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2016 (3) TMI 921 - ITAT DELHIPenalty levied u/s 271(1)(c) - addition made u/s 35(2) alleging that assessing knowingly and consciously has made an excess claim of deduction u/s 35(2) in spite of the fact that the R & D unit at Chennai was not approve by DSIR - Held that:- Adverting to the facts of this case, we find that the assessee has neither concealed the particulars of income nor has furnished inaccurate particulars of income warranting levy of penalty u/s 271(1)(c) of the Act in respect of this amount of ₹ 26,53,420/. Penalty proceedings operate in a different sphere because different parameters apply for levy or non-levy of penalty in contrast to the quantum additions which operate in an entirely different sphere. In case any legal or valid claim is made, which is not found to be correct by the authorities, it would not automatically lead to levy of penalty as discussed above. It is not a case where the assessee has not disclosed full and final facts rather assessee has claimed deduction u/s 35(2) of the Act. The ld.AR has relied on numerous decisions in support of his contention. The case of the Revenue is that this is a clear case of furnishing inaccurate particulars of income which the assessee has done with the aim to evade payment of tax. Before we discuss the cases relied on by the parties, we would like to mention that the assessee has made a full and true disclosure of income and has made a claim for deduction. Hence, the assessee has made a bonafide legal claim which cannot be said to be fallacious or flippant and malafide. This fact has not been disputed by the Revenue. Be that as it may, we are of the considered opinion that in case a valid claim based on law is made by the assessee after disclosing full and true facts, and the same is rejected and addition is made qua that amount, it would not tantamount to either concealment of income or furnishing of inaccurate particulars of income automatically - Decided in favour of assessee
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