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2018 (6) TMI 1630 - AT - Income TaxPenalty u/s 271(1)(c) - Addition on account of other income and Addition on account of interest expenses - HELD THAT:- So far as the first two additions we have noted that the assessee has, on it’s own, accepted these inadvertent mistakes. The explanation of the assessee about these mistakes, in our considered view, deserves to be accepted. The PMS receipt break up is known only upon receipt of the statement, and, more often than not, PMS receipts are dividend receipts which are tax exempt in nature. Similarly, interest on delayed TDS is an interest payment nevertheless and it cannot be treated as a fake, malafide or patently incorrect claim. In a case in which returned income is ₹ 35.37 Crores, errors of this magnitude cannot be said to deliberate errors with ulterior motives. The amounts are indeed small and explanations of the assessee are quite reasonable. Exchange fluctuation - Assessing Officer himself has accepted the fact that even income was booked on capital account by mistake as a result of wrong posting of capital field vouchers in the revenue account. Certainly, this kind of a casual approach is not desirable but then right now we are only concerned whether the explanation of the assessee is reasonable, and whether meets the test of preponderance of probabilities, or not. Viewed in this perspective, in our considered view, the explanation offered by the assessee is reasonable and worth being accepted. We, therefore, deem it fit and proper to delete the penalty in respect of the addition for exchange fluctuation as well. Claim of depreciation - assessee had purchased the building and land for ₹ 5,93,47,914/- and the stamp duty valuation of land was ₹ 1,10,99,970/-. While there is no building valuation on record, based on the above facts, the building being treated at the value of ₹ 5 crores is not an outright absurd claim as, even after reducing the stamp duty valuation of land, the building value at ₹ 4.83 Crores does seem reasonable from that perspective – even though that is not legally correct, as held by the co-ordinate bench. The fact that building was demolished is a subsequent event, and adopting the stamp duty valuation figures in broad terms may result in disallowance of depreciation but the claim has some basis. Keeping in view of these discussions, in our considered view, the penalty in respect of disallowance of depreciation must also stand deleted. - Decided in favour of assessee.
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