IN THE HIGH COURT OF DELHI AT NEW DELHI 
 . 
         ITA 92/2010  
 . 
 COMMISSIONER OF INCOME TAX                   ..... Appellant 
 Through: Mr Sanjeev Sabharwal 
 . 
 versus 
 . 
 MAHALAXMI SUGAR MILLS CO LTD             ..... Respondent 
 Through: None 
 . 
 . 
 CORAM: 
 HON'BLE MR. JUSTICE BADAR DURREZ AHMED 
 HON'BLE MR. JUSTICE SIDDHARTH MRIDUL 
 . 
 O R D E R 
                             09.02.2010 
 This is an appeal from the order dated 17.07.2009 passed by the Income- 
 tax Appellate Tribunal in ITA No.1484/Del/2007 pertaining to the assessment year 
 2001-02.  The only issue that is sought to be raised before us by the revenue is 
 that the Tribunal erred in deleting the penalty of Rs 1,51,80,699/- which was 
 chargeable to tax under Section 41(1) of the Income-tax Act, 1961 as remission 
 of liability.  This remission / cessation of liability was shown in the accounts 
 as lease rentals payable to IFCI.  It was pointed out that the liability ceased 
 to exist on account of a settlement with IFCI under which the leased asset was 
 purchased by the assessee.  It was pointed out by the assessee before the 
 Tribunal that all the facts with regard to the lease of the machinery, dispute 
 with IFCI and its settlement out of court, were furnished to the Assessing 
 Officer and there was no question of any non-disclosure and, therefore, penalty 
 ought not to have been levied. 
 . 
 . 
 The Tribunal, after examining the rival contentions on this aspect of the 
 matter, found that the issue regarding computation of the profit under Section 
 41(1) was rather complex and its final determination rested on fixing the cost 
 of acquisition of the asset.  The Tribunal found that the assessee had furnished 
 complete facts with regard to the lease agreement entered into with the IFCI as 
 well as the details with regard to the dispute and the ultimate settlement 
 arrived at with IFCI.  The Tribunal, therefore, came to the conclusion that it 
 cannot be said that any inaccurate particulars of income were furnished in 
 respect of computation of profit under Section 41(1).  The Tribunal also took 
 the view that there could be two possible interpretations and the assessee chose 
 one of them while the lower authorities chose the other.  In such circumstances, 
 the Tribunal came to the conclusion that the explanation furnished by the 
 assessee was bona fide and that it could not be said that the assessee had not 
 furnished complete and / or inaccurate particulars.  Consequently, the Tribunal 
 deleted the penalty. 
 We have heard the counsel for the revenue as well as examined the order of 
 the Tribunal and we find that the Tribunal has arrived at the above conclusions 
 on an appreciation of facts.  We see no reason to interfere with the same as no 
 perversity was pointed out.  No substantial question of law arises for our 
 consideration. 
 The appeal is dismissed. 
 BADAR DURREZ AHMED, J 
 . 
 . 
 . 
 . 
 SIDDHARTH MRIDUL, J 
 FEBRUARY 09, 2010 
 dutt 
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