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2014 (5) TMI 664 - AT - Income TaxPenalty u/s 271(1)(c) of the Act - Disallowance of claim of various expenses – Sharing of expenses - Genuineness of the expenses – Held that:- The quantum additions in penalty proceedings are two separate and distinct proceedings - Penalty cannot be levied for every disallowance made in the assessment order - revenue authorities have not brought anything on record which could prove the non-genuineness of the documents - The expenses payable to M/s. APR Limited were shown separately by the assessee in the profit and loss account and the same has been also discussed by the auditor in the audit report – the assessee has made a claim which was transparent and bona fide - Assessee has not concealed anything in the regard - it cannot be a case of concealment of facts - as far as the filing of inaccurate particulars of income is concerned, assessee was having huge carry forward losses and depreciation and the return was filed at nil income - there cannot be a motive or incentive for the assessee to make any bogus claim in the return of income - The facts show that whatever claim made by the assessee was under good faith and with the advice of the auditors and the employees - assessee has furnished an explanation which has not been found false. Relying upon COMMISSIONER OF INCOME-TAX Versus RELIANCE PETRO PRODUCTS PVT. LTD. [2010 (3) TMI 80 - SUPREME COURT] – the assessee has made a genuine claim of write off with regard to the obsolete items - The fact has been disclosed in the return of income - the assessee has failed to obtain approval from the excise authorities shall not make assessee’s claim as bogus - It was a bonafide claim and no penalty u/s 271(1)(c) can be levied on the bonafide claim made in the return of income - with regard to the disallowance out of the unpaid amount, the claim was also not false claim - The assessee is following mercantile system of accounting where principle of accrual of expenses is allowable - Simply by stating that liability was unascertained, no penalty can be levied on the assessee on the ground - there is no concealment of income or filing of any inaccurate particulars of income which could bring the assessee under the provisions of section 271(1)(c) of the Act - The assessee has huge accumulated losses and depreciation which further strengthen the view that there was no incentive for assessee to make such claims for the benefit of tax – Decided in favour of Assessee.
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