TMI Blog2012 (7) TMI 1015X X X X Extracts X X X X X X X X Extracts X X X X ..... ts return declaring total income of ₹ 2.51 crore. During the course of assessment proceedings it was observed by the A.O. from the Notes to the computation filed by the assessee that it claimed to have received certain reimbursements in the nature of link charges on a cost to cost basis from Convergys Information Management (India) Private Limited (CIM). The said amount was claimed as not chargeable to tax. On being called upon to explain as to how the said amount was not chargeable to tax, the assessee stated that CIM had used data communication lines procured by the assessee from third party service providers. Since these charges were allocated by the assessee on a cost to cost basis, no income arose from the reimbursement of such l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23 (Mum.)]. In the light of these precedents it is apparent that the payment for access to internet and bandwidth charges cannot be described as fees for technical services. 4. It is an entirely different matter that the assessee agreed to the addition and did not challenge it in the appellate proceedings. The mere fact that an addition has been accepted cannot per se be a ground to impose penalty u/s 271(1)(c). Both the assessment and penalty proceedings are distinct from each other. Though the finding given in quantum proceedings is relevant but not conclusive as to the imposition of penalty u/s 271(1)(c). If during the penalty proceedings the assessee succeeds in proving that it made a bona fide claim for deduction of any expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is evident that the assessee treated the reimbursement of cost as not having any income component therein and made a proper disclosure in that regard. The Hon ble Supreme Court in the case of CIT Vs. Reliance Petro Products Pvt. Ltd. [(2010) 322 ITR 158 (SC)] has held that simply for the reason that the Assessing Officer did not find the claim of the assessee to be sustainable in law up to a certain extent, it can not be a case for penalty u/s.271(1)(c) more so when the particulars furnished by the assessee were not inaccurate . 6. In view of the foregoing discussion, we are of the considered opinion that the learned CIT(A) was justified in deleting the penalty, at least, on the ground of possible view about non-taxability of the li ..... X X X X Extracts X X X X X X X X Extracts X X X X
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