1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. INCOME TAX APPEAL NO.1388 OF 2008 The Commissioner of Income Tax-5 ... Appellant. Vs. M/s.West Coast Roller Mills Pvt.Ltd. ...Respondent. Mr.Suresh Kumar for the Appellant. Mr.P.R.Toprani for the Respondent. CORAM : DR. D.Y.CHANDRACHUD & J.P. DEVADHAR, JJ. 18th January, 2010. P.C.: The appeal was admitted on the following substantial question of law : “ Whether, on the facts and circumstances of the case, the Tribunal was right in law in confirming the cancellation of penalty imposed under Section 271(1)(c) on the sole ground that no penalty is attracted where the assessment results in loss and relying thereby on the decision of the Apex Cort in the case of Virtual Soft Systems Limited 289 ITR 83, which has since been reversed by the Apex Court in their decision in the case of CIT – 1 Ahmedabad v/s. Gold Coin Health Food P. Limited, 304 ITR 308 SC?” Counsel appearing on behalf of the Revenue and Counsel appearing on behalf of the Assessee are agreed that the aforesaid 2 question is covered by the judgment of the Supreme Court in the case of CIT vs. Gold Coin Health Food P. Ltd., (2008) 304 ITR 308, in favour of the Revenue. The Tribunal has relied upon the earlier judgment of the Supreme Court in Virtual Soft Systems Ltd. vs. CIT, (2007) 289 ITR 83, which has been held in the subsequent judgment in the Gold Coin (supra) not to lay down the correct position in law. In the circumstances, while the question of law shall stand answered in terms of the law laid down by the Supreme Court in Gold Coin (supra), in favour of the Revenue, the proceedings shall have to be remitted back to the Tribunal for a decision on merits. The appeal shall stand allowed in the aforesaid terms. There shall be no order as to costs. ( Dr.D.Y.Chandrachud, J.) ( J.P.Devadhar, J.)