TMI Blog2010 (4) TMI 1150X X X X Extracts X X X X X X X X Extracts X X X X ..... : These two appeals by the assessee arise out of the orders passed by the learned Commissioner of Income-tax (Appeals) on 13.5.2008 in relation to the assessment years 2001-2002 and 2002-2003 sustaining penalty u/s.271(1)(c) of the Act. Since the issues involved in both the appeals are common and identical grounds have been taken, we are, therefore, proceeding to dispose them off by this con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not allow deduction for expenses and allowance but allowed deduction u/s.24 of the Act. This resulted into enhancement of income on which the Assessing Officer levied penalty u/s.271(1)(c) amounting to ₹ 33,66,864. No relief was allowed in the first appeal. 3. We have heard the rival submissions and perused the relevant material on record. It is noted that the assessee lodged a claim f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO may have been upheld in quantum proceedings. Recently the Hon ble Supreme Court in the case of CIT Vs. Reliance Petro Products Pvt. Ltd. [(2010) 322 ITR 158 (SC)] has held that mere making of a claim which is not sustainable in law by itself will not attract penalty u/s.271(1)(c). The Hon ble Supreme Court further held that when the assessee furnished all the material in return which was not f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucts Pvt. Ltd. (supra) will squarely apply in relation to penalty imposed in respect of rental income as well. Insofar as the disallowance of expenses and depreciation allowance is concerned, the view taken by us in assessment year 2001-2002 (supra) will be operative . We, therefore, order for the deletion of penalty for this year as well. 5. In the result, both the appeals are allowed. Orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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