TMI Blog2017 (3) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... for deduction under Section 36(1)(viii) of the Act on account of dividend income and interest was allowed as being a part of profits earned in the business of providing long term finance for industrial / agricultural development / infrastructure facility in India. Moreover, the Tribunal also records a finding of fact that the respondent assessee had in its return of income claimed interest and dividend income as being available for deduction under Section 36(1)(viii) of the Act in its Return of Income and mere rejection of a claim for deduction will not amount to filing inaccurate particulars of income. In the above circumstances, the impugned order holds that no penalty is imposable, notwithstanding the fact that in quantum proceedings, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on dividend and interest income earned from debentures, by holding that the issue involved is a debatable one? (ii) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in setting aside the issue of penalty in respect of assets leased to Konkan Railways Corp. Ltd. and Andhra Pradesh Electricity Board, without appreciating the fact that the lease transactions were found to be non genuine and paper transactions only and the underlying assets were held as a security against the finance provided to the lessees ? (iii) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in deleting the penalty levied u/s 271(1)(c) of the I.T. Act with respect to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Thus, the appeal was dismissed by order dated 9th February, 2004 of the CIT(A). (c) The respondent assessee accepted the order of the CIT(A) as it was not challenged before the Tribunal. (d) However, the Assessing Officer while rejecting the assessee's claim for deduction under Section 36(viii) of the Act, by his assessment order dated 10th February, 2000 had initiated penalty proceedings under Section 271(1)(c) of the Act. (e) Thus, on 18th March, 2005, the Assessing Officer passed an order imposing penalty on the above issue under Section 271(1)(c) of the Act. This penalty was on account of filing inaccurate particulars of income in claiming deduction under Section 36(viii) of the Act. (f) Being aggrieved, the responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent assessee had accepted the order of the CIT(A), adverse to it on the above issues. (i) Mr. Kotangle, learned Counsel for the Revenue does not dispute the fact that the decision of Karnataka High Court in Canfin Homes Ltd. (supra) would apply on merits to the present facts making the issue a debatable issue. It is not the case of the Revenue before us that penalty is imposable even in respect of debatable issue. (j) Therefore, the view of the Tribunal that no penalty is imposable on the above count, cannot be found fault with. Accordingly, question (i) as proposed does not give rise to any substantial question of law. Thus, not entertained. 5. Regarding Question no.(ii) : (a) The respondent assessee had in quantum p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fact that in the quantum proceedings by its order dated 22nd May, 2013 it had restored the issue of lease and buy back agreements to the Assessing Officer to reconsider the issue, also restored the penalty proceedings to the Assessing Officer to take a view on penalty imposable after the Assessing Officer decides the matter in quantum proceedings. (f) It is also an undisputed position before us that the appeal filed by the Revenue in quantum proceedings against the order of the Tribunal dated 22nd May, 2013 being Income Tax Appeal No.282 of 2014 was dismissed by order dated 14th September, 2016 of this Court. (g) In the above view, we cannot understand the grievance of the Revenue. In any case, no substantial question of law arises ..... X X X X Extracts X X X X X X X X Extracts X X X X
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