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2014 (12) TMI 1160 - AT - Income TaxPenalty u/s 271(1)(c) - assessee has concealed its income by not showing the same u/s 45(1A) in spite of its known facts - CIT(A) deleted the penalty - Held that:- In the present case we find there was no furnishing of inaccurate particulars and concealment of income. The assessee has suffered loss on fire. It was duly disclosed in the Profit and loss account and in the audit report. AO did not allow loss as business loss by referring to provision of section 45(1A) of the Act. On appeal the ld. CIT(A) allowed the loss as business loss. In further appeal ITAT held that the same was not allowable as business loss. From the above we note that the issue was debatable and it cannot be said that the assessee had any malafide intention. It is a settled law that penalty cannot be imposed unless the conduct of the assessee is contumacious. It is also not the case that assessee’s case was a bogus claim which was prima facie liable to be disallowed. The assessee was under bona fide belief that the loss on fire will be allowed as business loss. If the AO does not agree with the assessee and hold that loss cannot be allowed as business loss it cannot lead to a conclusion that the assessee has furnished inaccurate particulars of income or has concealed any income. See CIT vs Reliance Petro products (P) Ltd (2010 (3) TMI 80 - SUPREME COURT) and Hindustan Steel Ltd vs State of Orissa(1969 (8) TMI 31 - SUPREME Court) - Decided in favour of assessee.
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