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TMI Blog2023 (1) TMI 1208X X X X Extracts X X X X X X X X Extracts X X X X ..... ause the appellant had failed to demonstrate the advances to sister concern were made for the business purpose. A mere making claim which is not sustainable by law itself will not amount to furnish inaccurate particulars of income as held by the Hon ble Supreme Court in the case of CIT vs. Reliance Petroproducts Pvt. Ltd. [ 2010 (3) TMI 80 - SUPREME COURT] Thus we are of the considered opinion that the appellant cannot be held guilty of furnishing inaccurate particulars of income and, therefore, the Assessing Officer was not justified in levy of penalty u/s 271(1)(c) - Decided in favour of assessee. - ITA No.1402/PUN/2019 - - - Dated:- 2-1-2023 - Shri Inturi Rama Rao, Accountant Member And Shri S. S. Viswanethra Ravi, Judicial Membe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s guilty of concealing inaccurate particulars of income vide order dated 28.06.2017 and also rejecting the contention of the appellant that no disallowance u/s 36(1)(iii) was required in view of the fact that the own funds were utilized for making the advances to the sister concern for the business purpose. 3. Being aggrieved by the penalty order, an appeal was filed before the ld. CIT(A), who vide impugned order confirmed the levy of penalty on the ground that the appellant had failed to substantiate that the advance was made for business purpose and also rejected that the ratio of the decision of the Hon ble Bombay High Court in the case of CIT vs. Dalmia Dyechem Industries Ltd. in I.T. Appeal No.1396 of 2013 is applicable. The ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial on record. The issue in the present appeal relates to levy of penalty under the provisions of section 271(1)(c) of the Act. The penalty was levied by the Assessing Officer in respect of addition made under the provisions of section 36(1)(iii) of the Act. It is an admitted fact that the appellant had not agitated the additions in the appellate proceedings. It is clearly settled position of law that when an assessee not agitated the addition in the appellate proceedings does not amount to either concealment of income or furnishing of inaccurate particulars of income. We have carefully gone through the assessment order and find that the addition u/s 36(1)(iii) was made by the Assessing Officer because the appellant had failed to demonst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retch of imagination, making an incorrect claim in law cannot tantamount to furnishing of inaccurate particulars. [Para 7] Therefore, it must be shown that the conditions under section 271(1)(c ) exist before the penalty is imposed. There can be no dispute that everything would depend upon the return filed, because that is the only document, where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. [Para 8] The word 'particulars' must mean the details supplied in the return, which are not accurate, not exact or correct, not according to truth or erroneous. In the instant case, there was no finding that any details supplied by the assessee in i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). If the contention of the revenue was accepted, then in case of every return where the claim made was not accepted by the Assessing Officer for any reason, the assessee would invite penalty under section 271(1)(c). That is clearly not the intendment of the Legislature. [Para 10] Therefore, the appeal filed by the revenue had no merits and was to be dismissed. 8. In the light of above legal position, we are of the considered opinion that the appellant cannot be held guilty of furnishing inaccurate particulars of income and, therefore, the Assessing Officer was not justified in levy of penalty u/s 271(1)(c) of the Act. Therefore, we direct the Assessing Officer to delete the penalty of Rs.34,50,500/- levied u/s 271(1)(c) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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