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2019 (7) TMI 740 - AT - Income TaxPenalty u/s 271(1)(c) - transfer of assets and liabilities of the proprietary concern to the company - addition sustained by denying the exemption u/s 47(xiv) to the extent of self-generated Goodwill - HELD THAT:- We find from the materials available on record that all these facts were duly reflected in the return of income itself by the assessee and subsequently during the course of assessment proceedings. Ultimately it is only disallowance of claim of exemption u/s 47(xiv) of the Act made by the ld AO. All the details necessary for assessment were very much available in the return of income itself and the entire facts of proprietory concern getting converted into public limited company were made known to the department. There was no detection as such by the ld AO in this regard. There was absolutely no malafide on the part of the assessee in making the claim of exemption u/s 47(xiv) of the Act as could be seen from the findings rendered hereinabove. We find that the decision that would be applicable to the facts of the instant case would be the decision of Reliance Petroproducts Ltd [2010 (3) TMI 80 - SUPREME COURT] wherein it was held that when no information given in the return was found to be incorrect or inaccurate or the details supplied by the assessee was found to be factually incorrect, then primafacie, the assessee cannot be held guilty of furnishing inaccurate particulars. It may at best result in making incorrect claim in law. By any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars. It held that merely because a claim made by the assessee is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Accordingly we hold that the CIT-A had rightly deleted the penalty in respect of denial of exemption u/s 47(xiv) on self –generated Goodwill portion partially. Accordingly, we do not find any infirmity in the order of the CIT-A. Penalty u/s 271(1) (c) - denial of deduction u/s 54 - AR argued that it was a bonafide belief on the part of the assessee that since the last payment for purchase of new house was made within the prescribed limitation period by the assessee i.e within one year prior to the date of transfer , he was entitled to claim deduction u/s 54 - HELD THAT:- Assessee's claim was partially negated by the order of this tribunal in quantum proceedings. But this does not mean, that the assessee had furnished inaccurate particulars. It is a genuine difference of opinion on the facts already available on record between the assessee and the AO. There was no detection by the AO on any fresh facts in this regard. All the details were already available with him on record. The assessee did not have any malafide intention to furnish any inaccurate particulars thereon. AO was able to justify his rejection of claim of deduction u/s 54 of the Act only from the details filed by the assessee with regard to the agreement entered for new house on 26.5.2006 and payments made thereon on various dates. Hence it is only a simple disallowance of claim of deduction u/s 54 of the Act by the ld AO. The findings given by us in respect of penalty on self-generated Goodwill hereinabove would hold good for this issue also and the same are not reiterated for the sake of brevity herein. Accordingly, we hold that the ld CITA had rightly deleted the penalty - Revenue appeal dismissed.
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