2014 (1) TMI 173

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....ts etc. The assessment was completed after making inter alia the following additions for the AY 2005-06.    (a) Disallowance of depreciation    (b) Computation of deduction u/s 80 HHC for the purpose of arriving at book profits u/s 115 JB of the Act. Penalty was levied on both these issues. 3. On appeal the First Appellate Authority deleted the same for the AY 2005-06 and 2006-07, for various reasons given in his order 4. Aggrieved the Revenue is in appeal before us on the following grounds. For AY 2005-06:    1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the penalty of Rs.2,94,80,023/- imposed by the Assessing Officer u/s. 271(1)(c) of the IT Act, 1961 in resp....

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....he common issue i.e. computation of book profit u/s 115 JB. The issue is whether the assessee while computing book profits u/s 115 JB of the Act, has to reduce book profits in terms of Clause (iv) of Explanation I to S.115 JB, deduction u/s 80 HHC of the Act which is computed on profits arrived at, in accordance with provisions of Part I and Part III of Schedule VI of the Companies Act, 1956 or whether quantum of deduction u/s 80 HHC has to be computed with reference to the profits computed under the provisions of the Income Tax Act. The assessee chose to compute the deduction u/s 80 HHC, for the limited purpose of computing book profits u/s 115 JB, by adeopting the profits computed in accordance with the provisions of Part I and Part III o....

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....neither furnishing of inaccurate particulars of income nor concealment of income. The assessee has made an honest claim and all the facts relating to the claim were on record. The issue in question was a debatable issue. The First Appellate Authority has rightly applied the judgment of the Hon'ble Supreme Court in the case of CIT vs. Reliance Petro Products Pvt. Ltd. (2010) reported in 322 ITR 158 (SC) and allowed the claim of the assessee. In the result this ground of the revenue for both the assessment years is dismissed. 10. Coming to the levy of penalty us. 271 (1)(c) on the issue of disallowance on depreciation, this Bench of the Tribunal while disposing of the appeal for the AY 2002-03 and 2003-04 in ITA No. 293 and 294/DEL/2010 vide....