1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.2380 OF 2009 The Commissioner of Income Tax – 2, Mumbai ..Appellant. Versus M/s.G.G. Automotive Gears Limited ..Respondent. Mr.A.S. Shivsharan for the appellant. Mr.Anil Mishra i/by PKP Legal Solutions for the respondent. CORAM : Dr.D.Y. Chandrachud & J.P. Devadhar, JJ. DATE : 9th March, 2010. P.C. : 1. The appeal by the Revenue under Section 260A of the Income Tax Act, 1961 raises the question, as to whether the Tribunal was justified in deleting a penalty of Rs.10.18 lakhs imposed under Section 271(1)(c). While ordering deletion, in the context of an appeal for assessment year 2000-2001, the Tribunal observed that the addition / dis-allowance which was made by the Assessing Officer was on the basis of a tax audit report submitted by the assessee together with the return. Hence, the assessee had in the return 2 disclosed all material particulars. Apart from this, the Tribunal observed that the dis-allowance was of a debatable nature on which two views were possible with regard to the claim of expenditure. In the circumstances, the exercise of discretion for the imposition of a penalty was not warranted. The approach and the findings of the Tribunal do not suffer from any error and no substantial question of law is raised. The appeal shall stand dismissed. There shall be no order as to costs. (J.P. Devadhar, J.) (Dr.D.Y. Chandrachud, J.)