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2015 (10) TMI 2055 - HC - Income TaxPenalty u/s 271(1)(c) - dis-allowance under Section 94(7) - purchase of software and treatment of revenue expenditure as capital in nature - incidental expenditure, which was found to be not supported by proof - interest on income tax as assessee has duly debited the amount to its profit and loss account, but it did not add back - Held that:- First one of them falling under Section 94(7) is more or less an error of computation. The second one relates to treatment of software expenditure as 'capital' in nature' instead of revenue as claimed. We deem it appropriate to observe that this is a highly debatable issue of perennial nature. Therefore, the assessee cannot be held to have concealed and furnished inaccurate particulars of income. The third instance of incidental expenditure is a case of 100% dis-allowance instead of that @ 20% already made. This is also a divergence of opinion and does not attract penalty. The fourth dis-allowance admittedly is of interest on income tax. The assessee has duly debited this very amount to its profit and loss account but did not add back. We quote case law of Price Water Coopers P. Ltd. Vs. C.I.T. [2012 (9) TMI 775 - SUPREME COURT] in identical circumstances and hold that this cannot be held to be an instance of concealment and furnishing of inaccurate particulars of income inviting penalty under Section 271(1)(c) - Decided in favour of assessee.
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