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Issues involved:
The judgment involves the levy of penalty u/s 271(1)(c) by the Commissioner of Income tax (Appeals) on the grounds of concealing income and furnishing inaccurate particulars of income. Issue 1: The Commissioner of Income tax (Appeals) upheld the penalty imposed by the Asst. Commissioner of Income tax, Cir. 8(3), Mumbai u/s 271(1)(c) for concealing income and furnishing inaccurate particulars of income. Details: - The appellant claimed deduction for charges paid to Registrar of Companies for increasing share capital, stamp duty, etc., based on advice received. - The appellant argued that being a sick company with significant losses, the claimed deduction was legally allowable. - The appellant contended that making a legal claim based on advice received should not attract penalty u/s 271(1)(c). Issue 2: The Appellate Tribunal considered the appellant's submissions regarding the claimed expenses and the restructuring of loans, leading to the conclusion that the penalty was not justified. Details: - The AO disallowed certain expenses claimed by the appellant, leading to the initiation of penalty proceedings u/s 271(1)(c). - The appellant argued that the expenses were treated as revenue expenditure based on advice received and genuine belief in their allowability. - The Appellate Tribunal found that the claimed expenses were not for tax advantage but due to a bona fide belief in their allowability as revenue expenditure. - Citing relevant case laws, the Tribunal concluded that the penalty was not warranted. Issue 3: The Tribunal analyzed the nature of the expenses claimed by the appellant and the applicability of penalty u/s 271(1)(c) in light of the Supreme Court's decision. Details: - The Tribunal noted that the expenses claimed were not for tax advantage but based on a genuine belief in their allowability as revenue expenditure. - Referring to the Supreme Court's decision, the Tribunal emphasized that incorrect claims do not necessarily amount to furnishing inaccurate particulars of income. - Based on the legal principles, the Tribunal held that the penalty was not justified and consequently deleted the same. In conclusion, the Appellate Tribunal ruled in favor of the appellant, allowing the appeal and deleting the penalty imposed u/s 271(1)(c) by the Commissioner of Income tax (Appeals).
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