TMI Blog2010 (2) TMI 979X X X X Extracts X X X X X X X X Extracts X X X X ..... - RAJASTHAN HIGH COURT] held that when the assessee has disclosed the transaction which is the basis for capital gains tax and though wrongly claimed exemption from the capital gains tax, but that cannot be a case of penalty u/s 271(1)(c). If it has claimed any exemption after disclosing the relevant basic facts, and not offered that amount for tax, in such cases, penalty should not be imposed. In this view of the matter and keeping in view the ratio of decisions relied on by learned counsel for the assessee the penalty imposed by the AO and sustained by the learned CIT (A) is deleted. The grounds taken by the assessee are therefore, allowed. Assessee's appeal stands allowed. - Order The order of the Bench was delivered by D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rseas companies. Further it helps the customer base of the associate overseas companies in India in terms of understanding the products, its utilities, applications etc. to improve their end products." However, the Assessing Officer was of the view that the services rendered by M/s. Dynisco Extrusion-USA are in connection with the sale of their products to Indian customers. It is in the real sense commission income rather than technical consultancy claimed by the assessee which does not fall in the category of services eligible for deduction under section 80-O. Accordingly the assessee was asked as to why he claimed wrong deduction under section 80-O of the Act. It was explained by the assessee vide letter dated October 28, 2005 as unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty of Rs. 4,44,981 vide order dated April 28, 2006 passed under section 271(1)(c) of the Act. On appeal the learned Commissioner of Income-tax (Appeals) while observing that in this case a wrong deduction has been claimed without any basis for the same, upheld the penalty imposed by the Assessing Officer and dismissed the appeal. Being aggrieved by the order of the learned Commissioner of Incometax (Appeals), the assessee is in appeal before us challenging in all the grounds the sustenance of penalty imposed by the Assessing Officer under section 271(1)(c) of the Act. At the time of hearing learned counsel for the assessee while reiterating the same submissions as submitted before the learned Commissioner of Income-tax (Appeals) fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmits that in view of the wrong claim of deduction of section 80-O which is not allowable, the Assessing Officer was justified in imposing penalty under section 271(1)(c) of the Act and, hence, the same be upheld. We have carefully considered the submissions of the rival parties and perused the material available on record. It is settled law that penalty under section 271(1)(c) is a civil liability and the Revenue is not required to prove wilful concealment as held by the hon'ble Supreme Court in the case of Union of India v. Dharamendra Textile Processors [2008] 306 ITR 277. However, each and every addition made in the assessment cannot automatically lead to levy of penalty for concealment of income. A case for imposition of penalty has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of advice of the tax consultant supported by tax audit report was not found to be false or untrue, we are of the view that there is no concealment or furnishing of inaccurate particulars on the part of the assessee. This view also finds support from the judgment of the hon'ble Rajasthan High Court in Chandrapal Bagga v. ITAT [2003] 261 ITR 67 wherein it has been held (page 69) "When the assessee has disclosed the transaction which is the basis for capital gains tax and though wrongly claimed exemption from the capital gains tax, but that cannot be a case of penalty under section 271(1)(c) of the Income-tax Act, 1961. If it has claimed any exemption after disclosing the relevant basic facts and under ignorance of the provisions of the Act of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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