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2016 (7) TMI 662 - AT - Income TaxPenalty u/s 271(1)(c) - whether the assessee firm has discharged its onus by establishing the identity of the creditors who are the partners of the firm, creditworthiness of the creditors / partners and genuineness of the transactions? - Held that:- Where there was no intention on the part of the assessee to conceal income and the assessee had agreed to offer sundry credits which were carried forward from the previous year as income as a measure of purchasing peace, imposition of penalty u/s 271(1)(c) of the Act was not justified. In the instant case also, the assessee had clearly disclosed the reasons on account of which, it agreed to treat the contribution made by the partners towards capital as its income. In our opinion, there was almost a measure to purchase peace. It is not a case where the assessee had furnished inaccurate particulars of its income. Viewed from any angle, in the facts and circumstances of the present case, no penalty u/s 271(1)(c) of the Act for furnishing inaccurate particulars of income can be validly levied in this case. In that view of the matter, impugned penalty cancelled. - Decided in favour of assessee.
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