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2016 (8) TMI 863 - AT - Income TaxPenalty under section 271(1)(c) - write off of capital work in progress - Held that:- Assessee has duly disclosed the fact of write off of capital work in progress in the audited financial statements by way of a note and hence, there cannot be any allegation of furnishing of inaccurate particulars. It is not the case that the write off has been found to be bogus. The AO has himself accepted that it was a loss, albeit a capital loss, rather than a revenue loss as claimed by the assessee. In the case of CIT vs. Vamchampigons & Agro Produce (2005 (11) TMI 47 - DELHI High Court ) held that “Assessee having shown the income from sale of debentures as capital gains, penalty under s. 271(l)(c) could not be levied on the basis that the AO has assessed the said income as business income and not as capital gains. The Hon’ble Apex Court in the matter of CIT Vs Reliance Petroproducts Pvt. Ltd [2010 (3) TMI 80 - SUPREME COURT ] held that where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars. In order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. A mere making of claim, which is not sustainable in law, by itself, will not amount to furnishing of inaccurate particulars regarding the income of the assessee. - Decided in favour of assessee.
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