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2017 (11) TMI 1145 - AT - Income TaxPenalty u/s 271(1)(c) - Reimbursement of expenses paid to agent for collecting FDRs - Held that:- It cannot be held that assessee has furnished any inaccurate particulars of income because as a matter of past practice, assessee has been reimbursing the expenses incurred by the agents for collecting FDRs and the findings given in the quantum side goes to show that disallowance has been made purely on ad-hoc basis which definitely cannot warrant levy of penalty for concealment on the charge of furnishing of inaccurate particulars. There is no material referred in the assessment order that these are bogus or non-genuine payments. Therefore, the ld. CIT (A) has rightly deleted the penalty on this addition. Disallowance out of advertisement and publicity expenses - expenses have been incurred but since they pertain to the earlier years, therefore, disallowance has been made in this year - Held that:- There is no finding that bills for incurring such expenditure too were received in earlier years or expenditure had not been crystallized in this year. Mere disallowance of expense in quantum proceedings does not ipsofacto lead to an inference of charging assessee for furnishing of inaccurate particulars of income and levy penalty thereon in absence of any material brought on record that assessee’s claim in this year lacks bonafide. In any case, such claim of expenditure which otherwise is related to business not claimed in the earlier year albeit in this year cannot fall in the category of furnishing of inaccurate particulars as held by the ld. CIT(A) and, therefore, we uphold the deletion of penalty on this score. Disallowance of amount written off outstanding against M/s Southern Synthetic Limited - Held that:- the assessee has made advance to its subsidiary company, M/s Southern Synthetic Ltd. from time to time for urgent requirement of the said subsidiary company and also on account of its business needs, as the said company was manufacturing certain chemicals which were raw materials for the assessee-company’s product. The amounts were advanced to the subsidiary company with a view to help in production of raw material and manufacturing line of business of the company. In light of such business requirement and commercial expediency; advances were given to the subsidiary company from time to time. Since the subsidiary company got merged with another company and BIFR wrote a letter to this effect and in view of such an event Assessee Company took a business decision that the amount has become irrecoverable in the wake of BIFR order; and therefore, assessee has written off the said advance from its books. Since the advances given by the assessee-company were for the purpose of business and writing off of such advance has been claimed, then it cannot be held that the assessee has furnished inaccurate particulars - Appeal of the Revenue is dismissed.
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