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Section 271(1)(c) of Income-tax Act, 1961 - Penalty - For concealment of income Non-declaration of grant-in-aid received by assessee film exhibitor as income, would not attract penalty as it was a capital receipt [In favour of assessee] CIT v. Pramod Kumar Shukla [2009] 312 ITR 223 (All.) The assessee was carrying on the business of exhibition of cinema films. It filed return of income declaring a loss. The Assessing Officer found that the assessee had received grants-in-aid in the form of entertainment tax rebate which should be treated as revenue receipt which was accordingly added to the income of the assessee and accordingly penalty was imposed. Held that in the case of Kalpana Palace v. CIT [2005] 275 ITR 365, it was held that the grant-in-aid received from the State Government by the cinema owners is capital receipt. That being the position, the assessee had rightly not included in its income the grant-in-aid. Consequently, no penalty was exigible. A.N. Mahajan for the Appellant. S.K Garg for the Respondent. JUDGMENT In the present appeal filed under section 260A of the Income-tax Act, 1961, hereinafter referred to as "the Act"), the Revenue has raised the following questions said to be substantial questions of law, which arise out of the order of the Income-tax Appellate Tribunal, Allahabad, dated September 10, 2002. "1. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that there was difference of opinion between the assessee and the Department that grant-in-aid is a capital in nature and not taxable ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in holding that the assessee has not concealed the particulars of its income or has furnished inaccurate particulars of such income ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in cancelling…

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