TMI Blog2018 (5) TMI 712X X X X Extracts X X X X X X X X Extracts X X X X ..... as accepted the addition would not automatically lead to the conclusion that it has furnished inaccurate particulars of income. Moreover, the contention of the assessee that considering the huge losses the assessee would not have derived any benefit by wrongly claiming such expenditure stands to reason . No infirmity in the order of the CIT(A) in deleting the penalty - Decided in favour of assessee. - ITA No.6051/Mum/2016 - - - Dated:- 9-5-2018 - Shri Saktijit Dey, JM And Shri Rajesh Kumar, AM For The Appellant : Shri V Vidhyadhar For The Shri Vipul Joshi And Ms Dinkle Hariya ORDER Per Saktijit Dey, Judicial Member The aforesaid appeal has been filed by the department challenging the order dated 30.07.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- was a provision made of such expenditure on which the assessee has not deducted tax at source. Holding that the provision made is contingent in nature the Assessing Officer disallowed the said amount from the expenditure claimed by the assessee and added it back to the total income. On the basis of such additions made, the Assessing Officer initiated proceedings for imposition of penalty u/s. 271(1)(c) of the Act, alleging furnishing of inaccurate particulars and concealment of income. In response to the show cause notice issued u/s. 274 r w s 271(1)(c) of the Act, though the assessee furnished an explanation ascertaining therein there is neither furnishing of inaccurate particulars of income nor concealment of income while claiming dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court in the case of CIT vs. Reliance Petroproducts Private Ltd. 322 ITR 158 (SC), the learned CIT(A) observed, when the information furnished by the assessee was not incorrect or inaccurate, penalty cannot be imposed u/s. 271(1)(c) of the Act on the allegation of furnishing of inaccurate particulars of income. Accordingly, he deleted the penalty imposed. 4. The learned DR relying upon the observations of the Assessing Officer in the penalty order submitted, the assessee being conscious of the fact that the expenditure in relation to which deductions were claimed are in the nature of provisions still claimed them as deduction. He submitted, when the expenditure has not crystallized and was not ascertainable, the claim of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brought forward losses. He submitted, for the very same reason the allegation of the department of furnishing of inaccurate particulars of income will not stand to reason because the assessee would not have derived any benefit, since it was incurring huge losses for which the assessee ultimately had to close down its business activity. The learned AR submitted in the aforesaid circumstances, learned CIT(A) was justified in deleting the penalty imposed. 6. We have considered rival submissions and perused the material on record. Undisputedly, the disallowance made by the Assessing Officer out of advertisement and rent expenses, were shown as provision in the accounts of the assessee. However, it is the claim of the assessee that though th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount as deduction and has also furnished full particulars of such claim. In the course of assessment proceedings, the Assessing Officer holding a different view has disallowed the expenditure. However, the disallowance of expenditure by the Assessing Officer ipso facto will not lead to the conclusion that the assessee has furnished inaccurate particulars of income and concealed its income as held by the Hon ble Supreme Court in the case of CIT vs. Reliance Petroproducts Private Ltd. (supra). In view of the aforesaid, we do not find any infirmity in the order of the CIT(A) in deleting the penalty imposed. Accordingly, we uphold the same by dismissing the grounds raised by the department. 7. In the result, the Department s appeal is dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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