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2018 (7) TMI 1684 - ITAT MUMBAIRevenue expenditure or not - expenses on NPA’s - Held that:- Expenses incurred on NPA’s and treated as part of asset in the books of account cannot be treated as revenue expenditure in statement of total income as the same is not meeting the matching principles of accountancy. Penalty u/s 271(1)(c) - Held that:- We find merit in the arguments of the assessee for the reason that mere disallowance of expenses incurred cannot be considered as furnishing inaccurate particulars of such income, when assessee has furnished complete details of expenses and treatment of such expenses in its books of account, by way of notes to account explaining reasons for differential treatment in the books of account and in return of income for the relevant assessment year. We further observe that it is not a case of the Assessing Officer that assessee neither furnished any details of expenses nor explained reasons for giving differential treatment in books of account and return of income filed for the year. He levied penalty only for the reasons that assessee has given differential treatment of expenses in the books of account and in return of income without pointing out how such treatment given by the assessee towards expenses incurred on NPA is not allowable as revenue expenses, which is evident from the fact that the Assessing Officer has never doubted the genuineness of expenses and also not observed that these expenses are not revenue in nature. Additions made by the AO towards disallowance of expenses incurred on loan assets and treated as part of cost of asset and claimed as revenue in nature in statement of total income was only on account of different views taken on same set of facts and, therefore, they could at the most be termed as difference of opinion but nothing to do with concealment of income or furnishing of inaccurate particulars of income. This legal proposition is supported by the decision of Hon’ble Supreme Court in the case of Reliance Petroproducts (2010 (3) TMI 80 - SUPREME COURT), wherein, it was clearly observed that merely because the assessee has claimed the expenditure, which claim was not accepted or not acceptable to the Revenue, that by itself would not attract penalty u/s. 271(1)(c) of the Act
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