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2016 (10) TMI 43 - AT - Income TaxPenalty u/s. 271(1)(c) - Addition on Legal and professional charges and Cost of investment written off - Held that:- In the present case the legal and professional fee paid to various professionals was duly disclosed in the books of account and the same have been paid by cheques to the consultants. Tax was also deducted at sources on such payments. The bills of the legal consultants were also produced before the AO. Therefore, there being complete disclosure of these expenditures before the AO, no penalty could be imposed against the assessee on the basis of disallowance of the same, in view of various decisions relied upon by the assessee as noted above. Similarly, regarding the written off investments it is not in dispute that the appellant company purchased shares of Modi Creata Promotion Ltd. during the F.Y. 2001-02, and liquidation of the said company was approved by the High Court. The relevant papers are placed on record. In presence of these circumstances, the entire amount invested, is said to have been written off in the books of account, as the said amount was not expected to be recovered. The factum of investment and its write off was also completely disclosed before the AO in the financial statement furnished by assessee. However, on disallowance of this claim of assessee, it is not justified to hold that the appellant has concealed the particulars of income or has furnished inaccurate particulars of such income entailing penalty u/s. 271(1)(c) of the Act as held in several decisions relied by the assessee. In view of what has been discussed above, we come to the conclusion that the ld. Authorities below are not justified to impose or confirm the penalty against the assessee u/s. 271(1)(c) of the Act. - Decided in favour of assessee.
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