TMI Blog2016 (11) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... an imposition of penalty. Bearing in mind that for the earlier assessment years the Respondent Assessee had claimed and been granted refund of taxes deducted at source by the affiliated companies in respect of the payment received by it for Corporate Services and CICT Services would also establish that the claim made by the Respondent Assessee that the income received is not chargeable to tax was a bonafide claim. On facts there is a concurrent finding of there being no concealment of income or furnishing an inaccurate claim of income. - Decided in favour of assessee - INCOME TAX APPEAL NO.432 OF 2014 - - - Dated:- 7-9-2016 - M.S.SANKLECHA, AND S.C. GUPTE, JJ. For The Appellant : Mr. Tejveer Singh P.C: . This appeal under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Netherlands and therefore chargeable to tax in India. Consequently, the Income of ₹ 2.34 crores received from its Indian affiliates on the above two counts was brought to tax by an assessment order dated 31 December 2008 passed under Section 143(3) of the Act. 4. The Assessing Officer, thereafter, served notice upon the Respondent Assessee to show cause why penalty under Section 271(1)(c) of the Act should not be imposed. The Respondent Assessee while responding pointed out that all the relevant facts and details with regard to the nature of receipt on account of CICT Service and Corporate Services along with the basis of its non taxability was mentioned in the notes to its Accounts. The above amount of ₹ 2.34 crores on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eipts. The filing of return in Electronic media did not provide for filing notes to Accounts along with the Return. Thus the non offering of Income to tax was bonafide. This was based upon past practice and grant of refund of the tax deducted by the affiliated companies on the payments made to it. Moreover the entire basis of holding that the amount received from affiliated companies was not chargeable to tax was the interpretation placed upon the DTAA by the Respondent Assessee. On the aforesaid facts, the CIT(A) held that there was no concealing of particulars of income or furnishing inaccurate particulars of Income. Accordingly, the penalty was deleted. 6. Being aggrieved, the Revenue carried the issue in appeal to the Tribunal. The T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imposition of penalty. 7. We find that two authorities have concurrently come to a finding of fact that the conduct of the Respondent Assessee was bonafide and its claim that amount received from its affiliated companies on account of CICT and Corporate Services is not taxable was based on an interpretation of DTAA. It is a settled position of law that where the issue is debatable then mere making of a claim on the basis of a particular interpretation would not lead to an imposition of penalty. Bearing in mind that for the earlier assessment years the Respondent Assessee had claimed and been granted refund of taxes deducted at source by the affiliated companies in respect of the payment received by it for Corporate Services and CICT Serv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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