TMI Blog2013 (8) TMI 1040X X X X Extracts X X X X X X X X Extracts X X X X ..... in the order dated 24.2.2009, which reads thus: Learned counsel for the appellant vehemently contends that the respondent assessee earned the interest income to the tune of Rs. 58,55,570/- from fixed deposit. He however claimed exemption under Section 10B of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). This stance of the respondent-assessee, according to the learned counsel for the appellant was preposterous, and as such, even though the respondent-assessee had disclosed the aforesaid income, he was liable to be levied penalty under Section 271(1) (c) of the Act, and that, explanation 1 under Section 271(1) of the Act would not be applicable in the facts and circumstances of this case on account of the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kids stuff and service centre was not entitled to the exemption under Section 10B of the Act. Feeling aggrieved, the assessee filed appeal before the Tribunal. Vide order dated 30.11.2007, Annexure A-VI, impugned herein, the Tribunal allowed the appeal and cancelled the penalty levied under Section 271(1) (c) of the Act, holding that the claim of the assessee was bonafide and was in line with the judicial thinking on the issue at the relevant point of time when it filed its return of Income. The assessee had disclosed all facts relating to the interest income. Aggrieved by the order, the revenue is before this court through the instant appeal. 3. Learned counsel for the appellant submitted that the Tribunal had erred in setting aside th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn of income. The legal position however became clear after the pronouncements of the Hon'ble Supreme Court in the case of Pandian Chemicals Limited (supra). This decision of the Hon'ble Supreme Court was rendered in the year 2003. In the circumstances we have to accept the submissions of the learned counsel for the assessee that the question whether interest Income should be considered as business Income or not was a debatable issue as on the date when the assessee filed its return of income. 10. We have already noticed that the assessee has made a true and fair disclosure of all facts regarding its interest income. The mere fact that the Assessing Officer does not accept the claim of the assessee cannot lead to the conclusio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel for the assessee we are of the view that no penalty ought to have been imposed on the assessee. We therefore direct that the penalty imposed be cancelled. The appeal of the assessee is allowed. It was specifically held by the Tribunal that prior to 2003, before the Hon'ble Apex Court in the case of Pandian Chemicals v. CIT , (2003) 262 ITR 278 and CIT v. Sterling Foods, (1999) 237 ITR 579, the issue was a debatable one and the assessee had in its return of Income made a mention by giving a note to the computation of income which was filed alongwith the return of income. It was concluded that in such circumstances, there was no concealment or furnishing of inaccurate particulars. 6. Furthermore, the Hon'ble Apex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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