TMI Blog2014 (8) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... be equated with concealment of income so as to attract penal provisions – it cannot be said that there was 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 – Decided against Revenue. Excess claim of deduction u/s 80IC – Held that:- Merely because of part disallowance on account of re-computation of deduction u/s 80IC of the Act, it cannot be said that the assessee concealed or furnished wrong particulars of its income which attracts penalty u/s 271(1)(c) of the Act because part disallowance of claim of assessee cannot be said to be a conscious and mala fide act of concealment or furnishing of inaccurate particulars of its income because the disallowance made by the AO on deduction claimed by the assessee u/s 80IC of the Act was finally made on the direction of the Tribunal to the AO to recompute the deduction of the assessee after furnishing and examining relevant facts and material – Decided against Revenue. - I.T.A.No.4421/Del/2012, I.T.A.No.4422/Del/2012, I.T.A.No.4423/Del/2012 - - - Dated:- 7-8-2014 - Shri S. V. Mehrotra And Shri Chandra Mohan Garg,JJ. For the Appellant : Shri Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther pointed out that the AO also imposed penalty pertaining to the alleged disallowance on account of software expenses treating the same as capital expenses and the major part of software expenses were allowed and a minor part of the claim of the assessee has been disallowed, therefore, penalty cannot be levied 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 because the claimed expenditure of the assessee was not accepted or not acceptable to revenue that by itself would not attract penalty u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he instant case, we found that the method of stock valuation had been disclosed by the assessee in the notes to the accounts forming part of balance-sheet as well as tax audit report wherein it was stated that the closing work-in-progress had been valued at the cost of raw-material plus conversion cost wherever applicable, Whereas in the Instant case, the Assessing Officer has not brought on record any material to show that the, assessee has furnished any Inaccurate particulars of income but on the contrary on the basis of estimation the Assessing Officer has worked out the value of work-inprogress at a figure different from what is stated by the assessee which by no stretch of imagination can be equated with concealment of income so as to attract penal provisions. 13. In view of above, respectfully following the above decision of Coordinate Bench of this Tribunal in assessee s own case, we are inclined to hold that the AO has not brought on record any material to show that the assessee has furnished inaccurate particulars of its income as the AO worked out the value of closing stock of work in progress at a figure which was different from the figure stated by the assessee in i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Petro products Pvt. Ltd., 322ITR 158 for distinguishing between a wrong claim and a false claim. 14. In view of the above, the issue being covered by the proposition laid down by Delhi High Court in the case of Dharampal Prem Chand Ltd. (supra), penalty imposed on account of alleged disallowance of deductions to the extent of ₹ 10,13,356/- is hereby deleted and the appeal allowed on this ground . 15. In view of above conclusion of the CIT(A), we hold that merely because of part disallowance on account of recomputation of deduction u/s 80IC ..... X X X X Extracts X X X X X X X X Extracts X X X X
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