9911796707
TMI Blog2022 (3) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... curate particular of income on this count. We agree with assessee that the impugned foreign exchange fluctuation was surrendered for taxation by the assessee immediately on becoming aware of the fact that it had not done so in the computation of income during assessment proceedings and even before detection by the Revenue The undisputed fact that the assessee had added this Foreign Exchange Fluctuation in its block of assets of plant and machinery and claimed depreciation thereon, which is clearly brought out from the computation of income for the year filed before us, lends credence to the explanation of the assessee that it was left out to be added to its income mistakenly. Having capitalized the amount of foreign exchange fluctuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and as such the penalty order passed is required to be quashed. 3. That the appellant has disallowed the foreign exchange fluctuation of ₹ 11, 10, 808/- instead of ₹ 15, 61, 995/- while filling of return of Income is an arithmetical mistake and does not amount of concealment or suppression of facts and therefore the penalty order passed U/s 271(1)(c) on disallowance of claim requires to be deleted. 4. That the Appellant has suo moto declared the disallowances of Foreign exchange fluctuation loss on capital assets during the course of assessment proceedings which does not amounts to concealment or inaccurate particulars of Income, therefore the penalty imposed u/s 271(1)(c) on wrong facts and circumstances requires t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order passed u/s. 143(3) of the Act in the impugned assessment year wherein the disallowance was made by the A.O. Copy of the said order was placed before us at paper book page nos. 34 to 46 and our attention was drawn to page no. 42 at point no. 7 of the assessment order where the impugned disallowance was dealt with Assessing Officer are as under: 7. Disallowance of foreign currency fluctuation During the course of assessment proceedings details were called for relating to foreign exchange expense and capitalization of such expense relating to capital goods, if any vide questionnaire date 07.10.2014. In the submission filed by letter dated 24.12.2014 assessee submitted that total foreign exchange fluctuation expense on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent from the fact that while computing its taxable income for the year, this amount of Foreign Exchange Fluctuation had been capitalized to the fixed assets and depreciation claimed thereon, but simultaneously while adding back the Foreign Exchange Expenses which were to be capitalized in the computation of income, the said amount was left to be done so. Our attention was drawn to the copy of computation of income for the impugned year filed before us at paper book page nos. 2, 3 4. Our attention was drawn to paper book page no. 3 which exhibited in the computation of business income in the computation of income. Our attention was specifically drawn to the disallowance u/s. 43(a) mentioned therein reflecting an amount of ₹ 11,10,808 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f penalty u/s. 271(1)(c) was therefore unjustified. 7. Ld. D.R. on the other hand relied on the order of the Ld. CIT(A) at para 3 as under:. 3. I have carefully gone through the impugned penalty order and the submissions made. AO levied penalty u/s, 271(1)(c) of the Act on the disallowance of ₹ 4,51,187/- during the course of scrutiny assessment orders u/s, 143(3) of the Act. In the course of scrutiny assessment proceedings AO required the appellant to furnish the details of foreign exchange fluctuation expense and capitalization of the same vide notice dated 07.10.2014. In response appellant vide their letter 24,12.2014 furnished before the AO that the foreign Exchange Fluctuation Expense towards capital goods debited to the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove is confirmed. Sole ground of appeal is dismissed. In the result, appeal is dismissed. 08. We have heard the contentions of both the parties and have gone through the orders of the authorities below. We find merit in the contention of the Ld. Counsel for the assessee that the amount of Foreign Exchange Fluctuation of ₹ 4, 51, 186/- which was added to its income as capital expenditure and on which penalty u/s. 271(1)(c) has been levied, was an inadvertent mistake on the part of the assessee, which on his suo moto discovery, he had offered to tax even before the detection by the Revenue and therefore assessee cannot be charged with having concealed or furnished inaccurate particulars of income. The facts as brought to our no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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