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2014 (8) TMI 68 - AT - Income TaxPenalty u/s 271(1)(c) – Legal expenses disallowed – Expenses personal in nature or not – Held that:- The deduction claimed by the assessee on account of legal expenses was disallowed by the AO in both the years by treating the said expenses as of personal nature – assessee contended that similar legal expenses incurred has been capitalized in the subsequent years after having come to know about the disallowance made in the years which again goes to show the bonafide of the assessee - all the material particulars relevant to the claim made by the assessee were fully and truly furnished by the assessee - the legal expenses claimed by the assessee were actually incurred by him – Relying upon COMMISSIONER OF INCOME-TAX Versus RELIANCE PETROPRODUCTS PVT. LTD. [2010 (3) TMI 80 - SUPREME COURT] - where there is no finding that the particulars furnished by the assessee in its return are in-accurate or erroneous or false, there is no question of imposing penalty u/s 271(1)(c) of the act merely because the claim of the assessee for deduction is disallowed in the quantum proceeding – thus, it is not a fit case to impose penalty u/s 271(1)(c) of the Act and the CIT(A) is not justified in confirming the penalties imposed by the AO for both the years – Decided in favour of Assessee.
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