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2014 (3) TMI 252 - AT - Income TaxPenalty u/s 271(1)(c) of the Act Disallowance of interest and dividend income u/s 36(1)(vii) of the Act - Disallowance of depreciation on leased assets - Held that:- The issue of allowability of deduction on dividend and interest income earned from the long term finances under section 36(1)(viii) of the Act is a debatable one and there are plethora of decisions that penalty cannot be levied on case where two view possible - merely an addition has been confirmed in the quantum proceedings, the penalty does not become automatically leviable The decision in COMMISSIONER OF INCOME-TAX Versus RELIANCE PETROPRODUCTS PVT. LTD. [2010 (3) TMI 80 - SUPREME COURT] followed when the assessee furnishes all the details of its expenditure as well as its income in the return of income, which details, in themselves, are not found to be inaccurate or nor can be viewed as the concealment of income on its part - It is up to the authorities to accept its claim in the return or not - Mere rejection of claim will not amount to furnishing of inaccurate particulars or concealment of income and hence, no penalty can be levied under section 271(1)(c) of the Act thus, the case of the assessee does not attract the provisions of section 271(1)(c) of the Act and therefore the penalty levied/confirmed on this count stands deleted. With regard to disallowance of depreciation on the sale and lease back transaction has given the relief to the assessee with regard to leasing of assets to Maharashtra Esters and Keytones Pvt. Ltd. and allowed depreciation thus, the penalty on account of the disallowance set aside - Allowability of depreciation on asset given on lease to Konkan Railway Corp. Ltd. and Andhra Pradesh State Electricity Board has been remitted back to the AO and directed to examine the issue of sale and lease back agreement - When the said issue has been restored to the file of the AO, thus, the penalty on this aspect should also be remitted to AO for fresh adjudication - Decided in favour of Assessee.
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