COMMISSIONER OF INCOME TAX Vs. S. DHANABAL

JUDGEMENT

(1.) THIS appeal, filed on behalf of the Revenue, pertains to the asst. yr. 2001 -02. It is directed against the order passed by

(2.) FOR the assessment year under consideration, the assessee filed a return declaring an income of Rs. 41,30,950 and claimed 100 per cent deduction under s. 80HHE of the IT Act, 1961 (hereinafter referred to as 'the said Act'), in respect of the profits from rendering software services. It is an admitted position that for this assessment year, i.e., 2001 -02, the assessee could have claimed only 80 per cent deduction. The entire issue is with regard to the claim of the assessee for 100 per cent deduction and as to whether the assessee in doing so made itself liable for penalty under s. 271(1)(c) of the said Act.

(3.) IN the course of the assessment under s. 143(3), the AO pointed out to the assessee that his claim of 100 per cent deduction under s. 80HHE was not permissible and he would be entitled only to an 80 per cent deduction. The assessee, on realising the mistake, accepted the same. The assessment was completed accordingly and the income was assessed at Rs. 63,03,463 after allowing a deduction at 80 per cent as against the claimed deduction of 100 per cent under s. 80HHE. Penalty proceedings were initiated separately.