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2013 (9) TMI 760 - HC - Income TaxPenalty for concealment of income u/s 271(1)(c) of the Income Tax Act - Claim of capital loss as bad debt - In the original return no claim on account of capital or business loss of Rs.98,55,254/- as bad debt written off on account of loan given to DCM International Limited was claimed - It is obvious and crystal clear that the assessee was aware that this claim would be examined by the Assessing Officer and the claim was put forward on the basis that DCM International Limited was a subsidiary company and the loan granted to them was for specific purpose and for the benefit of the holding company – Held that:- Loan in fact was granted and has been also written off. There was no concealment or furnishing of inaccurate facts - Loan unpaid and written off should be either treated as business loss or alternatively as capital loss was rejected – No reason for penalty for concealment can be imposed in the present case. Law does not bar or prohibit an assessee for making a claim, which he believes may be accepted or is plausible. When such a claim is made during the course of regular or scrutiny assessment, liberal view is required to be taken as necessarily the claim is bound to be carefully scrutinized both on facts and in law. Full probe and appraisal is natural and normal. Threat of penalty cannot become a gag and/or haunt an assessee for making a claim which may be erroneous or wrong, when it is made during the course of the assessment proceedings - Law does not bar or prohibit a person from making a claim, when he knows the matter is going to be examined by the Assessing Officer – Decided against the Revenue.
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