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2022 (5) TMI 1340 - ITAT SURATPenalty u/s 271(1)(c) - addition made on account of social forestry expenses - CIT-A deleted the penalty levy - HELD THAT:- CIT(A) deleted the penalty on the ground that in assessee’s own case for the A.Y. 2011-12 identical issue had been decided in favour of the assessee and against the revenue by the earlier ld. CIT(A) by following the decision of Hon'ble Supreme Court in the case of Reliance Petroproducts (P) Ltd. [2010 (3) TMI 80 - SUPREME COURT] as held that ”mere making of claim which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding income of the assessee.” No new facts and circumstances has been brought on record by the ld. CIT-DR to controvert the findings so recorded by the ld. CIT(A), therefore, considering the totality of facts and circumstances, we do not find any reason to deviate from the findings of the ld. CIT(A), which we affirms the same. Addition u/s 80IA - CIT(A) has deleted the addition by observing the fact that the Assessing officer has not found any specific instance of furnishing of inaccurate particulars or concealment of details. All details were furnished, including audited accounts and impugned addition is a result of change in method/manner of allocation of expenses to the different units, which was a difference of opinion. CIT(A) by following the decision of Hon'ble Supreme Court in the case of Reliance Petroproducts [2010 (3) TMI 80 - SUPREME COURT] and Shri Rama Multi Tech [2013 (1) TMI 800 - GUJARAT HIGH COURT] & Gujarat Insecticides Ltd. [2013 (10) TMI 159 - GUJARAT HIGH COURT] had deleted the penalty levied by the Assessing officer. No new facts and circumstances has been brought on record by the ld. CIT-DR to controvert the findings so recorded by the ld. CIT(A), therefore, considering the totality of facts and circumstances, we do not find any reason to deviate from the findings of the ld. CIT(A), which we affirms the same. Addition of club expenses - CIT(A) had deleted the penalty levied with regard to club expenses. No new facts and circumstances has been brought on record by the ld. CIT-DR to controvert the findings so recorded by the ld. CIT(A), therefore, considering the totality of facts and circumstances, we do not find any reason to deviate from the findings of the ld. CIT(A), which we affirms the same. Addition on account of deployment of funds credited to capital work - Hon'ble Supreme Court in case of CIT v. Bokaro Steel Ltd. [1998 (12) TMI 4 - SUPREME COURT] and in the case of NTPC Sail Power Company P. Ltd [2012 (10) TMI 524 - DELHI HIGH COURT] held that "interest earned on surplus funds which are inextricably linked to the setting up of the project is a capital receipt & not to be taxed as revenue receipts. CIT(A) has also held that the accounting treatment given by assessee results only in delaying the tax effect, (in form of reduction in claim of depreciation as the project cost is reduced) so it is a dispute of year of taxation. It was further held that the accounting treatment was explained in notes to accounts forming part of balance sheet. CIT(A) held that Assessing officer has not given finding of any instance of furnishing inaccurate particulars or of concealment of particulars of income. The impugned penalty levied on addition made due to difference in opinion cannot be sustained and the ld. CIT(A) had deleted the penalty. Disallowance under Section 40(a)(ia) - disallowance is made solely for not making TDS. The Assessing Officer has not questioned genuineness of expenses or questioned the purpose of expenses. The explanation of the assessee was that they believed that no TDS to be made as per ratio lay down by Hon'ble Supreme Court in CIT v. Kotak Securities Lid. [2016 (3) TMI 1026 - SUPREME COURT] CIT(A) has further held that the assessee’s case is squarely covered by decision of Dahyabhai Veliibhc Patel [2013 (1) TMI 849 - ITAT AHMEDABAD] as held that "when genuineness of expenditure is not questioned & disallowance made merely on ground that TDS is not deducted" penalty u/ 271(1)(c) cannot be imposed. No new facts or law is brought to our notice to take other view, therefore, considering the totality of facts and circumstances, we do not find any reason to deviate from the findings of the ld. CIT(A), which we affirms the same. Decided against revenue.
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