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2016 (8) TMI 318 - AT - Income TaxPenalty u/s 271(1)(c) - difference in purchases - Held that:- The fate of the quantum assessment proceedings is not before us but even in the penalty proceedings u/s 271(1)(c) of the Act, if the fact-situation establishes non-maintainability of a particular addition, then, to the extent of the levy of penalty, the same can be considered appropriately. In the present case, we find that the explanation of the assessee was very much before the lower authorities and, in fact, assessee had moved an application seeking rectification of mistake u/s 154 of the Act and there is no material on record to negate the assertions put forth by the assessee. Therefore, in view of the fact-situation canvassed by the assessee, we deem it fit and proper to hold that no penalty u/s 271(1)(c) of the Act is leviable with respect to a sum on account of difference in purchases, as such addition is itself unsustainable. However, as fairly put-forth by the learned representative for the assessee, the un-reconciled balance of purchases to the extent of ₹ 75,302/- would be exigible to penalty u/s 271(1)(c) of the Act. Thus, on this aspect the Assessing Officer is directed to rework the amount of penalty u/s 271(1)(c) of the Act. Disallowances of balances written off - Held that:- Disallowances relates to amounts written-off by the assessee which are capital in nature. No doubt, the claim of such write-off is not tenable in the eyes of law but we find that the relevant discussion in the assessment order does not reflect any filing of inaccurate particulars or concealment by the assessee. A mere non-acceptance of a claim made in the return of income by itself does not justify the penal provisions of Sec. 271(1)(c) of the Act. As a consequence, we set-aside the order of CIT(A) on this aspect and direct the Assessing Officer to delete the levy of penalty with respect to the aforesaid addition. Dividend earned by the assessee from Saraswat Co-op. Bank - exemption in terms of Sec. 10(34) denied - Held that:- Every case of a wrong claim cannot invite penalty u/s 271(1)(c) of the Act, especially in the present case where there is no material to suggest any concealment or furnishing of inaccurate particulars of income. In fact, apart from the fact that the exemption has been denied, the discussion in the assessment order does not reveal that the assessee had filed any particulars of income which were found to be wrong or otherwise false. Therefore, following the ratio of the judgment of the Hon'ble Supreme Court in the case of Reliance Petroproducts (P) Ltd,[2010 (3) TMI 80 - SUPREME COURT ] penalty on this aspect of the addition is also directed to be deleted. Appeal decided partly in favour of assessee
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