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TMI Blog2019 (9) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee filed explanation before the AO as well as before the CIT(A). During penalty proceedings the assessee had made investments during the year in shares of Trent Ltd. which is engaged in the business of advertising and the investee company is engaged in the retail sector with a view to building long term business prospects for the group company, Trent Limited. Even the investments in shares were made out of mixed funds as well as borrowed funds. Hence in our view the explanation seems to be bonafide and assessee is not exigible to levy of penalty u/s. 271(1) (c) - Appeal of the assessee is allowed. - ITA No. 1902/Mum/2018 - - - Dated:- 18-7-2019 - Sri Mahavir Singh, JM And Sri M Balaganesh, AM For the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under section 274 read with section 271(1)(c) of the Act, whether the penalty had been initiated for concealment of income or for furnishing inaccurate particulars. 3. The leaned Commissioner of Income Tax (Appeals) erred in upholding the levy of penalty under section 271(1)(c) of the Act, without considering the fact that the notice under section 274 read with section 271(1)(c) was issued in a mechanical manner and therefore the penalty order passed under section 271(1)(c) is not sustainable in the eyes of law. 4. Without prejudice to ground nos. 1 to 3, the learned Commissioner of Income Tax (Appeals) erred in confirming the levy of penalty under section 271(1)(c) of the Act, even though there was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this adjustment cannot be the subject matter of the penalty proceedings because entire details were disclosed during the course of assessment proceedings or in the return of income. The Ld. Counsel for the assessee stated that this claim at the behest cannot be called wrong claim and not the case of furnishing to inaccurate particulars of income as alleged by the Assessing Officer and affirmed by the CIT(A). 5. On the other hand, the ld. Sr. DR has heavily relied on the orders of the Assessing Officer/ CIT(A). 6. In reply, the Ld. Counsel for the assessee also made another submissions even assuming for not conceding that a penalty to be levied, it should be levied on the amount of expenditure of ₹ 87, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector. Although, these were invested in shares of Trent Ltd., out of the common pool of the company s funds, which were mixed funds as well as borrowed funds. We find that the assessee has filed complete particulars of income before the Assessing Officer in the return of income and its audited accounts. For this, the assessee has already placed a reliance on the decision of the Hon ble Supreme Court in the case of CIT Vs. Reliance Petro-products Ltd reported in 322 ITR 158, wherein it was held that merely because a claim was not accepted by the Assessing Officer, that cannot itself lead to the levy of penalty. The ld. Ld. Counsel for the assessee drew our attention to the following para of the said decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee filed explanation before the Assessing Officer as well as before the CIT(A). During penalty proceedings the assessee had made investments during the year in shares of Trent Ltd. which is engaged in the business of advertising and the investee company Is engaged in the retail sector with a view to building long term business prospects for the group company, Trent Limited. Even the investments in shares were made out of mixed funds as well as borrowed funds. Hence in our view the explanation seems to be bonafide and assessee is not exigible to levy of penalty u/s. 271(1) (c) of the Income Tax Act, 1961 for furnishing of inaccurate particulars of income. Hence, we delete the penalty so levied and allow the appeal of assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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