INCOME TAX (LTU) vs. NESTLE INDIA LTD

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ITA/1508/2010HC Delhi01 October 20102 pages
AI SummaryDismissed

What did the High Court hold?

The Delhi High Court held that no penalty can be levied if the expenses were debatable at the time of filing the return. Therefore, the appeal against the ITAT's deletion of penalty was dismissed.

What were the facts?

The appeal challenges an ITAT order concerning the deletion of penalty under Section 271(1)(c) for guest house expenses and the claim of interest income under Section 80HHC. The revenue conceded that the expenses were debatable when the return was filed.

What were the issues?

Whether penalty under Section 271(1)(c) can be levied for debatable expenses. The eligibility of interest income for deduction under Section 80HHC was also an issue.

Which sections of the Income-tax Act were involved?

Section 260A,Section 271(1)(c),Section 80HHC

AI-generated summary — verify with the full judgment below

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#3 $~ * IN THE HIGH COURT OF DELHI AT NEW DELHI

+ ITA 1508/2010

THE COMMISSIONER OF

INCOME TAX (LTU)

..... Appellant Through: Mr. Sanjeev Sabharwal, , Advocate

versus

NESTLE INDIA LTD.

..... Respondent

Through: Mr. Ajay Vohra, Advocate with

Ms. Kavita Jha, Advocate.

Date of Decision: 01st October, 2010

CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE MANMOHAN

1.

Whether the Reporters of local papers may be allowed to see the judgment?

2.

To be referred to the Reporter or not?

3.

Whether the judgment should be reported in the Digest?

MANMOHAN, J

CM No. 17302/2010 (exemption)

Allowed, subject to all just exceptions.

Accordingly, the application stands disposed of. ITA 1508/2010 1. The present appeal has been filed under Section 260A of Income Tax Act, 1961 (for brevity, “Act”) challenging the order dated 06th November, 2009 passed by the Income Tax Appellate Tribunal (in short “Tribunal”) in ITA No. 12/Del/2008, for the Assessment Year 1995- 1996. 2010:DHC:4935-DB

2.

The issue involved in this appeal is with regard to deletion of penalty imposed by the Assessing Officer (in short, “AO”) under Section 271(1)(c) of the Act in respect of guest house expenses and the claim of the respondent-assessee for interest income from Fixed Deposit Receipts under Section 80HHC of the Act.

3.

Mr. Sanjeev Sabharwal, learned counsel for the revenue fairly stated at the bar that the respondent-assessee had filed its return of income for the relevant assessment year much prior to the issuance being finally settled by this Court and the Supreme Court against the respondent-assessee.

4.

Consequently, as the said expenses were debatable on the date the respondent-assessee filed its return, we are of the opinion that no penalty can be levied [see Malabar Industrial Co. Ltd. Vs. CIT (2000) 243 ITR 83 (SC)]. Accordingly, the present appeal is dismissed in limine.

MANMOHAN, J

CHIEF JUSTICE

OCTOBER 01, 2010 js 2010:DHC:4935-DB

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