2011 (1) TMI 328 - HC - Income Tax

Penalty - It appears that on the finding that as per provision of Section 36(1)(vii) of the Act a sum of Rs.20, 00, 000/- could not be claimed as allowable claim as the same was not routed through P&L account in the earlier year. penalty was imposed on the ground that such act is a clear case of concealment of income as well as furnishing of incorrect particulars of income - C.I.T.(Appeal) and Tribunal below have set aside the order of penalty on the ground that merely because assessee had claimed certain expenditure which was not acceptable such act itself cannot attract penalty under section 271(1C) of the Act - Order of CIT(A) and ITAT sustained.

Summary

The High Court of Calcutta dismissed the Revenue's appeal against the Income-tax Appellate Tribunal's order regarding penalty under section 271(1C) of the Income-tax Act, 1961 for the assessment year 2005-2006. The penalty was deleted as it was found that the expenditure claimed was not acceptable, but it did not amount to concealment of income or furnishing incorrect particulars of income. The appeal was deemed devoid of substance.