COMMISSIONER OF INCOME TAX Vs. PADMA DEVI JAIN

JUDGEMENT

(1.) Revenue has filed this application under section 256(2) of Income Tax Act for calling statement of the case from Tribunal, Indore Bench on the following stated questions of law, arising out of Tribunal order dt. 29th Aug., 1997 :

(2.) It transpires that assessee had claimed interest payment of Rs. 7,19,164 to Escorts Ltd. on the outstanding bills and delayed payments. She had filed a detailed chart of interest payment and three certificates from M/s Escorts Ltd. in support of her claim. However, M/s Excorts Ltd. later on issued a clarification regarding assessment year 1989-90 and on scrutiny it was found that out of the claimed amount, M/s Escorts Ltd. had credited an interest of Rs. 2,12,162 to the assessee's account. Upon this she was asked to explain why this interest amount be not added towards her disclosed income as it was claimed by her in the P &L a/c. It was explained by her that the interest amount would be offered for taxation for the ensuing assessment year1991-92. The assessing officer rejected her claim and made addition of this amount and initiated penalty proceedings against her under section 271(1)(c) of the Act. She took an appeal before Commissioner (Appeals) who vide detailed order dt. 3rd April, 1992, accepted her explanation and concluded that the return filed by the assessee could not be treated false in the facts and circumstances of the case. It was found by him that assessee had not made any wrong claim for interest, nor had she furnished any inadequate particulars of her income. On the contrary, it was on the basis of the facts furnished by her that assessing officer had come to know about the disputed overcharge interest amount.

(3.) It was further observed by him that where the assessee did not include any particular item in taxable income under bona fide belief, it would not be justified to condemn the return as false to invite penalty.