TaxTMI 
TaxTMI 
2017 (4) TMI 811
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....herein raised the following grounds of appeal before us: - "Being aggrieved by the order of the learned Commissioner of Income Tax (Appeals)-53, Mumbai, this appeal petition is submitted on the following grounds:- 1. On facts and circumstances of the case and in law, the learned CIT(A) erred in confirming the action of the Ld. A.O in levying penalty of Rs. 1,07,594/- being minimum penalty at the rate 100% of tax by holding that the Ld. A.O was justified in holding that the appellant had furnished inaccurate particulars of its income by way of making an untenable claim for deduction u/s. 80-IB(10) in respect of interest on fixed deposit/SB Account amounting to Rs. 3,48,202/-. The levy of penalty, considering the claim of the appellant as ....
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....of the 'Act', therein calling upon the assessee to show cause as to why penalty under Section 271(1)(c) in respect of the wrong claim of deduction under Section 80IB(10) may not be imposed on it. The assessee submitted before the A.O that as it was in receipt of interest income on the amounts which were parked as fixed deposits, which had to be kept as margin money for facilitating obtaining of various permissions required for smooth running of the project, had thus remaining under a bonafide belief that the interest income of Rs. 3,48,202/-generated on such fixed deposits had a clear nexus with the business of the assessee, therein treated the same as part of its business 'income' and claimed deduction under Section 80IB(10) in respect of ....
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....the banks by way of fixed deposits was raised remaining under the bonafide belief that as the same had an inextricable nexus with the business of the assessee, therein submitted that pursuant to the judgment of the Hon'ble Supreme Court in the case of Liberty India Vs. CIT 317 ITR 218 (SC), wherein the Hon'ble Apex Court had interpreted the scope and gamut of the term 'derived from', and had thus once and for all put to rest the divergent and conflicting views as regards the same, the assessee therein yielding to the said interpretation of the Hon'ble Supreme Court had thus itself conceded the said point in the course of its quantum appeal before the Tribunal. The CIT(A) however not being persuaded to subscribe to the contention of the asse....
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.... by adopting a different interpretation of the scope of the statutory provision under which the deduction had been raised, would not automatically lead to levy of penalty under Section 271(1)(c) in the hands of the assessee. It was thus submitted by the ld. A.R that in the backdrop of the facts involved in the case, the penalty imposed under Section 271(1)(c) was liable to be vacated. Per contra, the. Ld. D.R therein submitted that as the assessee by wrongly including the 'Income from other sources' of Rs. 3,48,202/- (supra) in its 'business income' had raised a false claim of deduction under Section 80IB(10) in respect of the said amount, therefore, the penalty had rightly been imposed by the A.O and sustained by the CIT(A). It was submitt....
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....before the A.O, therefore in the backdrop of the aforesaid factual matrix it can safely be concluded that the assessee on the basis of the facts as they so remained, being of the view that the interest on the margin money parked with the banks was eligible for claim of deduction under Section 80IB(10), thus being prompted by his said conviction had therein included the same in the 'business income' and claimed the consequential deduction under Sec. 80IB(10) with respect to the said amount. We further find substantial force in the contention of the assessee that after the term 'derived from' used in Section 80-IB(10) was strictly construed and given a narrow connotation as against the word 'attributable to' by the Hon'ble Supreme Court in th....
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....in the Hon'ble Apex Court had held as under: - "We have already seen the meaning of the word "particulars" in the earlier part of this judgment. Reading the words in conjunction, they must mean the details supplied in the return, which are not accurate, not exact or correct, not according to truth or erroneous. We must hasten to add here that in this case, there is no finding that any details supplied by the assessee in its return were found to be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty under S. 271(1)(c) of the Act. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the asse....