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2022 (3) TMI 212 - AT - Income TaxPenalty u/s 271(1)(c) - Disallowance of business expenditure - HELD THAT:- No doubt assessee is not carrying out any business activity. However, the business of the assessee is not completely wind up by the state government and when assessee has to incur certain expenditure in order to keep the establishment alive we observe that assessee has earned only other income and not earned business income from receipts. Further, we observe that the assessment proceedings and penalty proceedings are two different proceedings we are in agreement with the finding of the Ld.CIT(A) that a particular claim made legitimately in the return of income and not allowed because of provision, the mere disallowance of legitimate claim where the factual matrix has not been suppressed, penalty cannot be leviable. In the given case assessee has brought on record all the relevant information that assessee has not carried out any business activity however it has incurred certain expenditure and claimed the same as allowable under the head “business expenditure”. However, the tax authorities thought it differently and disallowed the same. Merely because tax authorities has not allowed the expenditure claimed by the assessee it is certainly falls within the category of particulars declared by the assessee and the fact are same to the facts of CIT v. Reliance Petro Products (P) Ltd. [2010 (3) TMI 80 - SUPREME COURT] Therefore, we are in agreement with the finding of the Ld.CIT(A), accordingly, we do not see any infirmity with the decision of the Ld.CIT(A). Accordingly, ground raised by the revenue is dismissed.
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