2014 (7) TMI 1204

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....s an Appeal filed by the Assessee arising from the order of learned CIT(A)-XVI Ahmedabad, dated 1st June, 2012. The assessee has raised the following grounds: "The Ld. CIT(A) has erred in law and on facts in upholding the levy of penalty of Rs. 2,65,490/- on disallowance of loss on RBI Bonds, on the ground of furnishing inaccurate particulars of income without properly appreciating the facts and....

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....ief Bonds. It was also pointed out that, the 9% Relief Bonds is a debt instrument and the interest therefrom is tax free and accordingly, it was inferred that, if in any way, loss is incurred, it will reduce the tax free income. The assessee has contended that he has purchased 9% Tax free Relief Bond from the open market at a premium and on maturity he received the face value only. The difference ....

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.... the levy of penalty matter was carried before the First Appellate Authority and learned CIT(A) has held that at the time of filing the return the claim was made but the assessee was fully aware that such claim was not an allowable claim as per law. According to learned CIT(A), by no stretch of imagination, it was a case which had fallen under the category of debatable issue but it was a case of f....