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TMI Blog2010 (2) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... the second unit. The learned Commissioner of Income-tax (Appeals) also upheld non-inclusion of income from sale of scraps for computing deduction under section 80-IB of the Income-tax Act. Similarly, interest on fixed deposit receipts and interest from debtors was also held to be income from other sources and also depreciation on fixed assets was not considered for deduction under section 80-IB of the Income-tax Act. During the present proceedings, the assessee stated that it had preferred appeal before the Tribunal, however, the Assessing Officer did not accept the contention of the assessee and proceeded with penalty matter. It was submitted that income was not positive even after addition. The contention of the assessee was rejected. It was submitted before the learned Commissioner of Income-tax (Appeals) that for disallowance of the expenditure no penalty is imposable. It was submitted that penalty was imposed in respect of four disallowances. The first was interest received from customers deduction under section 80-IB of the Income-tax Act was claimed. The hon'ble Gujarat High Court in the case of Nirma Industries Ltd. v. Deputy CIT [2006] 283 ITR 402 (Guj) ; 202 CTR 198 ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elled." The learned Departmental representative relied upon the order of the Assessing Officer. On consideration of the above facts and submissions of the learned Departmental representative, we are of the view that no interference is called for in the matter. The learned Commissioner of Income-tax (Appeals) noted the major issues on which the penalty is imposed have been decided in favour of the assessee by the Tribunal. Therefore, the penalty could not be imposed. The reallocation of the expenditure for the purpose of working out deduction under section 80-IB of the Income-tax Act was held to be debatable and that in the case of Mira Industries [2003] 87 ITD 475 (Ahd) the Tribunal has decided the issue of grant of deduction under section 80-IB of the Income-tax Act in favour of the assessee. The learned Commissioner of Income-tax (Appeals), therefore, correctly noted that the assessee could not have anticipated the inclusion of interest on fixed deposit receipts for the purpose of deduction under section 80-IB of the Income-tax Act. The finding of the learned Commissioner of Incometax (Appeals), therefore shows that the addition on the issues have either been deleted or that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fferent Benches of the Tribunal including the Ahmedabad Bench was taking a consistent view in favour of the assessee allowing deduction under section 80-IB of the Income-tax Act, 1961 on the gross total income. 8. The hon'ble Rajasthan High Court in the case of CIT v. Harshvardhan Chemicals and Mineral Ltd. [2003] 259 ITR 212 (Raj) held as under (headnote) : 'For the assessment year 1988-89, the assessee had filed an original return claiming deductions under sections 80HH and 80-I of the Income-tax Act, 1961, and declaring a loss, as well as a revised return declaring total income at nil as there was addition in the original return on account of wrong claim to deductions. A penalty was imposed on the assessee under section 271(1)(c), which the Appellate Tribunal deleted holding that : (i) where an arguable, controversial or debatable deduction is claimed, the claim could not be said to be false, otherwise it would become impossible for any assessee to raise any claims or deductions which might be debatable, and it was not the intention of the Legislature to make punishable such claims, if they were not accepted ; (ii) the total income according to the original and revised com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the stand of the Department was that since no commercial production was there, the assessee is not entitled for such claim. All the facts of the case were before the Assessing Officer and as such, it cannot be said to be a case of filing inaccurate particulars or making any concealment before the Assessing Officer. Even if the assessee would claim this depreciation, etc., on the merits and rejected by the Assessing Officer, still law is clear that even if the explanation of the assessee is rejected, no case for imposition of penalty would be made out.' 9. The hon'ble Punjab and Haryana High Court in the case of CIT v. Prem Dass (No. 2) [2001] 248 ITR 237 (P H) dismissed the Departmental appeal in which the Tribunal cancelled the penalty on the ground that difference between the returned income and the assessed income was due to difference of opinion about estimated rates of income and expenditure. The hon'ble Calcutta High Court in the case of Durga Kamal Rice Mills v. CIT [2004] 265 ITR 25 (Cal) held that when two views are possible and when no clear and definite inference can be drawn in a penalty proceeding, penalty cannot be imposed. 10. The hon'ble Supreme Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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