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2017 (10) TMI 1213 - ITAT MUMBAILevy of penalty by the AO u/s 271(1)(c) - disallowance of expenditure towards due diligence and professional consultancy - Held that:- We are of the view that the debentures whether convertible or non convertible are in the nature of loan at the time of their issuance and any expenditure incurred on issue of such debentures or bonds had to be regarded as part of the borrowing cost and have to be allowed as a deduction and as a revenue expenditure as held in the case of CIT vs. Secure Meter Ltd. (2008 (11) TMI 66 - HIGH COURT RAJASTHAN ) and CIT vs. ITC Hotels Ltd. (2009 (11) TMI 582 - Karnataka High Court). Once, the two high courts are in favour of assessee holding the Revenue in nature, the issue becomes highly debatable and two views are possible. Once two views are possible the penalty cannot be levied for furnishing of inaccurate particulars of income in view of case of CIT vs. Yahoo India Pvt. Ltd. (2013 (3) TMI 704 - BOMBAY HIGH COURT ). Hence, we are of the view that the CIT(A) has rightly deleted the penalty and we confirm the order of CIT(A). - Decided in favour of assessee.
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