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2016 (4) TMI 748 - AT - Income TaxPenalty u/s 271(1)(c) - Held that:- The assessee has charged the affiliate fees from the licensee for the rights granted in the agreement. As per the jurisprudence, rights and obligation go together. If a person has a right, it also has obligation to discharge. A right without corresponding obligation does not exist. Merely because the right has been granted to the affiliate under the agreement, the licensee, the assessee cannot shy to discharge his obligation under the agreement which are required to fulfill during the term of agreement In the light of the above, the decision of the Tribunal in the quantum appeal is one possible view which was taken. Whereas the other possible view could also be taken by the Tribunal, as mentioned above. Thus the treatment of the advance license fee in the assessment year or that of the three subsequent year, is vexed point and is highly debatable. We find force in the assessee’s advocate’s argument that the claim of the assessee is bonafide and there is no revenue loss to the department. From the above, it is established that since the claim is bonafide and is also debatable and there is no concealment of income, therefore, in view of the decision of Hon’ble Supreme Court in the matter of CIT vs. Reliance Petroproducts (2010 (3) TMI 80 - SUPREME COURT) and also in accordance with the judgment passed in the case of CIT vs. H.M.A. Udyog Pvt. Ltd., [2006 (8) TMI 595 - DELHI HIGH COURT], wherein it has been held that in a case where the issue is debatable, no penalty under section 271(1)(c) of the Act is permissible. In the above said back ground, we are of the view that that the assessee has not furnished inaccurate particulars of income or concealed the income and there are no finding of the AO and the ld. CIT (A) that the details furnished in the return are inaccurate or erroneous or false. In these facts and circumstances, in our view, the penalty is totally unwarranted and deserves to be deleted - Decided in favour of assessee.
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