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2020 (4) TMI 655 - ITAT SURATPenalty u/s 271(1)(c) - unexplained cash credit u/s.68 - disallowance of expenses - Merely because the assessee could not substantiated his stand of earning income on account of brokerage charges, the same was treated as cash credit u/s.68 - HELD THAT:- AO had made passive disallowance of expenses, without offering any explanation or justification in the same and has not proved beyond doubt any activity of concealment of income on the part of assessee. AO had made arithmetic disallowance without offering any reason, explanation or decision in this regard, In the order of assessment, AO had not provided any reason for disallowance of expenses not even mentioned his express intention to disallow those expenses, thus penalty on the said reason is not imposable. In the case of DCIT Vs. Kulwant Singh [2019 (4) TMI 1287 - ITAT CHANDIGARH] wherein it has categorically been held that when all the facts with regard to the income were declared in the original return itself, then it cannot be taken as a case of concealment or furnishing of inaccurate particulars of income. Where the satisfaction of the ld.AO while initiating the penalty proceedings u/s.271(1)(c) with regard to filing of inaccurate particulars of income while making claim of brokerage charges and it was not believed by the ld.AO and the ld.AO has considered the same as cash credit income u/s.68 - we find support from the decision of CIT Vs. Reliance Petro Products [2010 (3) TMI 80 - SUPREME COURT] wherein it has categorically been held that “mere making of a claim, which is not sustainable in law by itself will not amount to furnishing inaccurate particulars regarding the income of the assessee and such claim made in the return cannot amount to be inaccurate particulars. - Decided in favour of assessee.
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