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TMI Blog2017 (4) TMI 661X X X X Extracts X X X X X X X X Extracts X X X X ..... ents rendered in CIT V. Samsung India Electronics Limited, (2013 (7) TMI 335 - DELHI HIGH COURT) and CIT V. ESPN Software India Private Limited, (2008 (3) TMI 90 - DELHI HIGH COURT). The Tribunal should have held one way or the other as to whether, the issue was debatable; an aspect which has not been satisfactorily dealt with by the Tribunal. Matter remanded back to the Tribunal - Appeal partially allowed. - T.C.A. No. 661 of 2008 - - - Dated:- 13-3-2017 - Rajiv Shakdher And R. Suresh Kumar, JJ. For Appellant : Mr. J. Naresh Kumar For Respondent : Mr.Vijaya Raghavan for M/s.Subbaraya Aiyar JUDGMENT ( Judgment of the Court was delivered by Rajiv Shakdher, J. ) 1. This is an appeal filed under Section 260 A of the Income Tax Act, 1961 (in short, the Act), against the judgement and order of the Income Tax Appellate Tribunal, dated 22.08.2007. 2. This appeal was admitted on 22.07.2008, when, the following question of law, was framed for consideration, by this Court: Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in deleting the penalty of ₹ 3,66,57,057/- levied under section 271 (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he context of these two facets, the penalty order makes the following two fold observations : 6.1. First, that in the return filed, a loss in the sum of ₹ 10,12,37,470/- was claimed, when, the Assessee had not commenced commercial operations during the relevant previous year. This aspect was sought to be buttressed by placing reliance on the fact that for the relevant period, a profit and loss account had not been prepared, and therefore, when, during scrutiny, a show cause notice was issued and explanation was sought, it was indicated by the Assessee that the claim had been made erroneously. 6.2. Second, in so far as the interest income from short term bank deposits was concerned, the Assessee had attempted to treat this income as business receipts, as against income from other sources, contrary to the well-stated legal position. 7. In so far as this aspect was concerned, the Assessee's stand was that, since, the interest income was inextricably linked with its business activity, it was entitled to treat the same as business receipt. As a matter of fact, the Assessee had set off interest payable on debentures, against interest received on short term deposits. Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alia held that no penalty could be returned, if there was no taxable income or tax assessed for payment, during a particular year. 12. In other words, the Supreme Court, in that judgment, has held that question of evasion and consequent levy of penalty, would only arise, if at the end of the day, the Assessee was required to pay tax. 12.1. We may note here that the judgement in the case Prithipal Singh's case, no longer holds the field in view of subsequent judgements of the Supreme Court in the matter of : CIT V. Unipol Chemicals Intermediates Ltd., [2012] 27 taxmann.com 87 (SC), and CIT V. Gold Coin Health Food (P) Ltd., [2008] 304 ITR 308. 12.2. Continuing with narration of facts, the Revenue being aggrieved, carried the matter in appeal to the Tribunal. The Tribunal vide the impugned judgement, dismissed the appeal preferred by the Revenue. 13. In support of the appeal, Mr.Narayanasamy contended that the view taken by the Tribunal was not sustainable for the following reasons: 13.1. That admittedly, it was a case of concealment of particulars of income and/or furnishing inaccurate particulars, in as much as, the Assessee had filed a loss return, even when, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant particulars were not furnished to the Assessing Officer. 19. In support of his submission, Mr.Vijaya Raghavan relied upon the judgment of the Supreme Court in Commissioner of Income Tax Vs. Reliance Petroproducts (P) Limited, (2010) 322 ITR 0158. 20. We have heard the learned counsels for the parties and perused the record. 21. According to us, the charge levelled against the Assessee, which forms the basis of the penalty is pivoted on two grounds: 21.1. First, that the Assessee had filed a loss return in the sum of ₹ 10,12,37,470/-, when, commercial production had not taken place and, consequently, profit and loss account had not been prepared. 21.2. Second, the manner in which interest receipt was treated by the Assessee. The Assessee had treated the interest received on short term deposits as business receipt, whereas, the Revenue was of the view that it ought to have been treated as income from other sources. 22. A perusal of the impugned judgment of the Tribunal would show that the Tribunal appears to have completely glossed over the first aspect of the matter, related to the loss returned by the Assessee amounting to ₹ 10,12,37,470/- during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st on short term deposits ₹ 38.09 lakhs. 5.It was submitted before us that interest payable exceeded the amount of interest received. The assessee treated it as income from business and as such it was not offered for taxation. It was submitted before us that the assessee was under a bonafide belief that interest is exigible to tax under the head business only and since the amount of interest paid is more than the amount of interest received, there will be no taxable income on this count. 26. Having examined the record and the impugned judgement, we are of the view that the Tribunal's conclusion with regard to the treatment of interest income cannot be found fault with. The reason for the same is that not only was the issue debatable, but also there was no attempt to either conceal the particulars of the said income, or, to furnish inaccurate particulars as alleged or at all. That the issue is debatable is also apparent upon reading of the judgement in the matter of Indian Oil Panipat Power consortium Limited, New Delhi V. Income Tax Officer, (2009) 315 ITR 255 (Delhi). 26.1. As would be evident from the aforesaid extract of the impugned judgement of the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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