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2016 (5) TMI 689 - AT - Income TaxPenalty u/s 271(1)(c) - disallowance of stock written off - Held that:- The impugned disallowance of stock written off finds its origination from the books of account, as the assessee which is maintaining regular books of account with complete quantitative details, figured out certain slow moving items depicted at pages 31 to 34 of the paper book having a list of 79 items which are mainly related to computer hard-wares and the same were categorized under list of items not moving for a long time due to change in technology and other wear and tear and the total of these items at ₹ 13,59,000/- were specifically debited to profit and loss account. Certainly this action of assessee cannot be categorized as furnishing of inaccurate particulars of income or concealment of income because the same have been carried out in the normal course of business and when this entry was made by assessee it was in the firm belief that all these items which are slow moving and having no present market value, needs to be cleared off from the inventory, so that inventory is appearing on the last date of the financial year is backed up by correct value. It is true that assessee has been unable to give any explanation that why earmarked slow moving items do not have any scrap value but this cannot be a basis for which penalty u/s 271(1)(c) of the Act can be imposed. We are, therefore, of the view that assessee should not be visited with penalty u/s 271(1)(c) of the Act for the addition confirmed upto the stage of Tribunal for disallowance of stock written off - Decided in favour of assessee Disallowance of selling and distribution expenses towards Mizoram-e-governance project - Held that:- , in the given appeal relating to imposition of penalty u/s 271(1)(c) of the Act, we observe that no such effort has been made on the part of Revenue to get the information from Mr. Larsingh M (proprietor of NEITCS) and also no other efforts were made to take information about the bank account in which the impugned payment was credited. Assessee has already lost in appeal on quantum addition but as far as penalty u/s 271(1)(c) of the Act, we are of the view that details of types of services provided to assessee were clearly mentioned in the bills issued by Larsingh M, payments were made by account payee demand draft and above all there was a corresponding income by way of collection on gross revenue of approximate ₹ 2 crores from Mizoram-egovernance project and looking to the facts that no efforts were made by the Revenue to extract necessary information, certainly in such circumstances, assessee should not be visited with penalty u/s 271(1)(c) of the Act. - Decided in favour of assessee
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