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2012 (7) TMI 9 - AT - Income TaxPenalty under Section 271(1)(c) of the Income Tax Act - disallowance under Section 35D, reduction in exemption under Section 10B and rejection of claim under Section 80HHC – Held that:- Explanation-1 to Section 271(1)(c) gets attracted only when the assessee failed to substantiate its claim to explain or the explanation given by the assessee were found to be false. But when the explanation given by the assessee is simply not accepted by the Revenue, the same cannot be made a ground for levy of penalty. It is a case where the explanation offered by the assessee is not accepted but the same has not been found to be false by any of the authorities. Appeals of the Revenue are dismissed. Penalty in respect of enhancement of book profit - enhancement made by the CIT(A) in the quantum proceedings regarding book profit, but no penalty proceedings had been initiated on the enhancement of the book profit – Held that:- authority, which is adding the income, has to record a satisfaction to the effect that the penalty is required to be levied. In the absence of such satisfaction and any mention of initiation of penalty in the appellate order making enhancement in book profit, penalty is not leviable. No penalty is justified in respect of enhancement of book profit.
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