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TMI Blog2019 (6) TMI 1221X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 1,01,956/-, which the assessee had on its own accepted as inadvertent mistake, cannot be said to be deliberate so as to amount to furnishing of inaccurate particulars. Insofar as the penalty in respect of addition made on account of exchange rate fluctuation AO has accepted that the income was booked on capital account by mistake as a result of wrong posting of capital field vouchers in the revenue account. There was a mistake on part of the assessee while filing the return of income. In the opinion of this court, having regard to the findings recorded by the Tribunal, whereby the Tribunal has found the explanation submitted by the assessee to be plausible, which in the opinion of this court is a reasonable view, there is no reason to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 274 read with section 271(1)(c) of the Act to the respondentassessee. After considering the submissions advanced by the respondent-assessee, the Assessing Officer levied penalty of ₹ 78,00,000/- under section 271(1)(c) of the Act, on the following additions/disallowances which were confirmed by the Commissioner (Appeals) in the first appeal. i) Addition of other income ₹ 1,30,869/- ii) Disallowance of interest expenses of ₹ 1,01,456/- iii) Disallowance of exchange rate fluctuation ₹ 42,40,790/- iv) Disallowance of depreciation of ₹ 50,00,000/- v) Disallowance under section 40A(2)(b) ₹ 1,33,39,000/- 2.1 The assessee went in appeal before the Commissioner (Appeals) who dismissed the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that a claim which is wholly untenable in law and has absolutely no foundation on which it could be made, the assessee would not be liable to imposition of penalty, even if he was not acting bona fide while making a claim of this nature, that would give a licence to unscrupulous assessees to make wholly untenable and unsustainable claims without there being any basis for making them, in the hope that their return would not be picked up for scrutiny and they would be assessed on the basis of self-assessment under section 143(1) of the Act and even if their case is selected for scrutiny, they can get away merely by paying the tax, which in any case, was payable by them. The consequence would be that the persons who make claims of this nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he statement, and, more often than not, PMS receipts are dividend receipts which are tax exempt in nature. Similarly, interest on delayed TDS is an interest payment nevertheless and it cannot be treated as a fake, malafide or patently incorrect claim. In a case in which returned income is ₹ 35.37 crores, errors of this magnitude cannot be said to deliberate errors with ulterior motives. The amounts are indeed small and explanations of the assessee are quite reasonable. Similarly, with reference to the exchange fluctuation amount of ₹ 42.40 lakhs, we find that the Assessing Officer himself has accepted the fact that even income was booked on capital account by mistake as a result of wrong posting of capital field vouchers in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 171(1)(c) is concerned, all that is to be seen is whether or not the assessee has a reasonable explanation for making a claim, irrespective of it's eventual legal admissibility, as would appeal to a fact finding authority. The test for this explanation is thus much less onerous and cannot be linked to legal correctness of such an explanation. It is in this light that the explanation of the assessee has been considered, and it cannot be construed as having any bearing on merits of the matter." 6. From the findings recorded by the Tribunal, it is evident that in case of the assessee, the returned income was ₹ 35.37 crores. In these circumstances, the court is in agreement with the view adopted by the Tribunal that in a case of this ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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