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TMI Blog2010 (4) TMI 1226X X X X Extracts X X X X X X X X Extracts X X X X ..... tions confirmed ignoring the fact that the assessee company had furnished inaccurate particulars of income by claiming (i) excess deduction u/s 10A of ₹ 20,54,000/--, (ii) Provision for Bad debts which was not actually written off amounting to ₹ 6,44,500/-, (iii) loss of assets scrapped ₹ 41,000/- and (iv) non deduction against the exempt income u/s. 14A of ₹ 2,00,000/- . 2. We have heard the learned representatives of both the parties, perused the findings of the authorities below and considered the material on record. 3. The facts of the case are that the assessee company filed its return of income declaring total income of Rs. Nil. The return was accompanied by the audited profit loss account, balance shee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, submitted that the disallowance was upheld to ₹ 2,00,000/- on estimate basis and there is no finding that the assessee has either made a bogus claim or furnished inaccurate particulars. It was also explained that since the disallowance is made only on estimate basis so it is not a case of furnishing inaccurate particulars or concealment of any income. The learned CIT(A) accepted the explanation of the assessee that disallowance of ₹ 2,00,000/- will not amount to concealment or furnishing of inaccurate particulars of income. It was further explained on account of disallowance of ₹ 41,000/- of loss on account of assets scrapped that the assessee disclosed the loss in Schedule 13 to the profit loss account under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) considering the explanation of the assessee cancelled the penalty u/s 271 (1) ( c ) of the IT Act. His findings in Para 10.1 to 11 are reproduced as under: 10. I have considered the above submission. The reason for disallowance has been discussed by the AO in his order. The ld. CIT(A) in his order has confirmed the disallowance of ₹ 20.54 lacs to the extent that the same has been treated as income not eligible for deduction u/s 10A. It is a fact that the appellant has disclosed other income of ₹ 454.33 lacs in its unit wise income filed along with the annual accounts. It is not the case of the AO that the appellant has made a false claim or suppressed facts relating to the above claim. The disallowance has been made on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The learned DR relied upon the order of the AO and submitted that the learned CIT(A) should not have cancelled the penalty when part of the additions have been maintained by the learned CIT(A) on merit. On the other hand, the learned Counsel for the assessee reiterated the submissions made before the authorities below and submitted that the additions above were not subject to appeal before the Tribunal. He has filed copy of the order of the Tribunal on quantum in the case of the assessee dated 21-11-2008 which revealed that the issue of disallowance of ₹ 2,00,000/- u/s 14A of the IT Act has been restored to the file of the AO for re-computing the disallowance in the light of the provisions of sub section (2) and (3) of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reliance Petroproducts Pvt. Ltd. 322 ITR 158 (SC) held that A glance at the provisions of section 271(1) (c ) of the Income-tax Act, 1961, suggest that in order to be covered by it, there has to be concealment of particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. The meaning of the word particulars used in section 271(1) ( c ) would embrace the details of the claim made. Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars. In order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the above decisions and in the light of the findings of the learned CIT(A), it is clear that additions have been sustained partly by disallowing the expenditure on interpretation of the provisions of law and even the disallowance of ₹ 2,00,000/- u/s 14A has been restored to the file of the AO for re-consideration. Therefore, it is not a fit case for levy of penalty. The AO has not brought any material on record to prove that the assessee has furnished inaccurate particulars of income or concealed particulars of income. We accordingly do not find any justification to interfere with the order of the learned CIT(A). We accordingly confirm his findings and dismiss the appeal of the Revenue. 9. As a result, appeal of the Revenue is di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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