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2016 (11) TMI 734 - ITAT MUMBAIPenalty u/s 271(1)(c) on disallowance under section 14A - Held that:- Following the decision of the Coordinate Bench of this Tribunal in the assessee’s own case for A.Y. 2000- 01 we also are of the view that the issue of the disallowance under section 14A of the Act is a highly debatable one and it cannot be said that the assessee has concealed any particulars of income. In the light of the above facts and circumstances of the case, we hold that the levy of penalty under section 271(1)(c) of the Act on this issue was not justified and cancel the same - Decided in favour of assessee Penalty on disallowance of non-compete fee paid to ex-Directors - Held that:- Merely because the assessee’s claim for the said expenditure as revenue was turned down in quantum appeal proceedings; that by itself would not be ground enough to reach the conclusion that the particulars furnished/disclosed by the assessee were false, dishonest or inaccurate or that income was concealed. In this factual and legal matrix of the case, we are of the view that penalty under section 271(1)(c) of the Act was not exigible in the case on hand on the issue of the assessee’s claim regarding non-compete fee paid to ex-Directors and cancel the penalty levied thereon. - Decided in favour of assessee Penalty on income from bad debts recovered - Held that:- The reason put forward by the assessee for its action; that since bad debts claimed in this regard had been disallowed by the AO, therefore the assessee had not offered the recovery thereof for tax, in our considered view, is not acceptable as the aforesaid action of the assessee, in not offering the recovery of bad debts to tax, is not in conformity with the mandate of the provisions of section 36 of the Act. It is not the case of the assessee that a legal claim made was disallowed, which is a debatable issue. In respect of recovery on bad debts written off by the assessee, the position in law is clear and unambiguous; the assessee has to offer the same to tax in the year in which the recovery is made. Since the assessee has failed to do, in violation of the mandated provisions of law, we are of the view that action of the authorities below in levying penalty under section 271(1)(c) of the Act, in respect of the assessee’s not offering the recovery of bad debts written off in the facts and circumstances of the case is in order and we uphold and confirm the same. Decided against assessee Penalty on disallowance of employees contribution to PF/ESIC for delayed payment - Held that:- The authorities below have not disputed the averments of the assessee that the PF/ESIC was paid to the government before the due date for filing the return of income under section 139(1) of the Act. The disallowance and consequent levy of penalty by authorities below was for the assessee’s making the said payment of PF/ESIC dues beyond the due dates as per the PF Act and ESIC Act respectively. In the case on hand, the employees contribution to PF/ESCI having been admittedly paid before the due date for filing its return under section 139(1) of the Act, the disallowance made by the authorities below was not called for, as the issue in the case on hand would be covered by the proviso to section 43B of the Act. In this view of the matter, we cancel the penalty levied under section 271(1)(c) - Decided in favour of assessee Penalty on disallowance of donation - Held that:- Admittedly, the assessee has not disallowed this ineligible expenditure while computing its income for the year under consideration. In our view this is a clear case of furnishing of inaccurate particulars of income and therefore uphold the penalty levied under section 271(1)(c) of the Act in this regard. The assessee’s appeal on this issue is rejected. - Decided against assessee
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