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TMI Blog2021 (3) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... nce Petro Product Ltd. [ 2010 (3) TMI 19 - SUPREME COURT] wherein it is held that merely rejection of the claim of the assessee cannot invite penalty under section 271(1)(c) - AO has failed to substantiate any failure on the part of the assessee in disclosing all material facts fully and truly. AO has also failed to substantiate, as how the contention of the assessee was not bona fide. As noticed that in the grounds raised, the Revenue has only contested penalty in respect of depreciation on computers, whereas there is no separate computation of the depreciation on computers, either in the assessment order or in the penalty order. The finding of the Ld. CIT(A) on the issue in dispute is well reasoned and we do not find any infirmity in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee filed return of income on 29/09/2012 declaring loss of ₹ 7,41,35,379/-. The scrutiny assessment in the case was completed on 31/10/2014 at assessed income of ₹ 2,42,91,970/-. The Assessing Officer also issued penalty proceedings under section 271(1)(c) of Income-tax Act, 1961 (in short the Act ). The assessee did not prefer any appeal against the assessment order and, therefore, the Assessing Officer issued show-cause notice to the assessee on 07/04/2015 that as to why the penalty under section 271(1)(c) of the Act might not be levied. There was no compliance on the part of the assessee and thus the Assessing Officer levied the penalty in order dated 30/04/2015 @ 100% of the tax sought to be evaded, which was wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment order including the disallowance of depreciation of 6,73,09,336/- on the ground that no business was done by the appellant. The only income of the appellant was interest income from bank deposits/ income tax refund and miscellaneous income of 7,37,960/- against which the return of income of a loss of 7,41,35,079/- was filed. The AO disallowed expenses of 3,11,17,710/- besides depreciation and assessed the total income at ₹ 2,42,91,970/-. The appellant did not file any appeal against the said order. During the present appellate proceedings, the appellant submitted that the appeal against the assessment order was not filed only to save cost as the appellant company was declared sick vide order of BIFR dt. 31st October, 2014. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been disallowed per can not lead to the presumption of concealment. 6. The appellant s contention has been examined. It is not a case where full material facts were not disclosed before the Assessing Officer. The Assessing Officer has also made ouf a case as to why, the appellant's explanation was not bonafide. Since, the issue involved was a debatable issue and full material facts were disclosed by the appellant, the penalty levied is cancelled and the appeal is allowed. 4.1 In our opinion, the disallowance of expenses cannot attract penal provisions due to the reason that assessee has claimed the expenses for maintaining the status and structure of the assessee company during the BIFR proceedings and part of which has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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