2010 (10) TMI 98 - HC - Income Tax

Penalty - guest house expenses and the claim of the assessee for interest income from Fixed Deposit Receipts under Section 80HHC of the Act - assessee had filed its return of income for the relevant assessment year much prior to the issuance being finally settled by this Court and the Supreme Court against the respondent-assessee - Held that - expenses were debatable on the date the respondent-assessee filed its return - no penalty can be levied - appeal is dismissed

Summary

The High Court of Delhi dismissed an appeal challenging a penalty imposed under Section 271(1)(c) of the Income Tax Act for the Assessment Year 1995-1996. The penalty was related to guest house expenses and interest income from Fixed Deposit Receipts. The court ruled that since the expenses were debatable when the return was filed, no penalty could be levied. The appeal was dismissed.