IN THE HIGH COURT OF DELHI AT NEW DELHI 
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  01.11.2010 
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 Present:       Mr. Sanjeev Sabharwal and Mr. Utpal Saha, Advocates for the 
 Appellant. 
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 + ITA No.1659/2010 
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 The penalty order passed by the Assessing Officer was set aside by the 
 CIT (Appeals) which order has been confirmed by the ITAT inter alia on the 
 ground that the issued raised was debatable and no inaccurate particulars were 
 furnished by the assessee as is cleared by the following discussions:- 
 ?We have considered the rival submissions. We find that in the penalty 
 proceedings the assessee requested for keeping in abeyance the penalty 
 proceedings for the reason that the major addition has been challenged in 
 further appeal before the Tribunal.  However, this request was rejected.  We 
 find that the disallowance of interest by invoking provisions of section 14A has 
 been deleted by us vide our order in ITA No.1686/Del/2006 of even date. 
 Accordingly, the disallowance cannot be considered to be income in respect of 
 which inaccurate particulars are filed.  Therefore, the penalty on the said 
 disallowance does not survive. 
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 As regards penalty on account of disallowance of prior period 
 expenditure, it is seen that the dispute is not with reference to allowability 
 of claim as such but only the year of allowability thereof.  The learned 
 Commissioner has noted that the issue is debatable and there was complete 
 Disclosure by the assessee in respect of such expenditure claimed.  Since this 
 finding has not been found to be incorrect, it cannot be said that the assessee 
 has either concealed particulars of his income or has furnished inaccurate 
 particulars of income.  Accordingly, the penalty under Section 271 (I)(c) cannot 
 be levied merely because the disallowance has been upheld.? 
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 ITA No.1659/2010 
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 We are, therefore, of the opinion that no substantial question of law 
 arises, hence appeal is dismissed. 
 A.K. SIKRI, J. 
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 SURESH KAIT, J. 
 NOVEMBER 01, 2010 
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 ITA No.1659/2010 
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