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2014 (9) TMI 761 - HC - Income TaxDeletion of penalty u/s 271(1)(c) – Technical knowhow expenses disallowed u/s 35AB – Expenses revenue or not u/s 37(1) – Held that:- The assessee in its books of account had considered technical knowhow expenditure as deferred revenue expenses as for the purpose of accounting, the expenditure in question was likely to benefit in future - But, in the return of income had claimed the technical knowhow license fees as revenue expenses - In the computation of income also, it had disclosed the accounting treatment given to the said item by way of a separate note - when the claim of expenses under the general provision was questioned, it changed such claim under the provision of Section 35AB and such change during the course of assessment proceedings is permissible under the law - so far as levy of penalty for concealment of the income u/s 271(1)(c) is concerned, the Tribunal has noted that in terms of provisions of Explanation 1 to Section 271(1)(c) of the Act, if an explanation comes forth from the assessee, or if any explanation given is found to be false, or is not able to sustain the explanation and is also not able to prove that the explanation is bona fide, the addition made tantamount to concealment of particular of income - the penalty proceedings are separate from those of the assessment proceedings and confirmation of additions may not be the sole ground for confirming the penalty, the Tribunal held that all the details were already before the AO and it would not be plausible to hold that the assessee had concealed any income – the order of the Tribunal is upheld – Decided against revenue.
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