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2017 (9) TMI 642 - ITAT MUMBAIPenalty u/s.271(1)(c) - provision created for impairment in value of investment in security receipts - willfully furnished inaccurate particulars as such provision is not allowable as detection - revised return withdrawing provision created - bonafideness in the claim - Held that:- In the present case on hand, on perusal of the facts available on record, we find that the assessee has created provisions in respect of value in investment in security receipts as per the statutory requirement of RBI guidelines. The assessee being an asset reconstruction company registered with RBI is required to value its security receipts. Accordingly, it has made a provision in its books of accounts towards NAV of security receipts at the end of the financial year as per the rating given by the rating agency. The assessee has filed a revised return withdrawing provision created in respect of impairment in value of investment in security receipts before completion of assessment by the Assessing Officer. Though the assessee has filed revised return withdrawing provision created for impairment in value of investment in security receipts, AO was of the opinion that the assessee has filed revised return after a specific question was asked to justify the expenditure debited in the profit and loss account. We do not find merit in the findings of the AO for the reason that the assessee has filed revised return although after issue of notice u/s.142(1), but much before the date of completion of assessment, therefore, the AO cannot hold that the assessee has filed revised return only after issue of notice u/s.142(1) of the IT Act 1961. Mere making a claim in respect of certain expenditure and disallowance of such expenditure by the AO during the course of assessment proceedings cannot be called as furnishing of inaccurate particulars of income in respect of such income. More so, when assessee has filed revised return voluntarily before completion of assessment withdrawing such provision created / expenditure debited in the profit and loss account. Therefore, we are of the considered view that the AO was incorrect in coming to the conclusion that the assessee has furnished inaccurate particulars of its income which warrants levy of penalty u/s. 271(1)(c) of the Act. - Decided in favour of assessee.
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