The Tax Publishers2020 TaxPub(DT) 4825 (Mum-Trib)

INCOME TAX ACT, 1961

Section 271(1)(c)

Where assessee claimed cost incurred towards purchase of software as revenue expenditure, instead of treating the same as capital expenses, considering plea of assessee that expenditure was claimed inadvertently, and that it was not established that claim of assessee was incorrect in law or was mala fide, thus, penalty imposed under section 271(1)(c) was liable to be deleted.

Penalty under section 271(1)(c) - Validity - Assessee inadvertently claimed cost of purchase of software as revenue expenditure instead of treating same as capital expenses -

Assessee was aggrieved by imposition of penalty under section 271(1)(c), wherein addition was made by treating purchase of software as capital expenditure, as against claim of assessee, treating same as revenue expenditure. Held: Assessee confirmed that it claimed expenditure in question inadvertently. When assessee made a bona fide claim of deduction of expenditure even though it was not acceptable to the revenue, it would not lead to inference that assessee concealed particulars of income or filed inaccurate particulars of income. Nothing was brought on record to show that claim of assessee was incorrect in law or was mala fide, thus, penalty was liable to be deleted.

Followed:ACIT v. Torque Pharmaceuticals (P) Ltd. (2015) 173 TTJ 96 (Chd-Trib) : 2015 TaxPub(DT) 3872 (Chd-Trib) and CIT v. Haryana Warehousing Corporation (2009) 314 ITR 215 (P&H) : 2009 TaxPub(DT) 1855 (P&H-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2003-04



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