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2019 (9) TMI 654 - AT - Income TaxLevy of penalty u/s 271(1 )(c) - validity of notice issued for initiation of penalty - debatable issue - security deposit forfeited represented capital loss and hence, not allowable as deduction - HELD THAT:- The issue involved is only of the interpretation of the transaction of loss of security. According to the assessee, it was in the nature of revenue expenditure whereas according to the Assessing Officer, it is capital loss, not allowable against the business profit. There is no doubt that there were two opinions, whether the advances written off could be considered as revenue expenditure or capital expenditure. See MYSORE SUGAR COMPANY LIMITED [1962 (5) TMI 3 - SUPREME COURT] Hon’ble High Court of Punjab and Haryana in the case of Commissioner of Income Tax versus Amtek Auto Limited [2013 (6) TMI 133 - PUNJAB AND HARYANA HIGH COURT] has held that “merely because assessee claimed expenditure as revenue, which was held as capital by the Assessing Officer, penalty for concealment could not be imposed where assessee discloses nature of transaction”. In the case of Commissioner of Income Tax Vs. Electrolux Kelvantro Ltd. [2013 (9) TMI 970 - DELHI HIGH COURT] held that where the issue involved is debatable and not free from doubt, no penalty can be levied. - Decided in favour of assessee.
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