CIT vs. M/s S. M. Construction (Bombay High Court)

DATE: March 3, 2015 (Date of pronouncement)
DATE: March 12, 2015 (Date of publication)
AY: 2005-06
FILE: Click here to download the file in pdf format
S. 271(1)(c): Law laid down in Zoom Comm 327 ITR 510 (Del) does not apply if claim of assessee is bona fide and not in defiance of the law

There has been a complete disclosure of all facts by the assessee. Besides the claim made by the assessee of not being taxable was not found to be not bonafide. As held by the Supreme Court in Reliance Petroproducts Pvt. Ltd 322 ITR 158 making of an incorrect claim would not tantamount to furnishing inaccurate particulars of income. In this case, the assessee bonafide believed that the difference of Rs.1.65 Crores and Rs.55 Lakhs is not chargeable to tax and had so stated before the Assessing Officer. The fact that the explanation of assessee is not accepted in quantum proceedings would not ipso facto visit the assessee with penalty in the absence of the claim being held to be not bonafide. The decision of the Delhi High Court in Zoom Communication P. Ltd. 327 ITR 510 (Del) is not applicable in the present facts for the reason that in this case, the stand taken by the assessee cannot be said to be in defiance of law and thus not bonafide. In this case it is not the case of revenue that the claim made by the assessee was not on the basis of bonafide view.

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