Leather Sellers v. ACIT

INCOME TAX ACT, 1961

--Penalty under section 271(1)(c)--Leviability Debatable issue --Held: The issue regarding allowability of deduction under section 80HHC in respect of FDR interest and scrap sales was no doubt a debatable issue and penalty levied under section 271(1)(c) on that count was not justified.

Income Tax Act, 1961, Section 271(1)(c)

Distinguished:CIT v. Zoom Communication P. Ltd. (2010) 327 ITR 510 (Del)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2001-02

INCOME TAX ACT, 1961

--Penalty under section 271(1)(c)--Leviability Bona fide mistake --Held: Admittedly the receipt of interest on income-tax refund was taxable as income from other sources and the same could not be included in business income for the purpose of computing deduction allowable under section 80HHC. However, because of the smallness of the amount, the failure of the assessee in excluding that amount from business profit was a bona fide mistake as submitted by assessee. Therefore, penalty on that count was not justified.

Income Tax Act, 1961, Section 271(1)(c)

Distinguished:Liberty India v. CIT (2009) 317 ITR 217 (SC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2001-02

IN THE ITAT LUCKNOW B BENCH

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