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2015 (5) TMI 678 - ITAT MUMBAIPenalty levied u/s 271(1)(c) - Disallowance of deduction under section 10B in respect of interest income on MSEB deposit- Held that:- It cannot be said that the claim of the assessee is an absolute impermissible claim and does not fall in the category of bonafide claim. It is pertinent to note that in view of the various judgments as relied upon by the assessee there are certainly two possible views on this issue. Thus, we are of the considered opinion that the claim of deduction under section 10B in respect of the interest on deposit with MSEB deposit disallowed by the AO would not ipso facto lead to the conclusion that the assessee has concealed the particulars of income or furnished inaccurate particulars of income when there is no such allegation by the AO that the assessee has not furnished all relevant particulars and details in respect of this claim. Accordingly, we hold that the penalty under section 271(1)(c) is not justified in respect of disallowance of deduction under section 10B on interest income from deposit with MSEB. - Decided in favour of assesse. Weigh Bridge Receipts - Held that:- There is no dispute regarding the fact that weigh bridge is situated in the undertaking itself and therefore the income earned from such asset claimed as profit of business of the undertaking is a bonafide claim of the assessee. Mere disallowance of the claim under section 10B would not constitute concealment of income or furnishing inaccurate particulars of income when the assessee has disclosed all relevant facts and details in the return of income and also furnished the relevant material explaining the facts and source of the income. Accordingly in view of our observation on the issue of levy of penalty in respect of the interest income on MSEB deposit, we hold that the disallowance of claim under section 10B in respect of the income earned from weigh bridge will not attract the penalty provisions under section 271(1)(c) when the assessee has brought on record and explained to the AO the nature of income and source of income.- Decided in favour of assesse. Allocation of Directors’ remuneration - Held that:- When for the last six years the assessee was under the impression that no allocation of expenditure is required while computing the income of eligible undertaking because the AO has accepted the computation of income for deduction under section 10B without any allocation of directors’ remuneration then the claim for the assessment year under consideration is based on good faith and due diligence and therefore the disallowance of the same would not attract the penalty under section 271(1)(c). - Decided in favour of assesse. Transfer Pricing Adjustment- Held that:- When the penalty in the case of the assessee is related in respect of the transfer pricing adjustment and the transactions were duly disclosed by the assessee in the form No.3CEB. Even otherwise prior to the amendment to section 92B vide Finance Act, 2012 whereby the explanation has been inserted with retrospective effect from 01.04.2002 the claim of the assessee is based on good faith and due diligence and therefore we do not find it a fit case for levy of penalty under section 271(1)(c).- Decided in favour of assesse. Transfer pricing adjustment made by the TPO/AO in respect of actual expenditure incurred for securing bank guarantee and towards notional interest - Held that:- It is clear that the AO himself has not treated the actual expenditure incurred by the assessee for furnishing bank guarantee on behalf of the AE as an international transaction but it was disallowed under section 37. In view of the fact that AO has not treated it as an independent and separate international transaction while passing the assessment order for A.Y. 2008-09 the addition of transfer pricing adjustment on this account for the year under consideration does not attract the penalty under section 271(1)(c). - Decided in favour of assesse.
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