1 ITXA5804-10.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ttm INCOME TAX APPEAL NO.5804 OF 2010 The Commissioner of Income Tax-4 .. Appellant Vs. M/s.Mewar International P.vt.Ltd. .. Respondent. Mr.Vimal Gupta for the appellant Mr.Atul K. Jasani for the respondent CORAM : J.P. DEVADHAR & K.K. TATED, JJ. DATE : 27th SEPTEMBER, 2011. P.C. 1. Whether the ITAT was justified in canceling the penalty levied u/s. 271(1)(c) of the I.T.Act, 1961 is the question raised in this appeal. 2. In the present case, the SEBI turnover charges claimed by the assessee were disallowed by the Assessing Officer u/s.43B of the I.T.Act, 1961 and added back to the income of the assessee. Similarly, share trading loss which was set off against the brokerage income and other income of the assessee was disallowed by invoking explanation to s.73 of the I.T.Act, 1961. In view of the aforesaid additions, Assessing Officer invoked s.271(1) (c) of the Act and levied penalty. The appeal filed by the Assessee was dismissed by the CIT(A). On further appeal, the ITAT has deleted penalty 2 ITXA5804-10.doc on the ground that the question as to whether the SEBI turnover charges constituted fees u/s.43B of the Act was a debatable issue and since the Assessee has disclosed all the materials in the return of income, it was not a fit case for imposition of penalty u/s.271(1)(c) of the Act. 3. As regards the disallowance of set off of share trading loss, the Tribunal has recorded a finding of fact that at the relevant time there was a judgment of the Special Bench in the case of Aman Portfolio (P) Ltd. vs. Dy.Commissioner of Income-tax reported in (2005) 92 ITD 324 (DEL) which was in favour of the assessee. In this view of the matter, no fault can be found with the decision of the ITAT that the assessee was justified in seeking set off and consequently in deleting penalty levied u/s.271(1)(c) of the Act. 3. Accordingly, the appeal is dismissed. (J.P. DEVADHAR, J.) (K.K. TATED, J.)