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2018 (1) TMI 737 - HC - Income TaxPenalty u/s 271(1)(c) - issue of interpretation of the word "payable" appearing in section 40(a)(ia) - Held that:- Some High Courts had taken the view that the expression "payable" did not include the amount paid, while others had taken the view that the expression "payable" included amounts paid during the year. As pointed out above, the Supreme Court finally resolved the controversy in Palam Gas Service case (2017 (5) TMI 242 - SUPREME COURT) by holding that the expression payable included not only the amount which remained payable at the end of the year, but also the amounts paid during the year. Consequently, in our view, when the assessee made the claim, this issue was debatable and, therefore, in so far as the deduction of TDS on amounts paid is concerned, the position is that, while it can be made the subject of disallowance, it cannot form the basis for imposing a penalty. Therefore, on this aspect, the enhancement of the penalty amount by the Commissioner of Income-tax (Appeals) is clearly not justifiable. The respondent-assessee having furnished all the details of its expenditure as well as income in its return, it was up to the authorities to accept his claim or to reject it. But merely because the respondent-assessee had claimed an expenditure which was not accepted by the Revenue, that by itself would not attract the penalty of section 271(1)(c). See Reliance Petroproducts [2010 (3) TMI 80 - SUPREME COURT ] - Decided in favour of assessee
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