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2017 (10) TMI 938 - AT - Income TaxPenalty u/s 271(1)(c) - allowable business expenditure or capital expenditure - Held that:- We are of the considered view that such an expense was an allowable expense and hence the addition made by the AO was in itself not on right footing. Without prejudice, as the stand of the AO has been upheld by the earlier Ld. CIT(A) while deciding the appeal for the current year, it is evidently clear that the issue is certainly debatable as making distinction between the capital and revenue expenditure itself requires appreciation of full range of facts, which may bring in subjectivity in the matter. Therefore, by no set of standards, two individuals can hold similar views for capital or revenue nature of expenditure. In the case of the assessee, evidently, the stand taken by the AO is in contrast to my stand. Moreover, in the light of various decisions cited above, such a claim cannot be held as capital in nature. It is also a settled law that penalty proceedings are independent assessment proceedings and therefore, merely because the addition made by the AO has been upheld by the Ld. CIT(A), does not imply that the assessee had filed 'inaccurate particulars of income'. We further note that the Tribunal in the case of the assessee for the assessment year 2007-08 title GE Capital Business Process Management Serves Pvt. Ltd. vs. ACIT [2015 (11) TMI 68 - ITAT DELHI] has deleted the quantum addition on account of license fee to the extent of ₹ 2,19,60,467/-. Therefore, we uphold the order of the Ld. CIT(A) of deleting the penalty in dispute and reject the grounds raised by the Revenue. Appeal filed by the Department stand dismissed.
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