TaxTMI 
TaxTMI 
2026 (9) TMI 869
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....arned advocate Mr. B.S. Soparkar appearing for the respondent. These appeals are admitted for consideration of the following substantial questions of law by order dated 19.07.2011 and 04.05.2011 respectively: SUBSTANTIAL QUESTION OF LAW IN TAX APPEAL No. 2089 of 2009: "Whether the Appellate Tribunal is right in law and on facts in reversing the order passed by the CIT(A) and thereby deleting the penalty of Rs. 33,66,07,201/- levied u/s. 271(1)(c) of the Act?" SUBSTANTIAL QUESTION OF LAW IN TAX APPEAL No. 169 of 2010: "Whether the Appellate Tribunal is right in law and on facts in reversing the order passed by CIT(A) and thereby deleting the penalty of Rs. 9.25 crores levied u/s. 271(1)(c) of the I.T. Act?....
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....ned CIT (A) in his order. 2.1 The Assessing Officer initiated penalty proceedings u/s. 271(1)(c) of the Act in respect of all the additions including the addition of Rs. 92,62,52,740 and ITA No. 1972/Ahd/2007 after considering the explanation of the assessee levied the penalty of Rs. 59,69,70,000. 2.2 Aggrieved, assessee carried the matter in appeal before the CIT (A) and the learned CIT(A) vide paragraph 21 and 22 of his order, subject to certain observation, has deleted the penalty u/s. 271 (1) (c) in respect of the additions mentioned in Sl. (11) and (m) of paragraph 2 above of this order Paragraph 21 and 22 of the CIT(A)'s order reads as under: "21 In regard to the penalty referable to the other two main a....
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....n to be decided in the present appeal. The only question that requires our decision in the present appeal is "Whether on the facts and circumstance, for such disallowance/addition penalty u/s. 271(1)(c) can be levied ?. We find that undisputedly the interest on SPNs was not allowed by the assesseing officer by not accepting various explanations of the assessee and such action of the assessing ofiicer was confirmed by the learned CIT(A) as well as the Tribunal. On further appeal filed by the assesee against the said order of the Tribunal, the same has been admitted by the Hon'ble Gujarat High Court, vide order dt. 20.11.2006 in Tax Appeal No. 1219 of 2006 and others, in terms of the following substantial question of law: "Whethe....
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....ffer explanations or offers explanations which is found to be false or offers an explanation which he is not able to substantiate and fails to prove that such explanations are bonafide and that all the materials relating to the same and material to the computation of income of his income has been disclosed by him. It is not a case of revenue that assessee has not offered an explanation. It is also not a case of the revenue that explanation furnished by the assessee was false. The assessee's case falls in the last category ie where the assessee offers explanations, which he is not able to substantiate and fails to prove such explanation was bonafide. Here necessary facts relating to the claim of interest were made before the AO and there....
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....In support of this proposition reliance can also be placed on the following decisions: (1) Durga Kamal Rice Mills Vs. CIT (2004) 265 ITR 25 (Cal) (2) CIT v. Bacardi Martini Ltd. (2007) 288 ITR 585 (Delhi) (3) Burmah Sell Oil Storage & Distributing Co. of India Ltd. v. ITO (1978) 112 ITR 592 (Cal) (4) CIT v. Amar Nath (1998) 230 ITR 619(AII) (5) CIT v. Calcutta Credit Corpon. (1987) 166 ITR 29(Cal) "Explanation 1 to Section 271(1)(c) of the Income-tax Act, 1961 as stood in the Assessment Year 2000-01, under appeal reads as under "Explanation 1 --- Where in respect of any facts material to the computation of the total income of any person under this Act (A) such person fails to of....
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....of accounts were statutorily audited as required under the Companied Act, 1956 as well as 44AB of the Income-tax Act, 1961. It is nobody's case that the interest expense was not incurred. The interest on NCDs has been allowed u/s. 36(1)(iii) of the Income-tax Act, 1961. In this view of the matter, we are convinced that in the facts and circumstances of the case, the penalty levied u/s 271(1)(c) of the Income-tax Act. 1961 in respect of disallowance of interest/addition of Rs. 92.62.52.470/-is hereby cancelled. 7 In ground No.3, the assessee has challenged the observation of the learned CIT(A) given in paragraph 22 of his order, which is quoted earlier While deleting the panalty levied u/s. 271()(c) of the Act in respect of addi....