IN HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA-29-2015 (O&M) Date of decision:- 05.05.2015 Commissioner of Income Tax-II, Ludhiana ...Appellant Versus M/s Hero Cycles Ltd. ...Respondent CORAM: HON'BLE MR. JUSTICE S.J. VAZIFDAR, ACTING CHIEF JUSTICE HON BLE MR. JUSTICE G.S. SANDHAWALIA Present: Ms. Savita Saxena, Advocate, for appellant. **** S.J. VAZIFDAR, A.C.J. (ORAL) CM-3371-CII-2015 (for condonation of delay in refiling) For reasons mentioned in application, delay of 360 days in refiling appeal is condoned. Disposed of. CM-3372-CII-2015 (for exemption) application is allowed subject to all just exceptions. ITA-29-2015 This is appeal against order of Income Tax Appellate Tribunal dated 20.05.2013 dismissing appellant s appeal against order of CIT (Appeals) which set aside A.O s order imposing penalty under Section 271(1)(c) of Income Tax Act, 1961. 2. matter pertains to assessment year 2002-2003. respondent/assessee claimed deduction in respect of work done on roof of factory contending that it was revenue expense. quantum proceedings, we are informed, have attained finality and have been decided against respondent/assessee. It has been held that same was capital expense. We would presume that to be so. Tribunal has, however, agreed with CIT (Appeals) that penalty ought not to be imposed for there does not appear to have been any concealment of relevant facts. assessee bonafide contended that it is entitled to treat expenses on revenue account. It is not contended that merely because quantum AMODH SHARMA 2015.05.07 14:43 I attest to accuracy and authenticity of this document chandigarh ITA-29-2015 (O&M) 2 proceedings are decided against assessee, penalty must follow irrespective of facts and circumstances of case. CIT (Appeals) has in detailed judgement considered law and facts. Tribunal has agreed with same. We see no reason to interfere with exercise of discretion by authorities. exercise of discretion cannot be said to be unfair, unreasonable or perverse. 3. It is sufficient to note only few things. There were several decisions of CIT (Appeals) in respondent s own case. Earlier, CIT (Appeals) had allowed expenses to be treated on revenue account. Tribunal had several years later held in favour of revenue holding that expenses must be held to be on capital account. This was basis of judgement of Supreme Court which was rendered subsequently. Thus, though quantum appeal has been decided against respondent, there is nothing to indicate that respondent suppressed any fact or that respondent misled authorities. It was legal contention. In these circumstances, Tribunal s reliance upon judgement of Supreme Court in CIT Vs Reliance Petroproducts Pvt. Ltd., 322 ITR 158 was well founded. observations of Supreme Court have been specifically mentioned in concluding paragraph of decision of Tribunal itself. 4. appeal is, therefore, dismissed. (S.J. VAZIFDAR) ACTING CHIEF JUSTICE (G.S. SANDHAWALIA) JUDGE 05.05.2015 Amodh AMODH SHARMA 2015.05.07 14:43 I attest to accuracy and authenticity of this document chandigarh Commissioner of Income Tax-II, Ludhiana v. M/s Hero Cycles Ltd