Case Law Details
Trine Entertainment Limited Vs ITO (ITAT Mumbai)
ITAT Mumbai held that penalty u/s 271(1)(c) not leviable as mere making of a claim which is not sustainable in law by itself will not amount to furnishing of inaccurate particulars of income.
Facts- The assessee is engaged in business of developing online and offline games softwares in its 100% export oriented STPI unit. The assessment of the year under consideration was completed by the Assessing Officer under Section 143(3) of the Act on 31.12.2013, wherein, additions were made in respect of disallowances of claim of deduction u/s 10A, disallowance u/s 40(a)(ia) and disallowance of capital expenditure u/s 37(1).
AO initiated penalty proceedings under Section 271(1)(c) of the Act for furnishing of inaccurate particulars of income in respect of above said three additions. After hearing the assessee, AO levied a penalty of Rs.38,40,000/- under Section 271(1)(c) of the Act. CIT(A) confirmed the same. Being aggrieved, the present appeal is filed.
Conclusion- Hon’ble Apex Court in the case of CIT vs Reliance Petroproducts (P.) Ltd., 322 ITR 158 (SC) has held that mere making of a claim which is not sustainable in law by itself will not amount to furnishing of inaccurate particulars of income. Accordingly, we are of the view that the Assessing Officer was not justified in levying penalty on this disallowance also.
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