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2006 (7) TMI 155 - HC - Income TaxPenalty levied u/s 271(1)(c) - concealment of income and inaccurate particulars - disallowance of loss - falsely claimed deduction of capital loss in the profit and loss account and fraudulently suppressed its closing stock by claiming double deduction in the trading account - HELD THAT:- We found substance in the other arguments of Mr. Patel on this issue. All the facts were disclosed before the authorities. Explanation was offered which has not found favour with the authorities. But simply on that ground penalty under section 271(1)(c) cannot be levied. The Income-tax Officer has rightly not invoked the provisions of Explanation 1 to section 271(1)(c). The burden was not, therefore, on the assessee to discharge. The decision of this court in Sarabhai Chemicals' case [2002 (2) TMI 44 - GUJARAT HIGH COURT] and Explanatory Note on Explanation 1 to section 271(1)(c) would certainly help the assessee's case inasmuch as the explanation offered by the assessee is bona fide and all the facts relating to the explanation of total income have been disclosed by the assessee. We are, therefore, of the view that there is no case of levy of penalty u/s 271(1)(c) of the Act, in relation to the disallowance of loss claimed by the assessee and it is accordingly deleted. We are of the view that the Tribunal has rightly decided this issue. The Tribunal as a matter of fact, found that the double claim for an amount of Rs. 1,00,112 was made due to some bona fide mistake on the part of the assessee. No sooner an entry was made in the trading account of this year, it was to affect the opening stock in the next year, and hence it could have been easily found out and would not have resulted in any advantage to the assessee. We, therefore, confirm the order of the Tribunal on this issue and hold that the penalty relatable to the disallowance of loss of Rs. 1,00,112 is rightly deleted by the Tribunal. In the result, both the questions referred to us at the instance of the assessee as well as the Revenue are answered in favour of the assessee and against the Revenue.
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