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2022 (8) TMI 1134 - AT - Income TaxPenalty u/s 271(1)(c) - Addition on account of personal expenses of the Directors - HELD THAT:- There was no material dispute regarding facts of the case between the representatives of two sides, i.e., for the assessee and for Revenue. It is not in dispute that the assessee filed revised computation of income/loss, offering the aforesaid amount for addition, in the course of assessment proceedings before the AO. It is also not in dispute that the assessee company had disallowed a part of the expenses as personal expenses of the Directors, in its computation of income, except the aforesaid amount. Addition of the aforesaid amount is based on ad hoc estimation of personal use of car by the Directors of the company. The personal use of the car was estimated in ad hoc manner at the rate of 1/6 of the claim. In the computation of income filed with return of income (loss); the assessee suo motu disallowed 1/6th out of claim of depreciation on car. Thus, Rs.3,07,651/- out of total depreciation claim of Rs.18,45,904/- was suo motu disallowed by the assessee. Further, 1/6th out of interest on car loan, and 1/3 out of telephone expenses were also suo motu disallowed by the assessee in computation of income filed with return of income (loss). The total amount of suo motu disallowance made by the assessee in computation of income filed with return of income, on account of personal use of the Directors of the assessee company is, Rs.4,40,942/- (including the aforesaid amount of Rs.3,07,651/-). However, the assessee made a computational error in not disallowing 1/6th out of expenses on car amounting to aforesaid Rs.1,63,263/- being 1/6th out of motor car expenses. We accept the assessee’s claim in the facts and circumstances of the specific case before us, that this computational error was due to oversight and inadvertent mistake, and that the error was a bonafide one. We are of the view that the present case before us is squarely covered in favour of the assessee and against Revenue by order of Hon’ble Supreme Court in the case to Price Waterhouse Coopers (P.) Ltd. vs. CIT[2012 (9) TMI 775 - SUPREME COURT] Thus inadvertent and bonafide mistake made due to oversight did not amount to furnishing inaccurate particulars of income, or concealment of income. Thus this is not a fit case for levy of penalty u/s 271(1)(c) - Decided in favour of assessee.
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