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2018 (6) TMI 1614 - HC - Income TaxPenalty u/s 271(1)(c) - excessive deduction claimed u/s 10B - additions made in the income on account of alleged excess stock - HELD THAT:- The first reason for which penalty in question was imposed by the Assessing Authority in the present case was on account of the excessive deduction claimed u/s 10B which was set aside by the learned Tribunal, following the decision of this Court in the case of ‘CIT v. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT]. Another ground on which the penalty was imposed by the Assessing Authority was the additions made in the income on account of alleged excess stock, holding which too was set aside by the learned Tribunal vide Paragraph-17 of the impugned order quoted above holding that the said alleged excess stock was not as a result of purchases made outside the books of accounts, but was only on account of wrong entries in the books of accounts and in any case the higher stock in trade declared as closing stock in a particular year would be taken as opening stock at the beginning of the next year and therefore the tax effect of such alleged excess stock is ‘Nil’ and thus it being a tax neutral entry, the learned Tribunal found that there was no concealment on the part of the Assessee, attracting penalty u/s 271(1)(c). We are satisfied that in the facts of the present case before us, since the Tribunal has reiterated the findings of facts that both the additions made to the income of the Assessee having been set aside following the decision of the High Court in the case of Tata Elxsi Ltd., [supra] as far as issue of Section 10B is concerned and on the issue of excess stock being tax neutral, such cogent and reasonable findings of facts returned by the learned Tribunal and consequentially setting aside the penalty u/s 271(1)(c) , does not give rise to any substantial question of law requiring the consideration by this Court u/s 260A.
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