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2010 (9) TMI 676 - AT - Income TaxPenalty - Deduction u/s 80HH and 80 I - When a legal claim is made by the assessee, it is obviously open to the Assessing Officer to accept or reject the interpretation canvassed by the assessee, but then it does not follow that when the claim is rejected, it would imply that there has been a concealment of income on the part of the assessee - The deeming fiction under section 271(1)(c) only shifts the onus of proof on the assessee, as this Explanation itself provides that a penalty can only be imposed (a) when there is no explanation by the assessee, (b) when the explanation given by the assessee is found to be false, and (c) when the assessee provides an Explanation which he fails to substantiate and he fails to prove that the explanation was bonafide and that all the facts necessary for the same and material for computation of income have been duly disclosed by the assessee - It is not a frivolous, absurd or patently inadmissible claim that has been made by the assessee - Decided in the favour of the assessee Regarding royalty - No justification has been given, save and except for the stand that the accounts of the assessee were duly audited and the provision can not thus be said to be devoid of any basis, for the claim of deduction - The Assessing Officer will examine this aspect of the matter and quantify the penalty correctly in the light of the amount so worked out - Decided against the assessee
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