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TMI Blog2017 (1) TMI 1372X X X X Extracts X X X X X X X X Extracts X X X X ..... of law in respect of the deduction claimed by the assessee. When the Hon’ble High Court has framed substantial question of law, it becomes apparent that the addition is certainly debatable. The framing of a substantial question of law by Hon’ble High Court lends credence to the bona fides of the assessee in claiming deduction. Once it turns out that the claim of assessee could have been considered for deduction as per instructions, which is not completely debarred at all, the mere fact of confirmation of the disallowance of deduction would not per se lead to imposition of penalty. Since the addition in respect of which penalty has been levied by the authorities below has been held by the Hon’ble High Court to be involving a substantial que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in ITA No. 569/2013 held as under:- 11.At this stage, Ld. counsel for the appellant-SEC has pointed out that the Commissioner of income tax (appeals) had decided the issue in their section 57 (3) that is availability of expenditure having exes with earning of the said income was not examined. This ground/argument was an alternative. Ld. Counsel for the revenue submits that this question may be remitted to the Ld. Commissioner of income tax (appeal) as he had not decided the said question having allowed the appeal in entirety holding that the entire interest was exempt under this section 80P. We appreciate the stand taken by the Ld. counsel for the revenue and accordingly the matter is remitted on the said aspect to the Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erative banks and commercial banks, as provided in the chart submitted before us. It is observed that the gross income earned by the assessee comprises of 3 components which are as under: i) interest income earned from investment with co-operative banks ii) interest income earned from investment with commercial banks and, iii) interest paid on deposits to members. And as there is substantial amount of interest earned from deposits with co-operative banks, the assessee would be eligible for deduction under section 80P(2)(d). We are therefore inclined to allow the interest earned by the assessee from the deposits made with co-operative society to be eligible for deduction under section 80P of the Act. Accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was debatable in nature and the disallowance was made on bona fides and is of opinion between the assessee and the Ld. AO. He submitted that the claim of deduction under section 80 P was bona fides supported by proper disclosures made in the return of income accompanying by documents and therefore no penalty under section 271 (1) (c) could be levied here is submitted that assessee had fully disclosed all the material facts for the purposes of consideration of the claim and therefore the penalty could not be imposed for alleged furnishing of inaccurate particulars of income. He submitted that the claim under section 80 P made by the assessee was under a presumption that benefit under section 80 P (1) has been taken away from 01/04/2007 from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which Hon ble Delhi High Court in assessee s own case for the relevant assessment year under consideration had sent back the issue for re-adjudication before Ld. CIT (A), by framing specific question of law in respect of the deduction claimed by the assessee. When the Hon ble High Court has framed substantial question of law, it becomes apparent that the addition is certainly debatable. The framing of a substantial question of law by Hon ble High Court lends credence to the bona fides of the assessee in claiming deduction. Once it turns out that the claim of assessee could have been considered for deduction as per instructions, which is not completely debarred at all, the mere fact of confirmation of the disallowance of deduction would not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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