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2021 (1) TMI 786 - AT - Income TaxRectification of mistake u/s 154 - AO disallowed the cost of steam considered as nil value and denied deduction u/s 80IA in respect of the power division due to which in the Sugar Division, the expenditure towards the cost of steam purchased from power division was also disallowed - assessee’s contention is that the correct value of the steam is ₹ 1,54,17,891 and not ₹ 1,15,27,642/- which is the value taken by the AO in the consequential order dated 22.07.2014 - HELD THAT:- In the order u/s 154, the cost of steam transferred from power division to sugar division has been computed at ₹ 1,59,00,541/- which is more than the prayer of the assessee in application u/s 154. When we enquired whether the computation of the value of steam for this A.Y would have any consequential affect in the subsequent A.Ys, the learned Counsel for the assessee submitted that in the subsequent years, there was no disallowance and these calculations would not in any way affect the computation of income in the subsequent years. Since the relief granted by the Add. CIT u/s 154, was more than the relief claimed by the assessee in its application u/s 154 of the Act, we do not see any prejudice being caused to the assessee. We do not see any reason to interfere with the order of the Add. CIT dated 11.8.2014 u/s 154 of the Act. Penalty u/s 271(1)(c) - disallowance of the deduction u/s 80IA - HELD THAT:- After hearing both the parties and in view of our findings in the assessee’s appeal against the order of the AO u/s 154, dated 11.8.2014, we find that the computation of the cost of steam was a highly technical and complicated issue and further, the said exercise had been undertaken while passing the consequential order and also during the proceedings u/s 154. In such circumstances, we do not agree with the AO that there is any suppression of income or furnishing of incorrect information. It cannot be treated as a deliberate wrong claim, it is a debatable issue. Therefore, the penalty levied by the AO is set aside and the assessee’s appeal is accordingly allowed.
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