2010 (5) TMI 843

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....penalty u/s.271(1)(c) by relying on the judgement of the Hon'ble Supreme Court in the case of Union of India and Ors. Vs. Dharmendra Textile Processors & Ors. [(2008) 306 ITR 277 (SC)], which was not cited by the learned Departmental Representative at the time of hearing. She relied on the judgement of the Hon'ble jurisdictional High Court in the case of Naresh Pahuja Vs. DCIT in which it has been held that the judgement not cited by the parties during the course of hearing should not be referred to in deciding the appeal. She contended that since the judgement of the Hon'ble Supreme Court in the case of Dharmendra Textile Processors & Ors. (supra) was not referred to by the learned Departmental Representative during the course of hearing, ....

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....The Assessing Officer held that the assessee had wrongly claimed deduction on this amount, which was not available as it could not be held as income derived from the industrial undertaking. He accordingly assessed such income under the head capital gains and denied the deduction. This view of the AO was upheld in further appeals. 6. Thereafter the Assessing Officer imposed penalty u/s 271(1)(c) in respect of this amount, which was upheld by the learned CIT(A). The assessee came up in appeal before the Tribunal. The Tribunal noted that the assessee claimed deduction in respect of profit on sale of shares which was patently not income earned from manufacturing and sale of tooth paste. This issue has been discussed at length in para 5 onwar....