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2016 (10) TMI 536 - AT - Income TaxPenalty under section 271(1)(c) - Non deduction of tds u/s 195 - Held that:- The explanation furnished by the assessee in support of its claim of non-deduction of tax at source, though, has not been found correct, however, same was not malafide. According to the assessee, the payment of ₹ 4,43,363/- paid to an entity M/s. Coperion Werner & Pfleiderer was covered under Article-7 of the DTAA with Germany whereas the Tribunal has held that the Article-7 was not applicable in the case of the assessee. Similarly, in respect of payment of ₹ 4,44,690/- to Dr. UK Thiele, the assessee claimed that the payment was towards independent scientific activity which fall under Article 14 of DTAA with Germany, whereas the Tribunal held that the assessee failed to demonstrate that the services rendered by Dr UK Thiele are independent scientific services. The Assessing Officer has nowhere stated that the assessee has furnished false and fabricated bills or claimed expenditure which was not related to the business of the assessee. The Hon’ble Supreme Court in the case of CIT Vs. Reliance Petroproducts Private Limited [2010 (3) TMI 80 - SUPREME COURT] has observed that making an incorrect claim in law cannot tantamount to furnishing of inaccurate particulars. The assessee has given an explanation which is found to be bonafide, thus, in our opinion the Explanation -1 to the section 271(1)(c) of the Act is not attracted in the case of the assessee and, therefore, no penalty is leviable. Disallowance of long-term capital gain - Authorized Representative submitted that the long-term capital gain (LTCG) was claimed as exempt by the assessee at the time of filing the return, inasmuch as, the assessee was of bonafide view that STT would be paid in the due course once the BSE would get the issue clarified from the CBDT - Held that:- Since the assessee failed to get the same clarified until the last date of revision of return of income i.e. 31/03/2008, the assessee during the course of assessment proceeding, without any show cause notice issued by the Assessing Officer, offered the long-term capital gain (LTCG) for taxation which was accepted by the Assessing Officer and he adjusted long-term capital loss (LTCL) from the long-term capital gain (LTCG) so offered. This explanation offered by the assessee has not been found false by the Assessing Officer. Further, the assessee substantiated the explanation with necessary evidence and explanation filed is bonafide and all the facts relating to the explanation and material to the computation of income on the issue have been disclosed by the assessee. In view of these facts, the Explanation-1 to the section 271(1)(c) of the Act is not attracted in the case of the assessee. We may like to repeat the findings of the Hon’ble Supreme Court in the case of Reliance Petroproducts Pvt. Ltd. (supra) that making an incorrect claim in law cannot tantamount to furnish of inaccurate particulars. Thus, in our opinion, in such circumstances no penalty under section 271(1)(c) of the Act is leviable on the issue in dispute. Revenue appeal dismissed.
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