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2015 (3) TMI 978 - AT - Income TaxPenalty under section 271(1)(c) - AO arrived at a conclusion that the actual profit of the assessee is worked at ₹ 4,21,71,890 instead of its group of companies and, accordingly, treated the difference of ₹ 1,64,98,954 (Rs. 42,12,71,890 - ₹ 2,56,72,936 (as admitted by the assessee in its return of income)) as inflated expenditure - Held that:- The Assessing Officer, while framing the assessment order, as pointed out earlier, assumed wrongly that the rough working of the tax payable in respect of each group companies instead of group of companies which attributed the initiation of penalty proceedings and subsequent levy of penalty of ₹ 49.49 lakhs under section 271(1)(c) of the Act. Taking the facts and circumstances of the issue we are of the view that the Assessing Officer was not justified in levy of penalty of ₹ 49.49 lakhs under section 271(1)(c) of the Act based on the wrong assumption that the tax payable was in respect of the assessee alone. In substance, the penalty imposed under section 271(1)(c) of the Act is cancelled. - Decided in favour of assessee.
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