TMI Blog2019 (1) TMI 1524X X X X Extracts X X X X X X X X Extracts X X X X ..... rcise. Therefore, it cannot be said that the assessee has not done TP exercise in good faith and with due diligence. Another reason for making the adjustments was that the assessee had claimed capacity utilisation which was denied by the TPO/CIT(A)/ITAT. The difference in level of capacity utilisation is an accepted principle though denied in the case of the assessee but then the same cannot tantamount to filing TP report without good faith and due diligence. Considering the TP documentation of the assessee in totality, we are of the considered opinion that neither Explanation 1 as applied by the Assessing Officer nor Explanation 7 as applied by the CIT(A) to section 271(1)(c) of the Act apply. No merit in the penalty so levied and we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 25,31,59,381/- 5. The quarrel travelled upto the Tribunal and the Tribunal, vide order dated 15.03.2013, in ITA No. 5735/DEL/2011 upheld the adjustments at Sl. Nos. 1 and 2 above, and other two adjustments were deleted. 6. Taking a leaf out of the order of the Tribunal, the Assessing Officer invoked Explanation 1 of section 271(1)(c) of the Act and came to the conclusion that the assessee has concealed its true income liable to tax by way of furnishing inaccurate particulars of its income by claiming wrong deduction and hence it is a clear-cut case for imposition of penalty u/s 271(1)(c) of the Act and, accordingly, levied penalty of ₹ 1,54,67,271/-. 7. The assessee agitated the matter before the CIT(A) bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accurate particulars of income. In our understanding of the law, prior to 2007, there was a legal debate as to whether multiple year data can be used or current year data has to be used. In our considered opinion, this being a debatable issue at that point when the assessee filed its return of income, adoption of multiple year data for arriving at ALP is a bonafide exercise. Therefore, it cannot be said that the assessee has not done TP exercise in good faith and with due diligence. 11. Another reason for making the adjustments was that the assessee had claimed capacity utilisation which was denied by the TPO/CIT(A)/ITAT. The difference in level of capacity utilisation is an accepted principle though denied in the case of the assessee bu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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