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2016 (7) TMI 29 - AT - Income TaxPenalty u/s 271(1)(c) - disallowance of expenditure spent on laying of cables for 950 KVA transformer as revenue expenditure - Held that:- As at the time when the expenditure of ₹ 959886/- was booked in the books as revenue expenditure the assessee was having certain belief which was duly supported with the agreement with DGVCL evidencing that the ownership and liberty regarding the use of transformer for supply of electricity to other consumers will rest upon the DGVCL only and, therefore, cost of laying of cables attached to the Transformer was treated as revenue expenditure. Certainly in such a situation when both the possible views i.e. revenue or capital expenditure are going side by side and there remains a thin line to differentiate the same. Also dispute is not in regard to the quantum of expenditure but it is with regard to nature i.e. capital/revenue. Even if ld. Assessing Officer has treated the amount of ₹ 9,59,886/- as capital expenditure, certainly assessee will be entitled to claim depreciation but the crux is, it is allowable expenditure. Such situation certainly does not call for a penalty u/s 271(1)(c) of the Act. So, assessee cannot be held for furnishing inaccurate particulars. - Decided in favour of assessee
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