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2013 (6) TMI 15 - HC - Income TaxPenalty u/s 271(1)(c) - expenditure incurred on renovation or improvement or repairs on the leasehold premises disallowed - Held that:- The issue raised by the assessee was debatable and capable of two views. The assessee had an arguable case or had taken a bonafide plea. The assessee had given his explanation and categorically and clearly stated the true and full facts in the return itself. He did not try to camouflage or cover up the expenses claimed. It is not uncommon and unusual for an assessee to bonafidely claim a particular expenditure as a revenue deduction and expense but not succeed. Every addition or disallowance made does not justify and mandate levy of penalty for concealment under Section 271(1)(c). Levy of penalty is not an automatic consequence when an addition is made by disallowing an expense and by not accepting the interpretation given by the assessee. Explanation 1 clearly stipulates that the penalty can be imposed when the details furnished by the assessee are found to be incorrect, erroneous and false. Merely making a claim which is held as not sustainable under law should not lead to penalization, when the assessee had furnished full details in the return itself and the claim is a debatable, reasonably plausible or may well have been accepted. See CIT vs. Reliance Petro Product Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT], CIT vs. Dharampal Premchand Ltd. [2010 (9) TMI 155 - DELHI HIGH COURT], CIT Versus SOCIETEX [2012 (7) TMI 664 - DELHI HIGH COURT], Price Water House Coopers Pvt. Ltd v. CIT [2012 (9) TMI 775 - SUPREME COURT] - decided in favour of assessee and held that penalty u/s 271(1)(c) is not justified.
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