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2023 (9) TMI 889 - ITAT DELHILevy of penalty u/s. 271 (1)(c) - While scrutinizing return of income the AO accepted the commission received on providing accommodation entries but disallowed 25% of the expenses claimed by the assessee for want of evidences - HELD THAT:- AO has initiated the penalty proceedings for concealment of income and while levying the penalty the AO has levied it for furnishing the inaccurate particulars of income. This shows that the AO was not certain under which limb of section 271 (1)(c) the penalty was levied. Secondly if the AO was of the opinion that the assessee is engaged in a clandestine business then he ought not to have allowed 75% of the expenses and instead should have disallowed the entire expenditure. The action of the AO shows that he was satisfied with the genuineness of 75% of the expenses and levied the penalty on the balance amount disallowed. We are of the considered view that the captioned cases are not fit for levy of penalty u/s. 271 (1)(c) therefore, the AO is directed to delete the impugned penalty. Appeals of the assessee are allowed.
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