INCOME TAX ACT, 1961,

Sections 271(1)(c), 80-IA & 115JB

Penalty under section 271(1)(c) - Leviability - Addition on basis of disallowance under section 80-IA and 115JB - Debatable issue

AO levied penalty under section 271(1)(c) on disallowance of deduction under section 80-IA on profit from DEPB and computation of book profit under section 115JB. CIT(A) deleted the same on the ground that all the issues of addition/disallowance were made legal and debatable and there was not any wrong filing of particulars and concealment of income. Held: Assessee had disclosed all relevant particulars for computation of its income. All the relevant facts were already before the AO. The issues on which additions were made were debatable and the instant case of the assessee was a case of bona fide difference of opinion on the entitlement of deduction as per provision of the Act. The assessee had also disclosed complete facts of merger and its claim of deduction under section 115JB. The findings of the CIT(A) that the AO had not established that the assessee furnished incorrect facts after placing reliance on decision of CIT v. Reliance Petro Products (P) Ltd. (2010) 322 ITR 158 (SC) : 2010 TaxPub(DT) 1683 (SC) was upheld. Thus, the CIT(A) rightly deleted the penalty.

Relied:CIT v. Reliance Petro Products (P) Ltd. (2010) 322 ITR 158 (SC) : 2010 TaxPub(DT) 1683 (SC)

REFERRED : ACIT v. M/s. Torque Pharmaceuticals (P) Ltd. (CO No. 4/CHD/2014 In ITA No. 1131/CHD/2013, dt. 19-5-2015) : 2015 TaxPub(DT) 3872 (Chd-Trib); and CIT v. India Gelatine & Chemicals Ltd. in (IT Reference No. 167 of 1989, dt. 8-4-2004) : 2005 TaxPub(DT) 212 (Guj-HC)

FAVOUR : In assessee's favour

A.Y. : 2001-02

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