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2023 (4) TMI 681 - AT - Income TaxPenalty levied u/s 271G - failure to furnish information or documents as required by Sec. 92D(3) in respect of International Transactions - HELD THAT:- TPO arrived at a conclusion that assessee's arguments regarding industry practice and difficulty in maintaining documentation on that account cannot constitute reasonable cause. TPO found the contention of the assessee regarding many varieties of stock and its continuous mixing, resulting in stock losing identity contradictory with the claim that the each has a different price. It was therefore concluded that the assessee has failed to provide any authentic information, data or document in respect of segmental accounts with respect to transactions made with AEs and non-AEs, violating lawful requirement under clauses d, g, h, I and j of Rule 10D(1) r.w.s. 92D and under Rule 10D(3). Penalty was levied at 2% of value of the international transaction. On appeal, the ld CIT(A) observed that although the TPO has rejected the TNMM as MAM in the case, no adjustment to the Arm’s Length Price of the transaction of sale and purchase of Diamonds to the AE has been done. Peculiar facts related to the diamond business pose practical difficulties in maintaining segmental details and the same constitutes a reasonable cause. CIT(A) held that imposition of penalty u/s 271G of the Act is not sustainable under the facts and circumstances as well as under the law. CIT(A) deleted the penalty. As gone through the above order of ld CIT(A) and noted that there is no infirmity in the conclusion reached by ld CIT(A). We decline to interfere with the order of Id. CIT(A) in deleting the aforesaid penalty u/s 271G - Appeal of the Revenue are dismissed.
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