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TMI Blog2022 (3) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirming the levy of penalty u/s. 271(1)(c) of the Act pertaining to Assessment Year (A.Y) 2012-13. 2. The assessee has taken the following grounds before us. 1. That the Ld. CIT(A) -8, Ahmedabad has both erred in law and on facts while upholding the penalty order passed by Ld. DCIT Circle - 4(1 )(2), Ahmedabad U/s 271(1)(c) of the IT. Act, 1961 for Rs. 1,53,358/-, which .requires to be deleted. 2. That the penalty order passed U/s 271(1)(c) is barred by limitation and as such the penalty order passed is required to be quashed. 3. That the appellant has disallowed the foreign exchange fluctuation of Rs. 11, 10, 808/- instead of Rs. 15, 61, 995/- while filling of return of Income is an arithmetical mistake and does not amount of conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stakenly not disallowed in the computation of income and the assessee had suo moto offered disallowance of the same even before it was detected by the Assessing Officer during assessment proceedings. That therefore the assessee could not be charged with having concealed /furnished any inaccurate particulars of income for levy of penalty u/s 271(1)(c) of the Act. 5. To substantiate his contentions, our attention was drawn to the assessment 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out that the A.O. had not even detected any such error when the assessee had surrendered the amount of Foreign Exchange Fluctuation failed to be capitalized by it. He thereafter stated that even during assessment proceedings, the assessee had admitted that the capitalization had been left out to be done by mistake. He further pointed out that the fact that this error was committed by mistake was also evident 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid amount while computing its income which showed that it occurred entirely on account of a mistake. And during assessment proceedings, when assessee became aware of the same, he suo moto surrendered the said amount for addition to its income. Ld. Counsel for the assessee therefore stated that assessee could not be charged with having concealed or furnished inaccurate particulars of income and levy of 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 Rs. 4,51,187/- during the course of scrutiny asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case laws relied upon by the appellant are of no help as the mistake is not genuine or clerical, it is not the that some figure is misspelt or left out. Hence, I do not find any merit in the contention of the appellant and the penalty imposed amounting to Rs. 1, 53, 358/- being 100% of the tax sought to be evaded by furnishing inaccurate particulars of income as above 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 Rs. 4, 51, 186/- which was added to its income as capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount of foreign exchange fluctuation in the relevant block of assets reveals its clear intent of treating it as capital expense. Not adding it back while computing the income for the year can be safely beleived to be mistakenly done unless otherwise proved.
11. In view of the entire facts and circumstances as above therefore we agree with the assessee that it was mistake on his part for not having added the amount to his income. There is, therefore we hold no case for levy of penalty u/s 271(1)(c) of the Act. Penalty so levied, amounting to Rs. 1, 53, 358/-, is directed to be deleted.
12. In effect, appeal of the assessee is partly allowed.
Order pronounced in the open court on 23 -02-2022 X X X X Extracts X X X X X X X X Extracts X X X X
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