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2019 (4) TMI 191 - AT - Income TaxPenalty u/s 271(1)(c) - addition made on account of software expenses - capital or revenue expenses - furnishing of inaccurate particulars of income - assessment order framed u/s 143(3) - HELD THAT:- The assessee has furnished all the particulars of software expenses claimed in the income tax return. As such there was no deliberate act on the part of the assessee to furnish inaccurate particulars of income by claiming software expenses as revenue in nature. Therefore, in our considered view the penalty levied u/s 271(1)(C) is unsustainable in the given facts and circumstances. See M/S SIDHARTHA ENTERPRISES, LUDHIANA [2009 (7) TMI 22 - PUNJAB AND HARYANA HIGH COURT] penalty is imposed only when there is some element of deliberate default and not a mere mistake. The assessee has claimed software expenses under the head “software expenses” as evident from the order of the AO which shows that the software expenses were claimed as revenue in nature under the bonafides belief. Had the intention of the assessee been malafide then it should have claimed the same under any other head to avoid the attention - See KANBAY SOFTWARE INDIA (P) LIMITED. VERSUS DEPUTY COMMISSIONER OF INCOME-TAX. [2009 (4) TMI 499 - ITAT PUNE-A]. Exemption u/s.10A - whether the deduction under section 10A needs to be worked out after setting off the brought forward losses? - gains of the business of an eligible undertaking has to be made independently - HELD THAT:- M/S YOKOGAWA INDIA LTD. [2016 (12) TMI 881 - SUPREME COURT] there remains no ambiguity that the assessee shall work out the deduction u/s 10A from its total income before allowing the brought forward losses. We hold accordingly. Hence the ground of appeal of the assessee is allowed.
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