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TMI Blog2016 (7) TMI 1010X X X X Extracts X X X X X X X X Extracts X X X X ..... iled to rebut the presumption in Explanation - 1 of section 271(1)(c) of the Act. 2) "On the fact and in the circumstances of the case and in law, the Ld. CIT(A) erredin deleting the penalty u/s 271(1)(c) of the Act without appreciating that although there is no dispute that the assessee defaulted in following the clear provisions of S145A and there being a definite impact on profits and tax liability as a result". 3) The appellant prays that the order of the CIT (A) on the above ground be set aside and that of the AO be restored. 4) The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary. 3. Brief facts of the case are that the assessee is engaged in manufacturing, trading in agrochemi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the net effect of deviations from the valuation prescribed under section 145A and claims and/or disallowances connected thereto is NIL. Also, a Guidance Note on Tax Audit under section 44AB of the Act issued by the Institute of Chartered Accountants of India (ICAI) clarifies that there is no impact on the profits of the Company on account of adjustments envisaged under section 145A of the Act. The unutilized MOD VAT credit as on 31 March. 2006 is nothing but excise duty paid on input to be utilized on manufacture of excisable product. The said credit not related to the closing stock of finished goods. Accordingly, the same should not be added in closing stock in compliance with the provisions of section 145A of the Act. Further, MIL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee and by relying on the various judgments of the courts deleted the impugned penalty as levied by the AO u/s. 271(1) (c ) of the Act. 5. Aggrieved by the order of learned CIT(A) now the revenue preferred appeal before the Tribunal. 6. At the very outset, the ld. Ld. Departmental Representative appearing on behalf of the revenue submitted before us that the learned CIT(A) has erred in deleting the impugned penalty. He also submitted that the assessee has failed to rebut the presumption given in Explanation 1 of s. 271(1) (c) of the Act. He relied on the orders of the Assessing Officer in levying the impugned penalty being furnishing of concealment/inaccurate particulars of income on profits/tax liability. 7. On the hand, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the facts as well as legal position has rightly held that where an agreeable, controversial or debatable deduction is claimed, the claim could not be false, otherwise, it would become impossible for any assessee to raise any claim or deduction which might be debatable and it was not the intention of the legislature to make punishment such claims, if they were not accepted. The ld. CIT(A) rightly concluded that there was no furnishing of inaccurate particulars of income. 8.2 From the above, it could be safely concluded that as per Explanation 1 to section 271 ( c ) of the Act no penalty could be imposed on the assessee in the facts of the case. 9. The decision of Hon'ble apex court in the case of CIT v. Reliance Petroproducts Pvt. Ltd. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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