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2014 (5) TMI 962 - ITAT DELHIImposition of penalty u/s 271(1)(c) of the Act – Proper explanation made - Bad debts written off - Held that:- The address given by the AO in the penalty proceedings is per "M/s Va Tech Escher Wyss Flovel Ltd., 13/1, Mathura Road, Faridabad" and the address as mentioned in the impugned order at column No-4 is "Va Tech Hydra India Pvt. Ltd, 49/5, Mathura Road, Vill-Prithla, Dis.-Palwal, Haryana" accordingly the address having been changed is evident from the record - consistently the assessee has claimed that the amounts which were claimed as written off were actually advances made to its suppliers whose names and particulars numbering -20 in total were provided to the AO - the claim put forth was for bad debts for which the assessee failed to provide any justification the addition was made, it is a fact that the addition was not challenged in the quantum proceedings. Relying upon CIT Vs. Sumangal Overseas [2011 (11) TMI 45 - DELHI HIGH COURT] - The explanation is stated to be bonafide as assessee on facts had no motive to make a wrong claim as the income over the years has remained at Nil- Full particulars were filed and no inaccurate particulars were provided - penalty proceedings and quantum proceedings are separate and distinct - explanation offered in the penalty proceedings has to be considered by the authorities independently in the matrix of the requirements of Section 271(1)(c) - even on merits the bad debt claim could have been allowed as a trading loss – the advances to the creditors have not been held to be sham transactions as they are coming from the earlier years - explanation offered by the assessee in the penalty proceedings is bonafide and deserves to be accepted as it is neither a case of filing of inaccurate particulars and nor is it a case of concealment - Relying upon Reliance Petro Products Ltd. [2010 (3) TMI 80 - SUPREME COURT] - the explanation being bonafide deserves to be accepted and the order is set aside – Decided in favour of Assessee.
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