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2014 (7) TMI 167 - ITAT DELHIPenalty u/s 271(1)(c) of the Act – Intentional claim of expenses though not allowable – Held that:- The first basis on which the CIT(A) has deleted the penalty and has been upheld by the Tribunal cannot be justified – the material fact has not been rebutted by the revenue that in support of the claimed expenditure there was full disclosure of the expenditure and about its treatment for accounting purposes was made known to the AO by the assesee - The expenditure was related to cost of website maintenance - only there is a definition of short term capital asset in clause (42A) of section 2 which provides that short term capital asset means a capital asset held by an assessee for not more than 36 months immediately preceding the date of transfer - there is nothing on record to suggest that the explanation furnished by the assesee against the claimed expenditure was not bonafide - there was no reason to arrive at the conclusion by the AO that there was concealment of particulars of income or furnishing inaccurate particulars thereof in relation to the claimed expenditure on the part of the assessee to attract penal provision u/s 271(1)(c) of the Act - CIT(A) has rightly deleted the penalty. If the assesee is able to furnish bonafide reason for the claim or the claim made was a debatable issue in view of the provisions of the law in that case penalty u/s 271 (1)(c) is not leviable - Such precaution is being taken within the provision of the law keeping in mind that the action u/s 271(1)(c) of the Act is penal in nature - When an assesee establishes and shows that he had acted bonafidely and all facts and material were disclosed by him, penalty should not be imposed as per clause B to Explanation 1to section 271 (1)(c) of the Act - mere submission of a claim which is incorrect in law would not amount to giving inaccurate particulars of income, hence penalty for concealment cannot be levied on the same. There is no doubt on the genuineness of the claimed expenditure, the only question was the treatment given by the assesee to those expenditure which was a debatable issue and further that there was no allegation that the assesee had not disclosed full facts relating to the claimed expenditure as it was disallowed by the AO only on the basis of those disclosures – the order fo the CIT(A) is upheld – Decided against Revenue.
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