1997 (9) TMI 42

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....nion of this court. The questions are as under : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in cancelling the penalty of Rs. 38,100 imposed under section 271(1)(c) of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the decision of the Income-tax Appellate Tribunal is perverse inasmuch as the relevant facts have not been properly evaluated and wrong conclusion is drawn ?" We have heard learned standing counsel for the Income-tax Department in support of this application, and are of the opinion that the order of the Income-tax Appellate Tribunal is concluded by findings of fact and does not give rise to any question of law. The Tribunal has in ....

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....uction in view of section 40(b) of the Act, being the amount of interest paid to a partner of a firm. On this finding, the assessee was eventually subjected to a penalty of Rs. 38,100 by the Income-tax Officer under section 271(1)(c) of the Act after obtaining the approval of the concerned Inspecting Assistant Commissioner of Income-tax. The imposition of penalty was confirmed in appeal by the Commissioner of Income-tax (Appeals). However, when the matter came to be considered by the Income-tax Appellate Tribunal in second appeal, the Tribunal did not agree with the income-tax authorities and cancelled the penalty order. It held : "We are not convinced of the argument given by the Departmental authorities that withdrawal or transfer of fu....