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2019 (8) TMI 840 - AT - Income TaxPenalty u/s. 271(1)(c) - disallowances on the reduction on account of reversal of excess billing, coal cost freight issue and addition of the provision of difference in oil stock - revised return of income filed by the assessee company - HELD THAT:- Addition on account of provision for difference in oil stock had been vacated by the CIT(A) while disposing off the quantum appeal of the assessee therefore, the CIT(A) had rightly observed that the issue as regards the levy of penalty under Sec. 271(1)(c) in respect of the said addition does not survive any more. Addition on account of reversal of excess billing as per MERC order we find that as the same had been deleted by the Tribunal while disposing off the quantum appeal of the assessee for the year under consideration viz. Maharashtra State Power Generation Company Ltd. Vs. ACIT, Central -10(1), Mumbai [2017 (3) TMI 1675 - ITAT MUMBAI ], therefore, the penalty imposed by the A.O on the said count will have to meet the same fate and thus stands vacated. Penalty in respect of coal cost freight issue-Bhusaval - We find that in the course of the penalty proceedings as well as the appellate proceedings emanating therefrom before the CIT(A), the assessee had satisfactorily explained that the coal cost freight issue - Bhusaval of ₹ 16,31,85,000/- was an expenditure pertaining to the year under consideration. As a matter of fact, the assessee had in its revised return of income claimed the said amount as an expenditure on the basis of the remarks and report of its statutory auditors. In the backdrop of the aforesaid facts, we are of a strong conviction that the aforesaid claim of expenditure raised by the assessee was based on a bonafide and justified grounds. We are also of a strong conviction that as the issue pertaining to coal cost rate– Bhusaval was never discussed in the assessment order, therefore, the said fact also supports the claim of the assessee that no penalty u/s 271(1)(c) could have been validly levied in its hands in respect of the said issue. Also, we find that the assessee in the course of the penalty proceedings before the A.O, and also in the course of the appellate proceedings before the CIT(A) had satisfactorily explained that the coal cost freight issue-Bhusaval of ₹ 16,31,85,000/- was an expense allowable u/s 37(1), which for the said reason was claimed as a deduction in its revised return of income on the basis of the audit report - no infirmity in the order of the CIT(A) wherein he had rightly vacated the penalty imposed by the A.O u/s 271(1)(c), we uphold the same. - Decided against revenue
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