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2014 (7) TMI 248 - AT - Income TaxPenalty u/s 271(1)(c) of the Act Claim of disallowance not accepted by AO Held that:- The assessee earned dividend income which was claimed as exempt - the assessee furnished all the details relating to the earning of dividend income and the calculation for the disallowance to be made u/s 14A of the Act - it cannot be said that the assessee had concealed income or furnished inaccurate particulars of income - The only basis for levying the penalty u/s 271(1)(c) of the Act was that the claim of the assessee for the disallowance u/s 14A of the Act was not accepted by the AO, so it can at the most be a ground for making the addition but was not sufficient to levy the penalty u/s 271(1)(c) of the Act. Relying upon CIT Vs Reliance Petro Products Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT] - there was a difference of opinion as regards to the working of disallowance u/s 14A of the Act - The assessee disallowed suo-moto a sum of ₹ 16,020/- while the AO worked out the disallowance at ₹ 41,10,546/- which was more the total claim of the expenses at ₹ 32,06,595 - merely on this basis that the claim of the assessee was not accepted by the AO it cannot be said that the assessee either concealed the income or furnished inaccurate particulars of income - CIT(A) was fully justified in deleting the penalty levied by the AO u/s 271(1)(c) of the Act thus, there was no infirmity in the order of the CIT(A) Decided against Revenue.
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