The Tax PublishersI.T.A. Nos. 3092 & 3187/Mum/2006, I.T.A. No. 2072/Mum/2010
2021 TaxPub(DT) 4322 (Mum-Trib)INCOME TAX ACT, 1961
Section 271(1)(c)
Issues relating to disallowances/additions, based on which penalty was imposed, were debatable issues on which more than one opinion is possible. Further, transfer pricing adjustment was made on purely estimate basis. Thus, such additions/disallowances, based on difference of opinion, could not lead to the inference that assessee has either furnished inaccurate particulars of income or concealed its income so as to levy penalty under section 271(1)(c). Therefore, penalty was deleted.
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Penalty under section 271(1)(c) - Concealment or furnishing of inaccurate particulars - Debatable issues and estimated addition -
AO made disallowance on account of Software Expenditure - Rs. 12,27,147, Depreciation on obsolete assets -- Rs. 55,54,998, VRS expenses -- Rs. 8,24,60,028, Bad debts -- Rs. 26,41,568. One more addition was on account of Transfer Pricing adjustment relating to payment of commission. As regards such additions and disallowances AO levied penalty under section 271(1)(c). Assessee challenged this. Held: Issues relating to disallowances/additions, based on which penalty was imposed, were debatable issues on which more than one opinion is possible. Further, transfer pricing adjustment was made on purely estimate basis. Thus, such additions/disallowances, based on difference of opinion, could not lead to the inference that assessee has either furnished inaccurate particulars of income or concealed its income so as to levy penalty under section 271(1)(c). Therefore, penalty was deleted.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
INCOME TAX ACT, 1961
Section 92C
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