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2013 (4) TMI 656 - ITAT DELHIPenalty u/s 271(1)(c) - assessee has claimed depreciation on technical know-how of @ 25% & as observed by AO that technical know-how fees was to be allowed u/s. 35AB deduction was to be allowed in six equal installments - CIT(A) deleted the penalty levy - Held that:- CIT(A) is correct in observing that the claim of the assessee for depreciation on account of payment of third installment of technical know-how was bonafide viewed in the context of history of the assessee's case on the issue. It was with respect of the third installments which was paid during the financial year 1991-92 that the assessee capitalized the amount of Rs. 1,78,61,880/- to the plant and machinery being technical know-how fees treating the same as pre-operative expenses. AO however, on perusal of the details filed observed that Section 35AB was specific provision for allowability of expenditure on acquisition of know-how. Therefore, the deduction was required to be given by spreading it equal of six years. Thus, it is clear that the assessee has made the claim for payment of technical know-how under the bonafide belief that its claim for payment of third installment was also allowable as deduction on the same basis as in the previous year. Thus, the assessee cannot be held guilty of furnishing of inaccurate particulars or concealment of income in this case. See CIT vs. Reliance Petro Products Ltd. [2010 (3) TMI 80 - SUPREME COURT], Dilip N. Shroff Versus Joint Commissioner of Income-tax And Another [2007 (5) TMI 198 - SUPREME Court] wherein held that mensrea was a essential requirement of penalty u/s 271(1)(c). Also see Hindustan Steel vs. State of Orissa [1969 (8) TMI 31 - SUPREME Court] - In favour of assessee.
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