TMI Blog2016 (10) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... enuine claim which was found to be wrong by applying deeming provisions of section 94(8) of the Act and thus the penalty was imposed by the AO and also sustained by the ld. CIT(A). In the case of Zoom Communications P Ltd (2010 (5) TMI 34 - DELHI HIGH COURT), held that where the assessee makes a claim which is not only incorrect in law but also wholly without any basis and explanations furnished by him are not bonafide for making such claim. In that case, the penalty would be levied under section 271(1)(c) of the Act. In our opinion the case of the assessee is squarely covered by the ratio laid down in the case of Reliance Petro Products Ltd (supra). The facts of the case in Zoom Communications P Ltd (supra) are distinguishable from tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo disallowances. One of ₹ 8,83,883/- being dividend on mutual funds which was claimed as exempt u/s 10(35) of the Act by the assessee treating the same as deemed interest under deeming provisions of section 94(7) of the Act and second ₹ 1,78,227/- which relates to cost of acquisition of Birla Sunlife Income Plus. The penalty proceedings under section 271(1)(c) of the Act were initiated and show cause notice dated 12.11.2011 issued. The assessee replied that since the assessee has fully and truly made disclosure of all particulars qua the said items in the return of income and were so treated under the bonafide belief and also that during the course of assessment proceedings on his own offered the same for addition and according ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital loss of ₹ 8,83,883/- from mutual fund in the return of income and thus has not furnished inaccurate particulars qua the said Short term loss. The ld. AR vehemently submitted that the penalty u/s 271(1)9c) of the Act was not imposable in respect of ₹ 8,83,883/- being short term capital loss on mutual funds, the full particulars of which stands disclosed in the return of income filed by the assessee. Ld AR submitted that this has happened due to bonafide and inadvertent mistake committed by the accountant of the appellant. The ld. AR strongly relied on the decision of the co-ordinate bench of the Tribunal in the case of Janus Investment Fund V/s Dy. Director of Income Tax (International Taxation) in ITA No.6975/Mum/2010, Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t bonafide for making such claim. In that case, the penalty would be levied under section 271(1)(c) of the Act. In our opinion the case of the assessee is squarely covered by the ratio laid down in the case of Reliance Petro Products Ltd (supra). The facts of the case in Zoom Communications P Ltd (supra) are distinguishable from that of the assessee s case, as in the case of assessee wrong claim was under bonafide belief of the accountant which was disallowed under the deeming provisions of section 94(8) of the Act and therefore, the ld.CIT(A) has wrongly relied on the decision in order to uphold the order of the AO. In view of the above discussion and legal position, we set aside the order of the ld. CIT(A) and direct the AO to delete the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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