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TMI Blog2015 (11) TMI 753X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 271(1)(c) of the Act can be levied where the income is assessed under section 68 of the Income Tax Act, 1961. Also in the case of M/s. Manjunatha Cotton and Ginning Factor, Ballary (2013 (7) TMI 620 - KARNATAKA HIGH COURT ) has held that if the explanation offered by the assessee, even though not substantiated, but is found to be bonafide and all facts relating to the same and material to the computation of his total income has been disclosed by him, no penalty could be imposed. - Decided in favour of assessee. - ITA No. 93/Ran/2013 - - - Dated:- 27-10-2015 - N. S. Saini, AM And George Mathan, JM For the Petitioner : Shri V K Jalan - FCA For the Respondent : Shri Deepak Roushan - Sr. SC ORDER Per N S Saini, Acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particulars of such income. 7. On appeal, Commissioner of Income Tax (Appeals) also confirmed the levy of penalty on the ground that the assessee had no valid explanation in regard to source of increase in share capital for ₹ 90 Lac in the names of Sri Mathura Prasad Singh (HUF), Sri Ajay Suman, Sri Sanjay Suman Sri Vijay Singh. 8. The Authorized Representative of the assessee vehemently arguing and assailing the order of the Commissioner of Income Tax (Appeals) submitted that the Hon'ble Bombay High Court in the case of Shree Nirmal Commercial Ltd. vs. CIT reported in - 2008-TIOL-426-HC-MUM-IT while deciding the following question of law:- 3. Whether on the facts and circumstances of the case when the income assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the explanation offered, even though not substantiated by the assessee, but is found to be bonafide and all facts relating to the same and material to the computation of his total income have been disclosed by him, no penalty could be imposed. 10. On the other hand, Departmental Representative relied on the orders of the lower authorities. 11. We find that in the instant case, the Assessing Officer levied penalty under section 271(1)(c) of the Act for concealment of income / submission of inaccurate particulars of income on the amount of addition of ₹ 90 Lac claimed to have been received as share application by the assessee. The addition made was confirmed by the Tribunal in appeal filed before it by the assessee. We find tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the case of Santosh Hosiery in Civil Appeal No. 1117/2001 in its order dated 03/02/2001 observed that substantial question of law must be debatable . The Hon'ble Supreme Court while deciding as to what is the substantial question of law has held that same must be debatable. 14. Similarly, the Hon'ble Bombay High Court in the case of CIT vs. M/s. Nayan Builders and Developers in Tax Appeal No. 415/2012 order dated 08/07/2014 has held that when the High Court admits substantial question of law on an addition, it becomes apparent that the addition is certainly debatable. In such circumstances, penalty cannot be levied under section 271(1)(c) of the Act. 15. In view of the foregoing reasons, we set aside the orders of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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