TMI Blog2012 (9) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... ile claiming deduction on similar interest as his income derived from industrial undertaking thereby claiming deduction u/s 80IB in the same manner as was done in the immediately preceding year. In any event, at the time when the assessee returned income and made claim, there were two views possible on the issue under consideration and as such the assessee cannot be said to have made a false or mala-fide claim in the return of income filed by him. Assessee having demonstrated that he made a bona-fide claim. 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 u/s 271(1)(c) - Decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to Rs.6,78,183 on FDRs with the bank and interest from customers as his business income. The assessee claimed deduction under section 80IB of the Act on the income earned from interest. The Assessing Officer, however, held that the assessee s income from interest on FDRs is his income from other sources. He accordingly restricted the deduction under section 80IB of the Act to Rs.9,46,539 by disallowing deduction of Rs.2,03,455 on account of income from interest on FDRS, etc. Penalty proceedings under section 271(1)(c) of the Act were also initiated separately. In response to show cause notice, the assessee furnished explanation on 24.8.2007 and 27.8.2007. In his explanation, the assessee stated that income on account of interest had di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imposed under section 271(1)(c) of the Act. 3. The ld. CIT(A) found no justification in imposition of penalty, as on the given facts of this case two views were possible and there was no intention of the assessee to defraud the Revenue. Placing reliance on the judgment of Hon'ble Apex Court in the case of CIT v. Reliance Petroproducts Pvt. Ltd. [2010] 322 ITR 158(SC), penalty so levied stood cancelled. 4. The ld. D.R. assailing the impugned order contends that this was a case of wrong claim made by the assessee. The judgment by Hon'ble Supreme Court in CIT v. Reliance Petroproducts Pvt. Ltd. (supra) in a case like this was not applicable. Hon'ble Delhi High Court in the case of CIT v. Zoom Communication (P.) Ltd. [2010]327 ITR 510 (Delh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntended that the ld. CIT(A) has erred in cancelling the penalty without any good reason. 5. On the other hand, assessee s counsel placed strong reliance on the order passed by the ld. CIT(A). It was contended that the assessee made a bona-fide claim in the backdrop of the fact that interest income derived from bank and other concerns was his income from business which under the similar circumstances and in scrutiny assessment are accepted by the Revenue itself in assessee s own case for earlier years including for assessment year 2001-02. This has been so shown (supra) his records and copy laid on record as per directions of the Tribunal. Since there were two views possible on the issue under consideration, it cannot be a case of false ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .22,30,180 as his business income, the Assessing Officer himself allowed deduction under section 80IB of the Act on such claim made by him. It is in this backdrop the assessee can be said to have acted bona-fidely while claiming deduction on similar interest as his income derived from industrial undertaking thereby claiming deduction under section 80IB of the Act in the same manner as was done in the immediately preceding year. In any event, at the time when the assessee returned income and made claim, there were two views possible on the issue under consideration and as such the assessee cannot be said to have made a false or mala-fide claim in the return of income filed by him. The assessing authority also has not recorded any finding tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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