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2023 (9) TMI 215 - AT - Income TaxPenalty u/s 271(1)(c) - difference in returned income and assessed income - difference is in view of royalty income not offered to tax in Return of Income which was accepted later in MAP resolution - CIT(A) deleted the penalty - HELD THAT:- We find that the authorities for the purpose of settling the cases under MAP proceeded on assumption that the assessee has PE in India and the business profits earned from those contracts are deemed to be attributed to the assumed PE and taxed in India at 30% of the profits arrived. We observe that even in the MAP proceedings it is only by way of an assumption that the authorities have concluded that the assessee has PE and on such assumption of PE the business profits were attributed to the PE for the purpose of settling the issues. No corroborative evidence is brought on record by the Revenue Authorities to suggest that the assessee has PE in India. Further the CIT(A) in all these assessment years in fact deleted the additions holding that Assessee does not have a PE in India. We also find that the CIT(A) while deleting the penalty levied u/s 271(1)(c) held that the assessee has not concealed any particulars of income and has disclosed all material facts during the assessment as well as MAP proceedings. CIT(A) has considered all the aspects of the material and concluded that the assessee has disclosed all material facts during the assessment as well as MAP proceedings and has not concealed any particulars of income. We see no infirmity in the order passed. We further observe that at best it is only a difference of opinion as to whether there exists PE in India for Assessee or not. There is no conclusive proof that the assessee has PE in India. In the penalty proceedings the AO simply relied on the MAP proceedings in holding that the assessee has PE in India which in fact is not correct. As we said earlier it is only on assumption that the assessee has PE in India and by way of deeming fiction the profits were attributed for such assumed PE by the authorities in the MAP proceedings. Thus we hold that there is no concealment of income or furnishing inaccurate particulars of such income by the assessee in any of these assessment years and thus, we sustain the order of the CIT(A) - Decided against revenue.
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