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TMI Blog2014 (8) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... nd circumstances of the case, the ld. CIT(A) CIT(A) has erred in deleting the penalty of Rs. 39,12,100/- imposed by the AO on the quantum amount which was confirmed by ITAT/CIT(A)." 3. The sole ground raised by the assessee in ITA No. 4422/D/2012 reads under:- "On the facts and circumstances of the case, the ld. CIT(A) CIT(A) has erred in deleting the penalty of Rs. 34,97,250/- imposed by the AO on the quantum amount which was confirmed by ITAT/CIT(A)." 4. The sole ground raised by the assessee in ITA No. 4423/D/2012 reads under:- "On the facts and circumstances of the case, the ld. CIT(A) CIT(A) has erred in deleting the penalty of Rs. 20,04,460/- imposed by the AO on the quantum amount which was confirmed by ITAT/CIT(A)." 5. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vied only on this ground that the part of claim has been disallowed. The AR has placed its reliance on the decision of Hon'ble Supreme Court in the case of CIT vs Reliance Petroproducts Pvt. Ltd. 322 ITR 158(SC) wherein it was held that merely because the claimed expenditure of the assessee was not accepted or was not acceptable to the revenue, would not attract penalty u/s 271(1)(c) of the Act. 10. On careful consideration of above submissions and contentions of both the sides, we observe that the CIT(A) deleted the penalty pertaining to the disallowance on account of software expenses with following observations and findings:- "It has been held in the case of CIT Vs Reliance Petro Products Pvt. Ltd., 322 ITR 158 (SC) that where merely b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liance Petroproducts Pvt. Ltd. (supra), Hon'ble Apex Court also observed that if contention of the revenue was accepted, then in case of every return where the claim of the assessee was not accepted by the AO for any reason, would invite penalty u/s 271(1)(c) of the Act which is not the intention of the legislature. Accordingly, we uphold the conclusion of the CIT(A) which deleted penalty on account of part disallowance pertaining to claim of software expenses of the assessee. 12. Coming to the issue of under-valuation of work in progress (WIP) of Rs. 1,38,191, we observe that the ITAT Delhi 'B' in assessee's own case in ITA No. 991/Del/2008 for AY 2001-02 dismissed the appeal of the revenue vide order dated 11.11.2009 (supra) upholding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, by no stretch of imagination, this kind of disallowance can be termed as a conscious malafide act of the assessee for concealment of particulars of income so as to attract the penalty u/s 271(1)( c) of the Act. Therefore, the CIT(A) was right in deleting the penalty on this issue in AY 2006-07 and we uphold the same. 14. The third and last issue is pertaining to the penalty on disallowance on account of excess claim of deduction u/s 80IC of the Act in all these years. Ld. DR submitted that during the quantum proceedings, the AO disallowed deduction u/s 80IC of the Act as the assessee made excess claim of deduction. The DR further pointed out that the apportionment of expenses and disallowance of deduction u/s 80IC was confirmed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in quantum proceedings. In the case of CIT Vs Dharampal Prem Chand Ltd. 329ITR 572 (Del.) the facts were similar to that in the present appeal. In that case the quantum of deductions claimed u/s 80IA and 80IB were reduced, due to allocation of certain overhead expenses between Head Office and units. The A. O. levied penalty u/s 271(1)(c) on account of part disallowance of the deductions. On these facts, the High Court upheld the decision of ITAT holding that penalty u/s 271(l)(c) is not imposable upon the assessee because computation of deduction admissible was a debatable issue. The Hon'ble Delhi High Court while dismissing Departmental appeal against the order of ITAT also referred to the decision of Apex Court in CIT Vs Reliance Pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tain disallowances and additions by the revenue being part of claim of the assessee or by estimating value of closing stock of work in progress (WIP) and the AO also made additions on the direction of the Tribunal in recomputation of deduction u/s 80IC of the Act. Subsequently, the AO initiated penalty proceedings and imposed penalty on the assessee on these issues which was deleted by the CIT(A) by passing impugned orders. We have examined impugned order on all grounds which granted relief for the assessee and we are unable to see any infirmity in the order of the CIT(A) which deleted penalty imposed by the AO. Accordingly, we come to a conclusion that all three appeals of the revenue, being devoid of merit, deserve to be dismissed and we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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