2019 (10) TMI 260

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..... me Court observes that a mere making of claim, which is not sustainable in law, by itself, will not amount to furnish inaccurate particulars regarding the income. Therefore, mere making of a claim which is disallowed in quantum proceedings, cannot by itself be a ground to impose penalty under Section 271(1)(c) of the Act. The fact that the respondent assessee was following the above method sinc .....

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..... 1. By this appeal the appellant Revenue challenges the order passed by the Income Tax Appellate Tribunal dated 29th April, 2016. The Tribunal by the impugned order allowed the appeal filed by the respondent and set aside the order passed by the Commissioner of Income Tax (Appeals) and directed the Assessing Officer to delete the penalty of ₹ 1,19,31,643/- imposed under Section 271(1)(c) .....

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..... ethod. The Assessing Officer, by assessment finalized on 24th December, 2009, disallowed the expenditure of ₹ 3,54,47,542/- claimed towards advertisement and sales promotion on the ground that the expenses would be claimed only in the year the project is completed and income offered to tax. Thus, commenced penalty proceedings. In penalty proceedings, the Assessing Officer held that the respo .....

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..... 1990-91 upto the subject Assessment Year 2007-08, the respondent assessee had made a claim for deduction of expenses on account of advertisement and sales promotion in the year it was incurred even when the income was offered to tax later under the project completion method of accounting. The Assessing Officer in the Assessment Year 2006-07 for the first time disputed the above method of claiming .....

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..... ct. 7. The fact that the respondent assessee was following the above method since 1990-1991 till the subject Assessment Year and there was no dispute in respect thereof save for the Assessment Year 2006-07 and the subject assessment year. This fact itself would militate against imposition of any penalty upon the respondent on the ground of furnishing inaccurate particulars of income .....

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