2016 (6) TMI 563

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....ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Revenue is in appeal against the judgement of the Income Tax Appellate Tribunal dated 08.05.2015 raising following question for our consideration: "[A] Whether in law and on facts and in the circumstances of the case, the ITAT was justified in deleting the penalty levied u/s. 271(1)(c) of the Act even though the assessee had credite....

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....fit and loss account but had directly credited the same to the capital reserve account in the balance sheet. According to the Assessing Officer, thus, the assessee had reduced the book profit. This was relevant because the case of the assessee fell under Section 115JB of the Income Tax Act, 1961. 3. The Assessing Officer made quantum additions which have been upheld by CIT (Appeals) and the Tri....

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....ng fiction being triggered byt eh conduct of the assessee. 7.19 Be that as it may, even assuming that deeming fiction under Explanation 1 to Section 271(1)(c) can be triggered by a wrong legal claim, it cannot be the case that merely because there is a wrong claim, even if that be so, penalty under Section 27(1)(c) can be imposed. This deeming fiction under section 271(1)(c) only shifts the onu....

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....as it may, with respect to the penalty, the Tribunal, relied upon the decision of Supreme Court in case of CIT vs. Reliance Petroproducts Pvt. Ltd. reported in [2010] 322 ITR 158 (SC) and observed as under: "15. We find that the Assessing Officer was not justified in holding that the inaccurate particulars of income relating to capital gain was furnished by the assessee. No inaccuracy in any of....