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2014 (8) TMI 1172 - AT - Income TaxPenalty levied u/s 271(1)(c) - bonafide claim - disallowance of assessee’s claim of brought forwarded expense by the AO - assessee had furnished inaccurate particulars of income or had concealed its income - HELD THAT:- In the quantum appeal proceedings, the AO had allowed the work in progress to be capitalized during the earlier assessment years. In none of the earlier assessment years, the AO had computed the income of the assessee under the percentage completion method. Under such circumstances, it cannot be said that the assessee’s claim was not bonafide. The computation adopted by the assessee was according to one of the possible views/methods of accounting, which though was not accepted by the AO and further by the Tribunal, but was held to be justified by the CIT(A) in quantum assessment/appellate proceedings. Merely because the accounting method of the assessee was not accepted by the AO or that the claim of brought forwarded expenses was disallowed because of the peculiar fact that no construction activity could be carried out by the assessee during the past years, that itself, ipso facto, cannot be a ground in holding that the assessee had furnished inaccurate particulars of income or had concealed its income - It is not a fit case for levy of penalty and accordingly the penalty levied by the lower authorities is hereby set aside. - Decided in favour of assessee.
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