:1: bgp bgp bgp IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION INCOME INCOME INCOME TAX APPEAL NO.829 OF 2008 TAX APPEAL NO.829 OF 2008 TAX APPEAL NO.829 OF 2008 The Commissioner of Income Tax, ..Appellant Vs. M/s.Narita Investments Pvt.Ltd. ..Respondent Mr.Suresh Kumar for the Appellant. Ms.Vasanti B.Patel for the Respondent. CORAM CORAM CORAM :- DR.S.RADHAKRISHNAN & :- DR.S.RADHAKRISHNAN & :- DR.S.RADHAKRISHNAN & S.J.KATHAWALLA, S.J.KATHAWALLA, S.J.KATHAWALLA, JJ. JJ. JJ. DATE DATE DATE : 26TH AUGUST, 2008 : 26TH AUGUST, 2008 : 26TH AUGUST, 2008 P.C. P.C. P.C. 1. Heard the learned Counsel for the parties. By the above Appeal, the following substantial question of law sought to be raised: "Whether on the facts and in the circumstances of the case, the Hon’ble Tribunal was justified in law in directing the Assessing Officer to delete the penalty levied under Section 271(1)(c) amounting to Rs.4.34 crores?" 2. We have perused the judgment dated 26th June,2007 passed by the Income Tax Appellate Tribunal. In paragraph 10 of the said order, the Tribunal had categorically observed that; 10. Having carefully examined this disclosure made by the Assessee while filing the return of income we are of the view that though the assessee has changed the method of valuation of closing stock and claimed loss against the profit earned in the commercial project it cannot be held that the assessee is guilty of concealment or furnishing inaccurate particulars...................... :2: 3. In paragraph 16 again, the Tribunal has categorically given the following finding: 16. Since the Assessee had made change in the method of valuation in this year on the basis of expert opinion, Accountancy Standard and valuation report it cannot be held that he was not having bona fide belief while raising the claim, though the claim may or may not sustain. At this stage we have to see whether Assessee has bona fide belief for making a change in method of valuation. Taking into account all the relevant facts we are of the view that the Assessee had the bona fide belief in making a change in the method of valuation of work-in-progress. Hence, Explanation 1 to 271(1)(c) is not attracted. 4. In view of the aforesaid categorical findings of the Tribunal, there is absolutely no question of law either of concealment of the income or the Assessee was not under the bonafide belief in making a change in the method of valuation. 5. In view of the above, we are not going into the question which is sought to be raised by the learned Counsel for the Appellant Mr.Suresh Kumar with regard to the amended Explanation 1 to Section 271 (1)(c) which was introduced in the year 2008, however with retrospective effect from 1st April,1989. (S.J.KATHAWALLA,J.) (S.J.KATHAWALLA,J.) (S.J.KATHAWALLA,J.) (DR.S.RADHAKRISHNAN,J.) (DR.S.RADHAKRISHNAN,J.) (DR.S.RADHAKRISHNAN,J.)