TMI Blog2015 (9) TMI 1345X X X X Extracts X X X X X X X X Extracts X X X X ..... 271(1)(c) of the Act would mean a situation where any of the particulars filed by the assessee are found to be untrue or false. A mere rejection of claim made in the return of income without there being any falsity or untruth in the particulars filed would not invite penalty under section 271(1)(c) of the Act. CIT(A) made no mistake in deleting the penalty levied under section 271(1)(c), qua the denial of deduction under section 80IB(9) of the Act with respect to the incomes on account of interest, foreign exchange fluctuation gain and other income. - Decided against revenue. Disallowance of deduction claimed for exploration expenditure incurred for the business of prospecting for or extraction/production of oil under section 42(1) - Hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so far so was not eligible to claim deduction u/s 8018(9) as no commercial production or refining of mineral oil was carried on and that the claim for deduction u/s 8018 being patently inadmissible, and penalty on disallowance u/s 14A amounting to ₹ 19,75,991/and u/s 42A amounting to ₹ 2,55,07,5821were levied as assessee has furnished inaccurate particulars of the income and the facts of the assessee's case are different from those of Reliance Petro Products Pvt. Ltd. (322 ITR 158 SC) relied on by the CIT(A)? 2. The respondent assessee before us is a company incorporated under the provisions of Companies Act, 1956 and is inter-alia, engaged in the business of exploration, development and production of crude oil and ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4A of the Act amounting to ₹ 58,70,442/- are concerned, the Tribunal vide its order in ITA NO.61/Mum/2011 dated 7/2/2014 has deleted the additions. Thus, the additions, which formed the basis for levy of penalty stand deleted, penalty under section 271(1)(c) of the Act to the said extent does not survive. The Ld. Representative for the assessee pointed out that the order of the Tribunal dated 7/2/2014(supra) has been rendered after passing of the impugned order by the CIT(A), which is dated 23/10/2013, therefore, the CIT(A) did not have the benefit of the order of the Tribunal. So however, CIT(A) has deemed it fit to delete the penalty on the ground that the same was not exigible on the facts and circumstances of case. Be that as it m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect, the CIT(A) has deleted the penalty on the ground that a mere rejection of a claim of deduction does not result in levy of penalty under section 271(1)(c) of the Act in as much as there is no furnishing of inaccurate particulars or concealment of income within the meaning of section 271(1)(c) of the Act. 5.2 Before us, the Ld. Representative for the assessee pointed out that in the Ground of appeal raised by the Revenue there is no challenge to the action of the CIT(A) deleting the penalty in relation to the partial denial of deduction under section 80IB(9) of the Act in relation to the exclusion of aforesaid three element of income. The said plea of the assessee is indeed borne out of the Ground of appeal raised by the Revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee on this aspect. The Hon ble Supreme Court in the case CIT vs. Reliance Petroproducts Pvt. Ltd., 322 ITR 158 (SC) held that of furnishing inaccurate particulars in the context of section 271(1)(c) of the Act would mean a situation where any of the particulars filed by the assessee are found to be untrue or false. A mere rejection of claim made in the return of income without there being any falsity or untruth in the particulars filed would not invite penalty under section 271(1)(c) of the Act. Considered in the aforesaid light, in our view, the CIT(A) made no mistake in deleting the penalty levied under section 271(1)(c), qua the denial of deduction under section 80IB(9) of the Act with respect to the incomes on account of interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been found and commercial production has commenced. For the purpose of tax computation, assessee considered the actual expenses incurred as deduction which was worked out proportionately on the basis of total oil/gas reserves estimated from such blocks and the actual oil/gas produced during the year. The assessee had justified the claim of deduction under section 42(1) of the Act read with the Production Sharing Contract (PSC) entered into with the Government of India. Section 42 of the Act is a special provision for deductions in the case of business for prospecting for extraction or production of mineral oils, etc. It, inter-alia, prescribes for deduction of certain expenses incurred for such businesses. Broadly speaking, section 42(1) o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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