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2012 (7) TMI 528 - ITAT DELHIChallenging a penalty levied u/s 271(1)(c ) - disallowance and consequential addition made to the total income in respect of Non- saleable/Damaged Stock written off in the Profit & Loss account - Held that:- Assessee during the course of penalty proceedings has given details of stock written off, the addition was confirmed on the ground that the assessee had not given the details of the stock written off. The un-saleable goods have been written off in the books of account. The entries made in the books of account by the assessee are bona fide and cannot be said to be furnishing of inaccurate particulars of his income. The assessee has written off various items because those products could not be sold in the market being hazardous to the health. Moreover, the assessee was exporter of the goods, the profit there from would have been exempt under sec. 10B of the Act. Therefore, no motive can be attached to prove that the assessee by writing off of the stock wanted to reduce the tax liability. The quantum addition has been upheld upto Tribunal but it would not mean that penalty should be imposed automatically - Therefore it is not a fit case for levy of penalty - the character of this written off loss was nothing but basically a provision for decrease in the value of assessee’s assets. The AO while completing the assessment has not mentioned a word that there was furnishing of inaccurate particulars or concealment of income - in fvaour of assessee.
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