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Commissioner of Income Tax, Faridabad Versus Olympia Electronics Private Limited

2013 (8) TMI 1040 - PUNJAB AND HARYANA HIGH COURT

ITA No. 695 of 2008 (O&M) - Dated:- 21-8-2013 - Ajay Kumar Mittal And Jaspal Singh, JJ. For the Appellant : Tejinder Joshi, Advocate For the Respondent : None Ajay Kumar Mittal, J. 1. The revenue has preferred this appeal under Section 260A of the Income Tax Act, 1961 (in short, the Act ) against the order dated 30.11.2007, Annexure A.VI passed by the Income Tax Appellate Tribunal, Delhi Bench 'H' New Delhi (in short, the Tribunal ) in ITA No.1748/DEL/2006 for the assessment year 1993- 9 .....

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as 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 fact that the explanation tendered by the respondent-assessee cannot be considered as bonafide in view of the explicit and clear mandate of Section 10B of the Act. 2. A few facts relev .....

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r fresh adjudication. In pursuance of this order, assessment in this case was completed under Section 143(3) of the Act on 31.3.2005 at an Income of ₹ 58,55,570/- treating the interest on FDRs as income from other sources as against business income as claimed by the assessee. Therefore, the assessee had furnished inaccurate particulars of its income. Accordingly, the Assessing Officer imposed a penalty of ₹ 33,66,953/- under Section 271(1)(c) of the Act vide order dated 23.9.2005, An .....

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, 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 appellan .....

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and do not find any merit in the appeal. 5. The Tribunal while cancelling the penalty in para 9 of its order dated 30.11.2007, had recorded as under:- 9. We have considered these rival submissions. At the outset we have to mention that the facts with regard to the interest income have been duly disclosed by the assessee in the notes to the computation of income filed alongwith the return of income. We have already extracted the note in this regard. The assessee has filed the return of income on .....

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n as on the date when the assessee filed its return 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 .....

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not required to make any further inquiries to find out if there was any inaccurate particulars furnished by the assessee. In such circumstances the decision of the Hon'ble Delhi High Court in the case of Nath Brothers (supra) and the Rajasthan State High Court in the case of Harshvardhan Chemicals and Minerals (supra) will squarely apply. In the circumstances the charge of concealment of income levied on the assessee in our view is without any basis. We are also of the view that the burden .....

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cts relevant for computation of total income have been duly disclosed. Therefore the burden that lays on the assessee under explanation 1 is also discharged in the present case. In the facts and circumstances of the case and in view of the judicial pronouncements referred to by the learned counsel 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 .....

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