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2019 (6) TMI 41 - AT - Income TaxPenalty u/s 271(1)(c) - defective notice - non specification of charge - allowable deduction either as a business loss or a capital loss? - HELD THAT:- AO has not pointed out any furnishing of inaccurate particulars by the assessee. He simply arrived at the conclusion that the advance written off cannot be allowed as expense in the profit & loss account. Thus, in the whole body of the order, no satisfaction has been recorded for initiating penalty proceedings. Only at the end of the computation of income, the Assessing Officer has recorded “Keeping in view the facts of the case, I am satisfied that it warrants the initiation of penalty proceedings u/s 271(1)(c) of the I.T. Act”. Thus, no specific charge is specified either in the assessment order or in the penalty notices. On these facts, the decision of Hon’ble Karnataka High Court in the case of Manjunatha Cotton and Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT] would be squarely applicable. The assessee filed the return declaring loss of ₹ 354.34 crores. Even the Assessing Officer allowed the carry forward of long term capital loss of ₹ 350.31 crores. The Revenue authorities have not doubted the correctness of the assessee’s claim that it suffered the loss of ₹ 5 crores. Meaning thereby, the genuineness of loss is not in dispute. The only dispute was whether it is an allowable deduction either as a business loss or a capital loss. The assessee’s claim is not accepted by the Revenue. However, on these facts, we do not find any justification to arrive at the conclusion that the loss claimed by the assessee was mala fide. See RELIANCE PETROPRODUCTS PVT. LTD. [2010 (3) TMI 80 - SUPREME COURT] - Decided in favour of assessee.
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