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2015 (5) TMI 1205 - ITAT MUMBAIPenalty u/s 271(1)(c) - additions/disallowances while completing the assessment order based on the comments/observation made by the special auditor and C&AG, that the FAA confirmed the additions/disallowances - HELD THAT:- AO had made additions/disallowances on four counts and first among them is about income accrued to the assessee on account of OWK Tunnel Project. The FAA found that because of the dispute going with the Govt. of AP the assessee was not sure as to how much additional compensation would be given to the sub contractor or when it would be paid. In these circumstances if the assessee had showed the income in the year of receipt it cannot be said that it had concealed its particulars of income. It is not the case of the AO that the assessee had not disclosed the fact of ongoing dispute with the AP Govt. or the fact that amount was to be paid to sub -contractor. Income arising from the other projects had been shown by the assessee in the return so there was no justification of invoking the provisions of section 271(1)(c) - As far as the disallowance of certain item and capitalization of those expenses is concerned we are of the opinion that no concealment was involved in those transactions. The assessee had furnished all the details and claimed 100% depreciation as per the advice of the ICAI. The difference of opinion between the assessee and the AO about the allowability of the depreciation cannot and should not lead to levy of concealment penalty. Penalty could not be imposed, as a matter of course. The assessee was truthful in submitting its return and making a claim for depreciation on its understanding of law. This was not a case of claim of depreciation on machinery which was not purchased. Courts are of the view that where basic information has been provided by the assessee then for a claim made by the assessee and disallowed by the AO penalty u/s.271(1) (c)cannot be levied. Here one more thing is to be remembered that the C&AG had dropped the comments made by it about the disputed amounts. Similarly on the issue of as to whether an expenditure is capital or revenue no concealment penalty can be levied. No authority is required to support the view. Making additions or disallowing certain expenses during the assessment proceedings is totally different from invoking penal provisions. There is no provision in the Act of automatic levy of penalty for the additions/disallowances made. Penalty can be levied if it is established that the assessee had not disclosed necessary facts or that the explanation filed by it is not bona fide or plausible. We find that the FAA has given a clear finding of fact that there was no furnishing of inaccurate particulars that the explanation given by the assessee was bonafide. As decided in RELIANCE PETROPRODUCTS PVT. LTD. [2010 (3) TMI 80 - SUPREME COURT] where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under section 271(1)(c) A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars. - Decided in favour of assessee
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