TMI Blog2018 (6) TMI 1630X X X X Extracts X X X X X X X X Extracts X X X X ..... de or patently incorrect claim. In a case in which returned income is ₹ 35.37 Crores, errors of this magnitude cannot be said to deliberate errors with ulterior motives. The amounts are indeed small and explanations of the assessee are quite reasonable. Exchange fluctuation - Assessing Officer himself has accepted the fact that even income was booked on capital account by mistake as a result of wrong posting of capital field vouchers in the revenue account. Certainly, this kind of a casual approach is not desirable but then right now we are only concerned whether the explanation of the assessee is reasonable, and whether meets the test of preponderance of probabilities, or not. Viewed in this perspective, in our considered view, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the ld. CIT(A), in the matter of penalty under section 271(1)(c) of the Income Tax Act, 1961, for the assessment year 2009-10. 2. Grievance of the assessee, in substance, is that the learned CIT(A) erred in confirming the impugned penalty of ₹ 78,00,000/- imposed on the assessee. 3. The relevant material facts are like this. The quantum disallowances in respect of which the impugned penalty is levied are as follows :- (i) Addition of ₹ 1,30,869/- on account of other income; (ii) Addition of ₹ 1,01,456/- on account of interest expenses; (iii) Addition of ₹ 42,40,790/- on account of exchange fluctuation; (iv) Disallowance of ₹ 50,00,000/- o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said position was accepted in the assessment proceedings. However, the matter did not rest there. The Assessing Officer treated the same as concealment of income, and accordingly, imposed the impugned penalty which has survived the first appeal as well. The assessee is now in second appeal before us. 7. The last adjustment, in respect of which impugned penalty is levied, is in respect of denial of depreciation of ₹ 50 lakhs on building. The assessee had purchased land and building for a value of ₹ 5,93,47,914/-. The purchase deed did not separately specify the value of land and building components. On these facts, the assessee claimed depreciation of ₹ 50 lakhs treating cost of building at ₹ 5 Cror ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence to the exchange fluctuation amount of ₹ 42.40 lakhs, we find that the Assessing Officer himself has accepted the fact that even income was booked on capital account by mistake as a result of wrong posting of capital field vouchers in the revenue account. Certainly, this kind of a casual approach is not desirable but then right now we are only concerned whether the explanation of the assessee is reasonable, and whether meets the test of preponderance of probabilities, or not. Viewed in this perspective, in our considered view, the explanation offered by the assessee is reasonable and worth being accepted. We, therefore, deem it fit and proper to delete the penalty in respect of the addition for exchange fluctuation as well. As ..... X X X X Extracts X X X X X X X X Extracts X X X X
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