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2020 (3) TMI 1168 - ITAT AHMEDABADPenalty levied u/s 271(1)(c) - furnishing inaccurate particulars of income or not? - disallowance/addition on account of gratuity expenses - HELD THAT:- Regarding the claim of the assessee for the gratuity expenses, we note that the auditor in his tax auditor report has clearly mentioned that the impugned expenses are not allowable under the Act. But despite that the assessee did not make any disallowance in the computation of income and also contested for the deduction of the same till the learned CIT-A. It is transpired that there was the disclosure made by the tax auditor in the tax audit report furnished in form 3 CD. Thus it cannot be that the assessee deliberately furnished inaccurate particulars of income. Similarly, the AO got information about the disallowance of the provision for gratuity from the tax audit report only. AO has not carried out any investigation for detecting the claim of the assessee towards the provision for gratuity which was not allowable as deduction. See PRICE WATERHOUSE COOPERS (P.) LTD. VERSUS COMMISSIONER OF INCOME-TAX, KOLKATA - I [2012 (9) TMI 775 - SUPREME COURT] - we hold that the assessee has not furnished any inaccurate particular of income deliberately. Accordingly he cannot be visited with the penalty under section 271(1)(c) of the Act, in the given facts and circumstances. Disallowance of the exhibition expenses under the provisions of section 40(a)(i) r.w.s. 195 - We note that claim of the assessee was not doubted by the authorities below. As such, the assessee has incurred expenses for the purpose of the business but the same was disallowed by virtue of the provisions of section 40(a)(i) r.w.s. 195 - Accordingly the same was deemed as income of the assessee by the operation of law. But the controversy arises whether the assessee has furnished inaccurate particular of income by claiming the deduction on account of exhibition expenses which was disallowed on account of nondeduction of TDS under section 195 - term inaccurate particular has not been defined under the Act. However various court including the Hon’ble Apex court defined the term as the details of claim made are not accurate, not according to the truth, not exact or erroneous. See RELIANCE PETROPRODUCTS PVT. LTD. [2010 (3) TMI 80 - SUPREME COURT] - assessee has not furnished any inaccurate particular of income deliberately. Accordingly he cannot be visited with the penalty under section 271(1)(c) - Decided in favour of assessee.
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