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2014 (7) TMI 134 - AT - Income TaxImposition of penalty u/s 271(1)(c) of the Act Royalty and rent paid u/s 40(a)(ia) of the Act Held that:- The Assessee has paid a sum to Court Receiver as per direction of the High Court for calling bids from the partners for the purpose of fixing royalty and the higher bidder would be appointed agent of Receiver who shall carry on the business of Blood Bank which was being carried on by erstwhile partnership firm - penalty and quantum proceedings are separate and distinct - the provisions of section 194J were not applicable to an individual assessee in respect of payment of royalty - Royalty has been defined in Explanation 2 to section 9(10)(vi) of the Act - mere disallowance of any claim will not make the case fit for levy of penalty Relying upon COMMISSIONER OF INCOME-TAX Versus RELIANCE PETROPRODUCTS PVT. LTD. [2010 (3) TMI 80 - SUPREME COURT] mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of assessee - merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not attract the penalty u/s 271(1)(c) - as the matter has already been restored with respect to disallowance of rent made in quantum proceedings, the penalty imposed by AO has no legs to stand Decided in favour of Assessee.
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