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2013 (8) TMI 997 - AT - Income TaxPenalty levied u/s 271AA - international transaction entered upon by the assessee with its associate concern - Held that:- We are in conformity with the findings of CIT (Appeals) that the order levying penalty under section 271AA of the Act was passed in perfunctory manner without giving requisite show cause notice and without affording proper opportunity to the assessee. Further there is no merit in the levy of penalty under section 271AA of the Act even on the merits of the case as the Inspector deputed to inspect the record of the assessee had given a report that the assessee had maintained requisite documents. No reliance can be placed on the second report of the Inspector as the same was not confronted to the assessee. Even otherwise there is no merit in the levy of penalty under section 271AA of the Act for the default of not maintaining details as per clause (a), (h) and (l) of Form No.10D, which were not maintainable by the assessee. The international transaction entered upon by the assessee with its associate concern has been held to be at arms’ length and as such there is no merit in the levy of penalty under section 271AA of the Act - Decided in favour of assessee.
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