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TMI Blog2025 (5) TMI 1183X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication stands disposed of. ITA 133/2025 3. The Revenue has filed the present appeal, impugning an order dated 06.06.2024 passed by the learned Income Tax Appellate Tribunal [ITAT] in ITA No. 899/Del/2018 in respect of Assessment Year [AY] 2010-11, whereby the Revenue's appeal against an order dated 01.11.2017 passed by the Commissioner of Income Tax (Appeals)-42, New Delhi [CIT(A)], was rejected. 4. The Assessee had appealed before the CIT(A) against the penalty order dated 27.03.2017 passed by the Assessing Officer [AO], imposing a penalty under Section 271 (1) (c) of the Income Tax Act, 1961 [the Act] holding that the Respondent (Assessee) had wilfully attempted to reduce his income and, therefore, it was a fit case for imposition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... text and then penalty provision should be applied to see whether there was the concealment of particulars of income or the appellant has furnished inaccurate particulars so as to call for the penal action under Section 271 (1) (c). 6.14 In the appellant's case, the AO has held that the appellant has furnished inaccurate particulars of income and for concealing its income. However, I find that as regards the penalty on the issue of nature of expenditure, it is noted that such expenditure was towards acquisition of customer contracts and assembled workforce. It is a fact that such data of customer contracts and assembled work force is an intangible asset and the acquirer benefits from the same in the long term. 6.15 Therefore, claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness already being carried on by the company, based on information about customer contacts etc. Hence, the appellant claimed that the expenditure must be regarded on revenue field. 6.17 Such decisions highlight that two views are possible on this issue regarding claiming the expenditure as capital or revenue. Allowability of payments towards acquisition of customer contracts and assembled work force as an eligible revenue expenditure is a subject matter of debate and there are two possible views in this regard. If two views are possible on a particular matter and if an assessee has adopted a view most favorable to it, penalty proceedings are not warranted as held by Courts from time to time. The issue in the quantum appeal is debatable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of the CIT(A) and we find no infirmity with the decision of the CIT(A) holding that the question involved was a debatable one and, therefore, a penalty under Section 271 (1) (c) could not be imposed. 8. However, we note that the learned ITAT did not express any opinion as to the CIT(A)'s view; it rejected the Revenue's appeal solely on the ground that the notice issued by the AO under Section 274 of the Act read with Section 271 of the Act did not specifically state as to under which limb of Section 271 (1) (c) of the Act, penalty proceedings were intended to be proceeded. Section 271 (1) (c) of the Act has two limbs: the first is where the allegation is that the assessee has concealed income; and the second is, that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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