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TMI Blog2012 (4) TMI 496X X X X Extracts X X X X X X X X Extracts X X X X ..... cate in this appeal is whether or not the CIT(A) was justified in deleting impugned penalty. 2. The material facts are not in dispute. The assessee is engaged in the business of manufacturing products. In the course of scrutiny assessment proceedings for this year, the Assessing Officer noted that the assessee had sold his factory land and building at Siliguri for Rs 96,00,000, and the market value of the same, as per circle rates, was Rs 97,58,000. The assessee took Rs 10,09,953 as value for factory building and equipment, and Rs 87,48,047 as value of land, for the purpose of computing long term capital gain. The long term capital gains were, as such, computed at Rs 24,93,446 but the assessee claimed exemption under section 54 G in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of legal opinion taken from one Shri A K Ganguly, that the assessee did not furnish any particulars which were found to be incorrect or false, that the claim may have been legally unacceptable but was made bona fide. With these findings of fact, the CIT(A) held that it was not a fit case for penalty. The penalty was, accordingly, quashed. The Assessing Officer is aggrieved of the relief so given by the CIT(A) and is in appeal before us. 3. We have heard the rival contentions, perused the material on record and duly considered factual matrix of the case in the light of the applicable legal position. 4. We find that the main thrust of learned Departmental Representative's submissions before us is on the fact that the exemption under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee made the error bona fide. In our considered view, therefore, he explanation of the assessee has rightly been accepted by the CIT(A). 5. We have also noted that it has been the case of the Assessing Officer that the assessee has furnished inaccurate particulars of income, but then, as is the settled legal position now, mere making of a wrong claim does not amount to furnishing of inaccurate particulars. Hon'ble Supreme Court judgment, in the case of CIT v. Reliance Petroproducts (P.) Ltd. [2010] 322 ITR 158/189 Taxman 322, were concerned with the question whether "in this case, as a matter of fact, the assessee has given inaccurate particulars". Their Lordships noted that "in this case, there is no finding that any details sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by the assessee, (b) when the explanation given by the assessee is found to be false, and (c) when the assessee provides an Explanation which he fails to substantiate and he fails to prove that the explanation was bona fide and that all the facts necessary for the same and material for computation of income have been duly disclosed by the assessee. In the case before us, the assessee has given an explanation for making the claim of depreciation and the said explanation has not been found to be false. Therefore, Explanation to section 271(1)(c) can get attracted only when the explanation of the assessee is found to not bona fide. In the case of CIT v. Nathulal Agarwala & Sons [1985] 153 ITR 292/22 Taxman 199 (Pat)(FB) Full Bench of Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not cease to be a case in which concealment penalty is to be levied, but then as long as there is a reasonable explanation for the conduct of the assessee, the onus of the assessee stands discharged. To illustrate, when a salaried employee claims deduction on account of depreciation on car from his salary income, he cannot possibly escape the rigour of penalty on the plea that what he has made is a purely legal claim in a transparent manner, and merely because claim is rejected, concealment penalty cannot be imposed. The legal claim must also be a reasonable claim. The true test, therefore, must lie in the nature of explanation of the assessee for having made the claim, and whether the explanation can be said to be a bona fide explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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