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2018 (10) TMI 920 - ITAT MUMBAIPenalty u/s.271(1)(c) - disallowance of expenses - assessee claimed the expenses were for business purpose only and not for personal purpose - Held that:- Company is engaged in the business of financial services for its clients and during the year under consideration the company was not able to get fruitful results for its clients and hence, no fees were earned by the company during the year under consideration. Since, the expenses are of fixed and administrative nature, they had to be incurred by the company during the year under consideration. Thus, there was no case of concealment of income nor there was any case of furnishing inaccurate particulars since the expenses incurred by the company are pertaining to the company itself and duly reflected in the return of income filed u/s. 139(1) for the year under consideration i.e. A.Y. 2012-13. The allegation of the AO that the expenses incurred are /or personal purpose since there is no income earned during the year under consideration without bringing any corroborative evidence on record is misplaced, accordingly, the penalty levied on this very ground is not sustainable. The CIT(A) has dealt with the issue threadbare and reached to the conclusion that even if the assessee has not carried any business during the previous year relevant to the assessment year, the expenses debited towards depreciation, bad debts, administrative expenses which are statutory in nature are to be incurred for complying with legal and statutory requirements under various laws are allowable deductions. Even if the AO disallowed these expenses during the course of Assessment, penalty is not leviable as the AO has not pointed out the concealment of particulars of income or furnished inaccurate particulars of income by assessee. No penalty is leviable in the instant case. - Decided in favour of assessee.
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