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The Commissioner of Income Tax, Chennai Versus M/s Ambattur Clothing Ltd.

2015 (10) TMI 2055 - MADRAS HIGH COURT

Penalty u/s 271(1)(c) - dis-allowance under Section 94(7) - purchase of software and treatment of revenue expenditure as capital in nature - incidental expenditure, which was found to be not supported by proof - interest on income tax as assessee has duly debited the amount to its profit and loss account, but it did not add back - Held that:- First one of them falling under Section 94(7) is more or less an error of computation. The second one relates to treatment of software expenditure as 'capi .....

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see has duly debited this very amount to its profit and loss account but did not add back. We quote case law of Price Water Coopers P. Ltd. Vs. C.I.T. [2012 (9) TMI 775 - SUPREME COURT] in identical circumstances and hold that this cannot be held to be an instance of concealment and furnishing of inaccurate particulars of income inviting penalty under Section 271(1)(c) - Decided in favour of assessee. - T.C.A. No. 767 of 2015 - Dated:- 28-9-2015 - V Ramasubramanian And T Mathivanan, JJ. For the .....

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al bad by holding that it was not a case of concealment or furnishing of inaccurate particulars especially when the assessee has made wrong claim and Explanation (1) to Section 271(1)(c) would govern the same ?" 2. Heard Mr.T.Ravikumar, learned Standing Counsel for the Department. 3. In an assessment made pursuant to a notice issued under Section 143(2), the Assessing Officer found that there were four items, on which, the claim of the assessee was wrong. The first related to dis-allowance .....

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the Tribunal ordered deletion of penalty for the reasons stated in paragraph 6 of the order, which reads as follows : "It also emanates that the first one of them falling under Section 94(7) is more or less an error of computation. The second one relates to treatment of software expenditure as 'capital' in nature' instead of revenue as claimed. We deem it appropriate to observe that this is a highly debatable issue of perennial nature. Therefore, the assessee cannot be held to h .....

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