https://www.taxtmi.com/caselaws?id=774979 ITAT Bangalore upheld CIT(A)'s deletion of penalty u/s 271(1)(c) imposed by AO. The AO had treated assessee's advances as capital investments rather than trade advances, disallowing them as business losses, and imposed penalty for furnishing inaccurate particulars. The tribunal held that merely making unsustainable legal claims does not constitute furnishing inaccurate particulars without concealment or deliberate misstatement. The assessee had disclosed all relevant facts regarding advances to two companies in profit and loss account. No concealment or false information was established by Revenue. Following precedents from SC in Reliance Petroproducts, Karnataka HC in Manjunatha Cotton, and Delhi HC in Madhushree Gupta, the tribunal concluded that bona fide claims based on legitimate understanding of law, though ultimately disallowed, do not warrant penalty. The assessee's appeal was allowed. en-us Thu, 10 Jul 2025 00:00:00 +0530 Thu, 17 Jul 2025 08:19:12 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=774979 ITAT Bangalore upheld CIT(A)'s deletion of penalty u/s 271(1)(c) imposed by AO. The AO had treated assessee's advances as capital investments rather than trade advances, disallowing them as business losses, and imposed penalty for furnishing inaccurate particulars. The tribunal held that merely making unsustainable legal claims does not constitute furnishing inaccurate particulars without concealment or deliberate misstatement. The assessee had disclosed all relevant facts regarding advances to two companies in profit and loss account. No concealment or false information was established by Revenue. Following precedents from SC in Reliance Petroproducts, Karnataka HC in Manjunatha Cotton, and Delhi HC in Madhushree Gupta, the tribunal concluded that bona fide claims based on legitimate understanding of law, though ultimately disallowed, do not warrant penalty. The assessee's appeal was allowed. Case-Laws Income Tax Thu, 10 Jul 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=774979