TMI Blog2011 (7) TMI 1242X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses and loss only after selection of the case of scrutiny on being sure that the claim was bound to be disallowed. 2. Brief facts of the case are that assessee is a company carrying on business of investments. In the profit loss account a sum of ₹ 1,01,644/- was credited on account of interest from bank deposits against which operating expenses amounting to ₹ 36,11,967/- and interest expenditure of ₹ 82,61,642/- were debited. Accordingly, return declaring a loss of ₹ 1,15,64,770/- was filed on 20-11-2006. The case was selected for scrutiny and notice u/s.143[2] was issued by the ITO, Ward 15 (3)(2), Mumbai, on 17-10-2007. Thereafter, a further notice u/s/142 of the Act along with the questionnaire dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, it was not a case of concealment. It was also claimed that return was revised before receiving the notice from the ITO having correct jurisdiction and, therefore, it is wrong to say that assessee revised the return only after being cornered by way of scrutiny of the return. It was claimed that full disclosure had been made in the profit loss account and, therefore, there cannot be any question of concealment. On examination of these contentions, AO was not satisfied and he reiterated that the return was revised only after issue of notice u/s.143[2]. The return was not revised voluntarily and, therefore, it was not a case of bona fide inadvertent mistake. Consequently, he levied penalty u/s.271(1) . 4. Before the ld. CIT(A) th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, in fact, made certain investments in equity shares of subsidiary companies, therefore, it could not be denied that assessee was not in the business of investments and, accordingly, possibly the interest and other expenses could have been even allowable as revenue expenditure. Consequently the issue whether assessee was in business of investment holdings or not was debatable and, therefore, it could be said that it was a case of bona fide claim. In the light of this discussion, the ld. CIT(A) followed the decision of the Hon'ble Supreme Court in the case of CIT vs. Reliance Petro Products Pvt. Ltd. [322 ITR 158] and deleted the penalty. 5. Before us, Ld. DR submitted that original return was filed by the assessee on 21-11-06 declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rry forward of losses was withdrawn. This itself shows that assessee could not have taken benefit of the carry forward of losses. He then carried us through notice dated 24-1-08 along with the questionnaire which is placed at pages 88 to 91 of the paper book and pointed out that no query was raised in the detailed questionnaire regarding claim of loss on account of administrative expenses as well as interest. This clearly shows that return was revised by the assessee without being cornered. Even in the notice which was issued on 7-8-08 [copy of which is placed at pages 111 to 116 of the paper book] no query in this regard was made. These facts clearly show that assessee had basically voluntarily revised the return. 7. He submitted that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings which led to revision of return and ultimately penalty was deleted. The case of the assessee was almost similar with this case and, accordingly, penalty is not justified. 8. We have considered the rival submissions carefully and find force in the submissions of the Ld. Counsel of the assessee. We find that after the return declaring loss was filed a first notice issued u/s.143[2] was dated 17-10-07 and it is a notice simpliciter and no questionnaire bas been attached. Moreover, it seems there was confusion regarding the jurisdiction because this notice had been issued by ITO, Ward 15(3)-2, whereas the jurisdiction lied with ACIT, Circle 10(1) because assessee has filed the return for the first time and the jurisdiction was wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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