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2013 (3) TMI 556 - AT - Income TaxPenalty proceedings u/s 271(1)(c) of the Act - Disallowance of differential interest paid on inter corporate deposits - Other disallowances - Assessment U/s 143(3) of the Income Tax Act, 1961 - Held that:- The ld.CIT(A) restricted the disallowance of interest On further appeal by the Revenue to the Tribunal, the Tribunal dismissed the Revenue’s appeal and upheld the order passed by the ld. CIT(A). - The claim of the assessee cannot be considered as false to attract the rigours of penalty u/s 271(1)( c) which is quasi criminal in nature and accordingly deleted the penalty. Following the decision of the the Hon’ble Apex Court in CIT V/s Reliance Petroproducts Pvt. Ltd.(2010 (3) TMI 80 - SUPREME COURT), Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, in our opinion, attract the penalty under section 271(1)(c). In case of every return where the claim made is not accepted by the Assessing Officer for any reason, the assessee will invite penalty under section 271(1)(c). That is clearly not the intendment of the Legislature.” - Decided in favor of assessee.
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