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2017 (4) TMI 822 - AT - Income TaxPenalty u/s 271(1)(c) - addition on remission/cessation of liability as per the provisions of section 41(1)(a) - Held that:- In case of Asstt. IT., Cirle-2, Gurgaon Versus Shri Shailesh Mital [2014 (1) TMI 1303 - ITAT DELHI] on similar and identical issue wherein the addition was made by the AO on account of unconfirmed trade creditors agreed upon by the assessee. In this case penalty proceedings were initiated for furnishing inaccurate particulars of income. The assessee did not prefer appeal against the assessment order. In this case the assessee submitted that in respect of sundry creditors, the liability did not cease to exist but the outstanding amount was surrendered to avoid litigation and no penalty was leviable. We further note that the Ld. CIT(A) in this case concluded that “the penalty could not be levied on the amount surrendered by the assessee, unless there was material on the record to show that the surrendered item was his income. There was no case of furnishing of inaccurate particulars of income so as to make the assessee liable for penal consequences” which was later been confirmed by the ITAT, Delhi, as aforesaid. Keeping in view of the facts of the case, we are of the considered opinion that it become evident that the income assessed by the AO was agreed upon by the assessee as a measure of cooperation and with a view to escape penal consequences. However, we further note that assessment order also do not indicate any concealment of income at all. In our view, the income was merely estimated without finding any concealment as such, hence the penalty is not attracted. We also find that section 271(1)(c) postulates imposition of penalty for furnishing of inaccurate particulars and concealment of income. On the facts and circumstances of this case the assessee’s conduct cannot be said to be contumacious so as to warrant levy of penalty. - Decided in favour of assessee
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