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2022 (2) TMI 172 - AT - Income TaxLevy of penalty u/s.271(1)(c) - Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Assessee has disclosed primary facts in respect of various expenditure and income, including exempt income earned for the year. The facts borne out from records further indicate that the assessee has made suo motu disallowance of expenditure relatable to exempt income - Assessing Officer was not satisfied with suo motu disallowance made by the assessee and has invoked Rule 8D of Income Tax Rules, 1962 to determine disallowance of expenses relatable to exempt income u/s.14A. What is clear is that the assessee has disclosed necessary facts in relation to various expenses including expenditure relatable to exempt income for the year and thus, we are of the considered view that mere disallowance of expenditure u/s.14A by invoking Rule 8D of I.T. Rules, 1962 is not a ground to hold that the assessee has furnished inaccurate particulars of income. When the assessee makes a claim of any expenditure, it is for the authorities to accept the claim in the return of income or not, but merely because the assessee had claimed expenditure which was not accepted or was not acceptable to the Revenue, that by itself would not attract penalty u/s.271(1)(c). As decided in RELIANCE PETROPRODUCTS PVT. LTD. [2010 (3) TMI 80 - SUPREME COURT] that merely because claim of assessee was not accepted that by itself would not attract penalty u/s.271(1)(c) of the Income Tax Act, 1961. Also see SHRI S. MARTIN [2019 (1) TMI 91 - ITAT CHENNAI] - Decided in favour of assessee.
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