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2018 (6) TMI 54 - AT - Income TaxPenalty u/s 271(1)(c) - payment of retrenchment compensation to employees - Held that:- Assessee initially claimed such amount as revenue expenditure. The Tribunal, vide its order in the second round, has accepted the assessee’s alternate plea for allowing such expenditure as an improvement cost u/s 48 of the Act. It is obvious that the genuineness of payment of retrenchment compensation is not disputed. As against the assessee’s stand of claiming such amount as a revenue expenditure, the Tribunal has adopted another route of allowing such deduction in the computation of capital gain by treating it as cost of improvement. These facts do not warrant imposition of penalty Attributed sale consideration of ₹ 1 lac to building with cost of acquisition at ₹ 70,085/- and computed capital gain at ₹ 29,912/- - Held that:- It is only a case of estimation of sale consideration of super structure. Admittedly, no separate sale consideration of super structure was assigned in the sale deed. Whereas the assessee estimated ₹ 1 lac as sale consideration of building sold, the Assessing Officer estimated the same at ₹ 32.70 lac, which got finally settled by means of appellate order at ₹ 16.35 lac. These facts indicate that penalty is based on mere estimate. As in CIT vs. Aero Traders Pvt. Ltd.[2010 (1) TMI 32 - DELHI HIGH COURT] has held that no penalty u/s 271(1)(c) can be imposed when income is determined on estimate basis - Decided in favour of assessee.
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