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2015 (6) TMI 887 - AT - Income TaxPenalty levied by AO u/s. 271(1)(c) - claim of set off of loss relating to Madras Elastomes Ltd. a company under BIFR, which was merged with the assessee company - CIT(A) deleted penalty levy - Held that:- In the instant case the audited profit & loss account, correctly disclosed the profit of the assessee which was set off against the loss incurred by the company under amalgamation. Therefore, the basic element necessary for initiation of proceeding u/sec 271(1)(c) of the Income Tax, 1961 that the assessee has furnished inaccurate particulars of income is conspicuously absent. The only point, in the instant case as per the argument of the Ld. counsel for the assessee was on which the impugned action has been conceived the AO. stated that income disclosed in the return which is based on an expert legal opinion, from the simple fact that the assessee was amalgamated with MEL, there was an error in this respect committed by the assessee, in aid of the legal expert, claiming the set off of loss of the amalgamated company. However, an error is never tantamount to penalty and accordingly the proceedings under section 271(1)(c) of the Act is misconceived in view of the fact that the mistake committed under an expert advice cannot expose the assessee to a charge of the "furnishing of inaccurate particulars of income". See CIT v. Reliance Petroproducts Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT] stating mere disallowance of claim for expenditure by itself would not tantamount to furnishing inaccurate particulars of income and accordingly, in such cases no concealment penalty can be levied on that basis. - Decided in favour of assessee.
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