TMI Blog2010 (1) TMI 787X X X X Extracts X X X X X X X X Extracts X X X X ..... n able to prove that the explanation offered by the assessee was false. In such circumstances even under explanation 1 to section 271(1)(C) penalty is not leviable, appeal dismissed. - I.T.A. No. 930/Del./09, - - - Dated:- 8-1-2010 - Deepak R. Shah, Rajpal Yadav, JJ. H.K. Lal, Sr. DR for the Appellant Ashok Kumar, G.M (Finance) Co. Secretary for the Respondent ORDER Deepak R. Shah, Accountant Member:- 1. This appeal by revenue is directed against the order of Ld. CIT(A) XVII, New Delhi dated 16.12.2008 in an appeal against order levying penalty u/s 271 (1) (C) of the Income Tax Act (the Act). 2. The revenue has raised the following ground :- 1. On the facts and in the circumstances of the case and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act on 25/9/2007. The AO also allowed relief of Rs. 1,12,20,363/- as per the direction of the CIT (A)XVII, being the amount of foreign usance bill interest paid by the Associates of the assessee company. On the balance amount of addition being Rs. 3,86,03,654/-, which was confirmed by the Ld. CIT (A) XVII, the AO initiated penalty proceedings u/s 271(1)(c) of the Act. 4. Before Ld. CIT (A) it was contended as under:- (i) The assessee is a public sector undertaking under the administrative control of Ministry of Commerce. (ii) The assessee has been engaged in trading activities. Letter of credit is issued by the bank on the basis of documents furnished by the supplier. (iii) The supplier gets the LC discounted through his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the AO and submissions made by the Ld. AR. The major issue of penalty in the instant case is regarding the addition on account of disallowance of foreign usance bill interest, which was initially made by the AO of Rs. 4,60,96,320/- and thereafter reduced by the CIT(A) to Rs. 3,86,03,654/-. The AO has levied the penalty by holding that the assessee has furnished inaccurate particulars of income whereas the defence of the appellant is mainly two fold, one - it is not a case of furnishing of inaccurate particulars of income, rather it was a legally tenable claim of the assessee which was rejected by the Ld. AO and CIT(A). It is also vehemently claimed by the appellant that the view taken by the Ld. AO and CIT(A), while disallowing the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is observed that this issue is also a debatable ssue as there may be a difference in opinion between the appellant and the AO as to whether the liability of a particular expenditure has crystallized during the year under consideration or in an earlier year. It is not a case of claim of bogus expenditure; therefore, it cannot be held that asseseee has furnished inaccurate particulars of income or a bogus claim of expenditure. In this regard the finding of the recent decision of Hon'ble Delhi High Court in the case of CIT vs. Sriram Pistons Ltd. Is quite relevant holding that when the rate of tax in two years are same when it is pity to dispute that in which year a deductible expenditure has been claimed. In view of such position the pena ..... X X X X Extracts X X X X X X X X Extracts X X X X
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