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2017 (5) TMI 1419 - ITAT DELHIPenalty u/s 271(1)(c) - suppression in closing stock - Held that:- In the present case, the AO has not collected any incriminating material against the assessee with regard to the closing stock of shares of Apollo Tyres valuing ₹ 60,58,065/- . The disclosure was made by the assessee through revised computation of income vide letter dated 8/8/06 and not under the constraint of exposure to adverse action by the AO. It is, thus, the case where disclosure has been made voluntarily and out of free will, but not under compulsion. Taking the entire gamut of the case into account, we note that there was no case for the AO that the explanation offered by the assessee was not bona fide or there was a concealment. It is repeatedly held by the Courts that the penalty on the ground of concealment of particulars or non-disclosure of full particulars can be levied only when in the accounts/ return an item has been suppressed dishonestly or the item has been claimed fraudulently or a bogus claim has been made. When the facts are clearly disclosed in the return of income, penalty cannot be levied and merely because an amount is not allowed or taxed to income, it cannot be said that the assessee had filed inaccurate particulars or concealed any income chargeable to tax. Further, conscious concealment is necessary. Even if some deduction or benefit is claimed by the assessee wrongly but bonafide and no malafide can be attributed, the penalty would not be levied. As argued that not filing correct return of income is equal to filing incorrect return of income and therefore the assessee can be said to be guilty of filing inaccurate particulars of income but for levy of penalty u/s. 271(1)(c) this status is not sufficient. The AO has to show by some positive material with which he can compare that what was filed by the assessee was inaccurate or was false leading to the inference that the assessee has concealed income or filed inaccurate particulars of income. Mere disallowance or not accepting the claim of the assessee will not be sufficient. The assessee had disclosed all material facts, it is held that there is no case of concealment or furnishing of inaccurate particulars of its income in respect of the disallowances. In view of above, we note that the case law relied upon by Ld. DR in the case of Mak Data (P) Ltd. vs. CIT-II (Sura) is relating to voluntary disclosure and hence, distinguished to the facts and circumstances of the present case. In view of the above, we are of the considered opinion that Ld. CIT(A) has rightly held that the AO was not justified in levying penalty u/s. 271(1)(C) in respect of the said disallowances. Accordingly, the same was rightly cancelled, which does not need any interference on our part, hence, we uphold the action of the Ld. CIT(A) in deleting the penalty in dispute and reject the ground raised by the assessee. - Decided in favour of assessee.
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