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2019 (1) TMI 643 - AT - Income TaxLevy of penalty u/s 271(1)(c) - expenditure incurred on scientific research - Held that:- If the claim besides being incorrect in law is mala fide, Explanation 1 to Section 271(1)(c) would come into play. Therefore, the precise question before us is to give a finding whether the claim of the assessee is bonafide or not. As we have already mentioned that in this case, the claim of the assessee that it incurred expenditure on scientific research has already been accepted by the learned CIT(A), so there is no question of claim being malafide. The position remains after the order of the CIT(A) is that the assessee’s claim that it incurred expenditure on scientific research stood accepted but the deduction is allowed at the rate of 100% instead of 150% as claimed by the assessee. In our opinion, merely because the rate of deduction is reduced by the CIT(A), it cannot be said that the claim of the assessee is malafide or incorrect. That Hon'ble Jurisdictional High Court in a recent decision in the case of Samtel India Ltd. [2018 (7) TMI 660 - DELHI HIGH COURT] has reexamined the decision of Reliance Petroproducts Pvt.Ltd. [2010 (3) TMI 80 - SUPREME COURT] and held that unless the details supplied in the return of income are not accurate, not exact or correct, not according to truth or erroneous, it cannot be said to be inaccurate particulars. In the case under appeal before us, admittedly, the particulars of expenditure incurred by the assessee have been accepted to be true and accurate by the Assessing Officer himself because he has not doubted the genuineness of the expenditure incurred. He only disputed whether the expenditure was incurred for normal business of manufacturing or for research work. This claim is also accepted by the learned CIT(A) that the expenditure was incurred for research purposes. The disallowance was made only because the deduction was allowed at a lesser rate than what was claimed by the assessee no inaccurate particulars deemed to be given - Decided in favour of assessee.
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