TaxTMI 
TaxTMI 
2010 (2) TMI 951
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....rder levying penalty under section 271(1)(c) of the Income-tax Act, 1961 (the Act). 2. The Revenue challenges cancellation of penalty levied. In the cross objection the assessee supports the order of the learned Commissioner of Income-tax (Appeals). 3. The assessee-company is engaged in the business of trading and investment. The assessee filed return of income declaring total income of Rs. 49,13,263. The case was selected for scrutiny. The assessee, inter alia, claimed deduction in respect of provision made for non-performing asset (NPA) amounting to Rs. 27,04,048 on the basis of RBI guidelines as applicable to the assessee. During the course of assessment proceedings on 12-11-2001 certain queries were raised, inter alia, regarding p....
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.... (iii) CIT v. Bharat Hotels Ltd. [2009] 309 ITR 134 (Delhi); (iv) T. Ashok Pai v. CIT [2007] 292 ITR 11 (SC); (v) Dilip N. Shroff v. Joint CIT [2007] 291 ITR 519 (SC); and (vi) CIT v. Ram Commercial Enterprises Ltd. [2000] 246 ITR 568 (Delhi). 5. The learned Commissioner of Income-tax (Appeals) found that from the facts of the case and ratio of the judgments cited, penalty is not leviable. The Revenue is in further appeal before us. 6. The learned Departmental representative Shri Kishore B. submitted that the order by the learned Commissioner of Income-tax (Appeals) is a non-speaking order in the sense that neither the ratio of the decisions cited has been brought out nor is it demonstrated as to how the claim was bona fide.....
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....ential norms of RBI has to be allowed for deduction in computing the income. Similar views were also held by the Income-tax Appellate Tribunal, Delhi, in the cases of Hindustan Commercial Investment Trust Ltd. v. Dy. CIT [IT Appeal No. 1912 (Delhi) of 2002 and Tedco Investment & Financial Services (P.) Ltd. v. Dy. CIT [2003] 87 ITD 298 (Delhi). Therefore, it cannot be said that in all the cases the provision for NPA is not allowable at all. Since the return was filed on the basis of the then prevailing view as approved by the Tribunal, it can be considered to be a bona fide view. Therefore, since on later date when the assessee was advised to withdraw the claim and the claim was accordingly withdrawn, it does not amount to furnishing inaccu....
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....same was a bogus claim. We, therefore, held that the claim was a bona fide claim and even the withdrawal of such claim was also based on sound legal opinion. This action can also be considered to be a bona fide action so as to exonerate the assessee from the clutches of penalty under section 271(1)(c) of the Act. The penalty is levied for furnishing inaccurate particulars of income. However, the particulars were correctly filed. It was only a difference of opinion between the assessee and the Assessing Officer that the claim is not allowable. However the claim is not prima facie inadmissible. Therefore, when the claim was made in the return of income filed originally, the same being bona fide does not amount to furnishing inaccurate particu....
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....6(1)(vii) the assessee reversed its claim of provision for doubtful debts. This also was a suo motu action. The allowability or otherwise of a provision for non performing assets debited to the profit and loss account were the subject matter of debate and the Special Bench in the case of New India Industries Ltd. v. Asst. CIT [2007] 112 TTJ (Delhi) 917 and in view of the retrospective amendment it was held that the claim cannot be allowed. This very reference to the Delhi Special Bench decision abundantly proves that the issues under consideration were highly debatable ones. The explanation offered by the assessee was a bona fide explanation. In this back drop we find the decision of the first appellate authority is in conformity with the f....