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2012 (12) TMI 602 - AT - Income TaxPenalty u/s 271(1)(c) AO made addition of expense incurred to earn exempt income u/s 14A Impose penalty u/s 271(1)(c) on said addition Held that:- Following the decision in case of Sunash Investment Co.(2006 (12) TMI 266 - ITAT MUMBAI) that no penalty u/s 271(1)(c) can be levied on account of disallowance of pro-rata interest expenditure by invoking the provisions of sec.14A. No contrary view has been brought on record by the learned Departmental Representative. Therefore delete the penalty. Issue decides in favour of assessee Penalty u/s 271(1)(c) - Income voluntarily offered to tax AO included the said amount in the total income and impose penalty u/s 271(1)(c) thereon Held that:- As similar income was offered for taxation in earlier AY on which the AO chose not to impose penalty u/s 271(1)(c). AO could not place any material on record to show that the assessee came forward to offer the said income for taxation only due to his corner in this regard. There is nothing in assessment order to divulge that the assessee offered income pursuant to any detection by the Revenue. Rather it is suo moto offering by the assessee. Issue decides in favour of assessee Penalty u/s 271(1)(c) - Imposed on disallowance of depreciation on the Ozone grant During course of proceedings the assessee surrendered its claim of depreciation on capitalization of grant Held that:- Mere fact that the assessee agreed not to claim depreciation on the amount of Ozone subsidy during the course of assessment proceedings cannot be a good ground for imposition of penalty. The initial view of the assessee that it was entitled to depreciation, based on the judgment of the Honble Supreme Court), can be found fault with. Thus, it cannot be said that the assessee made a mala fide claim in the shape of depreciation on the Ozone grant received from the State Government. Issue decides in favour of assessee
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