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2014 (8) TMI 950 - AT - Income TaxDeduction u/s 80IA - Penalty u/s 271(1)(c) - deduction claimed by the assessee u/s 80IA of the Act came to be reduced due to allocation of additional expenses to Atenolol division - Held that:- AO has not adopted any rational basis for determining the amount of expenses to be allocated to the Atenolol division, but proceeded to allocate the same on adhoc basis estimated at the rate of 10% of each of the expenditure. It is also fact that the AO has not given any finding to the effect that the Assessee has concealed particulars of income or furnished inaccurate particulars of income. - AO has carried out similar exercise of allocating additional amount of expenses and reducing the amount of deduction allowable u/s 80IA in the earlier years also, i.e., in AY 1995-96, 1998-99 and 1999-2000, but did not initiat any penalty proceeding in respect of the above said adjustment. Though the principle of res judicata is not applicable to income tax matters, yet the fact that the AO did not levy penalty in the earlier years in respect of similar kind of adjustments would definitely needs to be taken into account. - CIT(A) was not justified in confirming the penalty levied u/s 271(1)(c) of the Act. Accordingly, we set aside the order of ld. CIT(A) and direct the AO to delete the penalty levied u/s 271(1)(c) - Decided in favour of assessee.
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