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2017 (11) TMI 1540 - AT - Income TaxPenalty u/s 271(1)(c) - disallowance of bad debts - Held that:- It is undisputed that the debts had been written off by the assessee. There is only a difference of opinion between the assessee and the AO as to whether the write off was permissible or not. The assessee has taken a legally acceptable stand and the AO has not brought any adverse evidence on record to establish that the debts had actually not become bad. AO has only drawn inference from running accounts of the debtors that given the circumstances, the debts could not have become bad. However, this is not permissible under the amended provision of section 36(vii).Moreover, it is not a case of dispute in quantum of disallowance but a dispute relating to the sustenance of penalty. The AO has imposed penalty for furnishing inaccurate particulars. In the instant case, it cannot be said that the assessee had withheld any relevant information regarding bad debts written off from the AO. With regard to the provisions of section 271 (1) (c) of the Act pertaining to penalty, the Hon’ble Apex court in CIT versus Reliance Petroproducts (P) Ltd (2010 (3) TMI 80 - SUPREME COURT ) has laid down that making of a claim by the assessee which is not sustainable will not amount to furnishing inaccurate particulars. - Decided in favour of assessee.
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