TMI Blog2017 (3) TMI 810X X X X Extracts X X X X X X X X Extracts X X X X ..... ion given in the return of assessee was found to be incorrect or inaccurate. The statement given by the assessee was not found to be factually incorrect hence prima facie assessee could not be held guilty for furnishing inaccurate particulars. Therefore, in this case the claim of the assessee was partly allowed by the CIT(A) and Tribunal has submitted the finding of CIT(A). Therefore, we are of the view that CIT(A) has rightly justified in following the decision of Hon'ble Supreme Court. Whenever there is a debatable issue the penalty cannot be levied. - Decided in favour of assessee. - I.T.A. No. 3372/Mum/2015 - - - Dated:- 6-2-2017 - SHRI DT GARASIA, JM AND SHRI ASHWANI TANEJA, AM For The Appellant : Shri M.C. Omi Ningshen, DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer was of the view that assessee has made a claim for deduction and it has been challenged in appeal. Therefore, once assessee has claimed wrong deduction and it was only disallowed after detection by the Department, if assessment would not have come for scrutiny assessment, assessee could have benefitted by filing inaccurate particulars of income. The assessee took chance with the Department, therefore, assessee has filed inaccurate particulars of income. Therefore, show cause, notice was given. The assessee has taken the contention that assessee has made all the particulars of income and disclosed all the relevant facts and he has not concealed any details. The disallowance or addition has been made because of conceptual difference b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act states that depreciation is allowable onintangible assets owned wholly or partly by the assessee. The CIT(A) has confirmed the addition of 25% treating it as capital in nature. Thus, the Assessing Officer has rightly disallowed the claim of Revenue expenditure on account of management services as they were capital in nature and part of intangible assets as per provisions of Sub-section 1 of Section 32 of the Act. The Hon'ble Supreme Court in the case of Reliance Petroproducts (P) Ltd., 322 ITR 158 (SC) has held that making incorrect claim of expenditure does not constitute furnishing of inaccurate particulars of income. The decision will be applicable only where a claim of deduction was made in bona fide manner and the informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der consideration has followed the decision of Hon'ble Supreme Court in case of Jonus Woodhead and Sons (India) Pvt. Ltd. (supra) and following that decision, 25% of expenditure was treated as capital expenditure and 75% of same as Revenue expenditure. Moreover, whether this kind of expenditure is to be treated as Revenue expenditure or capital expenditure is a debatable issue and when there is a debatable issue, the penalty cannot be levied. Assesse has already disclosed all the expenditure along with filing return, therefore, the judgement in Reliance Petroproducts (P) Ltd. (supra) is applicable to the facts of the case and penalty may be deleted. 6. We have heard the rival contentions of both the parties. The issue is regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Ltd. Vs Assistant Commissioner of Income Tax where in the Hon'ble High Court has relying upon the decision of Reliance Petroproducts (P) Ltd. (supra) has deleted the penalty manner we also find in the case of Director of Income Tax Vs. Administrator of the Estate of Late Mr. E.F. Dinshaw(218 Taxman 125) (Bom) similar view has been taken by the jurisdictional High Court. We also find that in the case of Commissioner of Income Tax Vs. Yahoo India (P.) Ltd. 33 taxmann.com 322 Bombay wherein the Hon'ble High Court has held that whenever there is a debatable issue the penalty cannot be levied. Therefore, we respectfully following the same we are of the view that CIT(A) is justified in deleting the penalty in the result the appeal of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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