TMI Blog2015 (8) TMI 1465X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty u/s.271(1)(c)of the Act Penalty notice the assessee had filed an explanation and we are of the opinion that it was a plausible explanation. If any information is suppressed by the assessee and but for the attentiveness of the AO, it would have escaped taxation, the assessee has to be dealt with sternly, but not in a case where the assessee has filed an explanation that is prima facie reasonable. In the case under consideration the reply filed by it was neither fanciful nor totally unacceptable. We find that in the case of Reliance Petro Products P. Ltd.(2010 (3) TMI 80 - SUPREME COURT) the Hon’ble Supreme Court has held that merely because an assessee raises a claim which is eventually disallowed, that does not mean that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed as per the terms and conditions of BBCD agreement for nonpayment of higher charges. ,that it had not paid the higher charges inclusive of principle amount for the period amounting USD 13,46,205/- and interest of USD 12,12,195. that on the outstanding principle and interest the exchange fluctuation as on 31.03.2000, amounting to ₹ 15,95,253/- and ₹ 14,36,451/- respectively was claimed by the assessee company as revenue expenditure. The assessee explained that this exchange fluctuation amounting to ₹ 54,68,161/- is on revenue account. The assessee's contention was rejected and addition was made and simultaneously penalty under section 271(1)(c ) initiated for furnished of inaccurate particulars of its income and noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had concealed the income by furnishing the inaccurate particulars and had committed default under section 271(1 )(c) of the Act. He imposed a penalty, being 100% of the tax sought to be evaded, on income of ₹ 12,76,202/- which worked out to ₹ 4,91,338/-. 3.In appellate proceedings, the assessee had filed written submissions and various case laws protesting against the aforesaid action of the AO. It was stated that though the liability was capital liability when ships were taken on hire, upon termination of the BBCD agreement, the said liability ceased to be in respect of acquisition of ship and the liability became part of circulating capital of the appellant and not fixed capital. Accordingly, the appellant claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot meant that the assessee had concealed the particulars of income or had filed inaccurate particulars. In other words, it is a different matter that the amount was brought under the assessment. However, as long as there is possibility to understand the provision in different ways and the assessee has chosen one, the occasion to invoke section 271 of the Act does not arise. Courts are of the view that penalty proceedings are different from the assessment proceedings and that issue of levy of penalty should be decided after considering the explanation furnished by the assessee in response to the notices issued u/s.271(1) (c)of the Act.In its reply to the penalty notice the assessee had filed an explanation and we are of the opinion that i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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