the case of M/s. V.G. Paneer Das Vs. CIT(Madras) 284 ITR 444 wherein it has been held that "there should be some cogent evidence for such bonafied belief regarding the non-taxability of certain income". 4. That the order of Ld. Commissioner of Income tax (Appeals) being erroneous in law and on facts deserves to be vacated and that the order of the Assessing Officer be restored. 2. Briefly the facts are that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be a case of wrong or false claim by the assessee. The penalty in such a case, therefore, is not leviable and reliance has been placed on the judgment by Hon'ble Madras High Court in the case of Commissioner of Income-tax v. Sivananda Steels Ltd. [2002] 256 ITR 683 (Mad.). The Assessing Officer, however, did not accept the contentions raised by the assessee for the reason that Explanation 1 deems such income as concealed income and also that the assessee has failed to substantiate his explanation that he made a bona-fide claim in the return of income. Since the income from interest is not assessee's income derived from industrial undertaking, he took it as a wrong claim of deduction made under section 80IB of the Act by an amount of Rs.2,03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been made to the judgment of Hon'ble Allahabad High Court in the case of Ram Sewak Ram Chandra v. CIT [1998] 98 Taxman 416 (All.). He further contends that where the assessee fails to substantiate its explanation and there being no material to show that explanation was bona-fide and all material facts has been disclosed by the assessee, levy of penalty under section 271(1)(c) of the Act is justified. For this proposition, reliance has been placed on the judgment of Hon'ble Punjab & Haryana High Court in the case of CIT v. Lal Chand Tirath Ram [1997] 92 Taxman 320. Reliance has also been placed on the judgment of Hon'ble Madras High Court in the case of V.G. Pannerdas and Co. P. Ltd. v. CWT [2006] 284 ITR 444 (Mad.) where in the absence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omputing the income of the assessee-company. The claim besides being incorrect in law was mala-fide and as such Explanation 1 to section 271(1)(c) of the Act was applicable whereas such factual position was not prevalent in the judgment before the Apex Court in the case of CIT v. Reliance Petroproducts Pvt. Ltd. (supra). Since the assessee in the case before Hon'ble Delhi High Court could not be taken to have acted bona-fidely, Hon'ble Court answered the question in favour of the Revenue and against the assessee and set aside the order passed by the Tribunal. In the present case in appeal before us, the appellant has demonstrated that interest on FDRs and interest received from customers had nexus with business inasmuch as such a claim made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said that explanation tendered by the assessee is false. Merely because it is held that claim is not sustainable in law that by itself will also not amount to furnishing of inaccurate particulars regarding income of the assessee and as such it would not attract penalty under section 271(1)(c) of the Act. In this view of the matter, the judgment of Hon'ble Delhi High Court in the case of CIT v. Zoom Communication (P.) Ltd. (supra) is found distinguishable on facts and the assessee having discharged the onus and having substantiated the explanation, the ld. CIT(A) is found to have cancelled the penalty for justifiable reasons. We, therefore, find no reason to interfere with the decision taken by him. Accordingly finding no merit in the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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