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2017 (11) TMI 857 - AT - Income TaxPenalty u/s. 271(1)(c) - indirect expenses claimed attributable to the unsold plot - Held that:- Indirect expenses incurred by the assessee attributable to unsold plots are genuine business expenses duly incurred by the assessee but the same were under a bonafide belief claimed by the assessee to be expenses of the impugned assessment year which were not allowed by the Revenue as these expenses as per version of Revenue were to be added to the cost of unsold plots of land to be allowed in the year when plots are actually sold as per accounting policy consistently followed by the assessee. In our considered view, the explanation offered by the assessee is a bonafide explanation as to the assessee was under bonafide belief that due to merger and demerger of the plots and their reconstitution, the expenses are to be claimed in the year under consideration , which explanation was however not favourably considered by Revenue which led to additions in quantum assessment which assessee accepted but this is not sufficient to fasten liability to penalty on the assessee u/s 271(1)(c). Thus in the factual matrix of the case no penalty u/s 271(1)(c) is exigible in the instant case as the case of the assessee is duly covered by the ratio of decision of Hon’ble Supreme Court decision in the case of Reliance Petroproducts Private Ltd. (2010 (3) TMI 80 - SUPREME COURT). We, therefore, order deletion of the penalty levied by the AO u/s 271(1)(c) - Appeal of the assessee is allowed.
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