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TMI Blog2024 (5) TMI 218X X X X Extracts X X X X X X X X Extracts X X X X ..... he order and in appeal CIT(A) has confirmed the addition on account of Arm s Length price and has deleted disallowances on account of foreign exchange fluctuation loss. Revenue has filed the appeal before ITAT against the order of CIT(A) and learned ITAT allowed the appeal against which assessee has filed an appeal before the Hon ble Delhi High Court [ 2024 (1) TMI 1274 - DELHI HIGH COURT] in which substantial question of law has been framed. In the present case, substantial question of law has been framed by the Hon ble Court in the appeal filed by the assessee challenging the addition confirmed by the Tribunal. The issue become debatable, no penalty in such consideration can be levied against the assessee. Assessee appeal allowed. - Sh. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts return of income on 31.10.2002 declaring loss of Rs. 10,86,15,300/-. Assessment u/s 143(3) was completed on 31.12.2004. AO by vide order dated 31.12.2004 made transfer pricing adjustment to determine the Arm s length price of Rs. 13,21,88,434/-. 4. Aggrieved by the order of the AO, assessee filed appeal before the CIT(A) and CIT(A) confirmed the addition of Rs. 1,87,93,367/- and deleted the foreign exchange fluctuation loss. After the order passed by learned CIT(A), a fresh show-cause notice for the penalty u/s 271(1)(c) was issued to the assessee on 08.03.2013. The assessee had filed a written reply. After considering the reply of the assessee, the AO has imposed the penalty of Rs. 67,09,240/- with the observation that the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imed the expenditure, which claim was not accepted or was not acceptable to the revenue, that by itself would not, in our opinion, attract the penalty u/s 271(1)(c). 6. We have heard learned DR and perused the material on record. Learned DR stated that the order passed by the AO was correct. Learned CIT(A) ignore the fact that the learned CIT(A) has confirmed the addition on account of transfer pricing adjustment to the extent of Rs. 1,87,93,367/-. 7. Learned Counsel for the assessee submitted that the order passed by the CIT(A) as per law and assessee provided the accurate details of losses on the basis of the record. The assessee furnished the accurate particulars, so the penalty cannot be imposed on the assessee. It is also submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished inaccurate particulars of his income. Making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars under section 271(1)(c) of the Act. Mere making of a claim which is not sustainable in law, by itself, will not tantamount to furnishing inaccurate particulars regarding income of the assessee. Merely because, the assessee had claimed an expenditure, which claim was not accepted or was not acceptable to the revenue, that by itself would not attract the penalty under section 271(1)(c) of the Act. 10. Hon ble Delhi Tribunal in the following cases held as under: (i) Johnson Matthey India (P.) Ltd. vs. DCIT [2019] 111 taxmann.com 77 (Delhi Trib.) 11. It is settled principle of law that when substantial question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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