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2015 (5) TMI 41 - ITAT DELHIPenalty u/s 271(1)(c) of Income Tax Act, 1961 - Concealment of particulars of income or furnished inaccurate particulars of income - Claim of non-allowable expenses - Held that:- We have noted that so far as disallowance of long-term capital loss is concerned, the only basis for the said disallowance is an Inspector’s report, but then the Inspector’s report, prima facie, by itself cannot be a reason enough to disregard the sale consideration on the basis of documents on record. While we refrain from making any observation on merits, it is sufficient to say that by no stretch of logic this Inspector’s report can be reasonably and legally sustainable foundation for holding that the assessee concealed any particulars of income or furnished inaccurate particulars of income. Whatever sale consideration has been stated by the assessee is admittedly supported by the sale deed etc. and the Assessing Officer has not even called the same into question. In these circumstances the learned CIT(A) was quite justified in deleting the impugned penalty so far as long term capital loss is concerned. As regards the disallowance of expenditure in respect of car hire charges, it is an undisputed position that the assessee did produce Memorandum of Understanding in support of the claim of expenditure but then the Assessing Officer was swayed by other considerations such as non deduction of tax at source which was wholly irrelevant so far as assessment year 2004-05 was concerned since the provisions of section 40(a)(ia) has been brought to statute w.e.f. 1st April, 2005. Therefore, whether the tax was deducted at source while making payments of car hire charges or not, prima facie, could not have any legally sustainable implications in the disallowance with respect to the expenditure in question. Even on this issue as we refrain from making any observation on merits, we are clearly of the view that the facts on record did not justify or warrant imposition of penalty in respect of this quantum disallowance. Finally as regards the partial disallowance of depreciation on software, it is an undisputed position that all the relevant facts were before the Assessing Officer and incorrectness of the claim, even if that be so, cannot by itself lead to or result in imposition of penalty u/s. 271(1)(c). In view of these observations and also bearing in mind entirety of the case, we are not inclined to disturb the well reasoned findings of the CIT(A). We confirm the same and decline to interfere in the matter. - Decided against the revenue.
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