TaxTMI 
TaxTMI 
2015 (9) TMI 1345
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....short 'the Act'). The Ground of Appeal raised by the Revenue Reads as under:- "1. Whether on the facts and in the circumstances of the case and in law, the Learned CIT (A) erred in deleting the penalty imposed by the Assessing Officer u/s 271 (1 )(C) of I. T. Act, 1961, amounting to Rs. 34,26,79,519/without appreciating that the assessee had furnished inaccurate particulars in so far so was not eligible to claim deduction u/s 8018(9) as no commercial production or refining of mineral oil was carried on and that the claim for deduction u/s 8018 being patently inadmissible, and penalty on disallowance u/s 14A amounting to Rs. 19,75,991/and u/s 42A amounting to Rs. 2,55,07,5821were levied as assessee has furnished inaccurate particulars of ....
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.... Act; (iii) Disallowance u/s.14A of the Act of Rs. 58,70,442/-; and (iv) Disallowance of Rs. 7,57,80,104/- u/s. 42 of the Act. 4. In the above context, it was a common point between the parties that so far as the denial of deduction under section 80-IB(9) of the Act amounting to Rs. 84,87,05,610/- and the disallowance under section 14A of the Act amounting to Rs. 58,70,442/- are concerned, the Tribunal vide its order in ITA NO.61/Mum/2011 dated 7/2/2014 has deleted the additions. Thus, the additions, which formed the basis for levy of penalty stand deleted, penalty under section 271(1)(c) of the Act to the said extent does not survive. The Ld. Representative for the assessee pointed out that the order of the Tribunal dated 7/2/2014....
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.... penalty with respect to the denial of deduction under section 80-IB(9) of the Act in relation to three elements of such income, namely interest- Rs. 7,12,64,714/-; foreign exchange fluctuation gain Rs. 1,53,47,008/-; and, other income of Rs. 10,92,679/-, totalling to Rs. 8,77,04,401/- 5.1 On the aforesaid aspect, the CIT(A) has deleted the penalty on the ground that a mere rejection of a claim of deduction does not result in levy of penalty under section 271(1)(c) of the Act in as much as there is no furnishing of inaccurate particulars or concealment of income within the meaning of section 271(1)(c) of the Act. 5.2 Before us, the Ld. Representative for the assessee pointed out that in the Ground of appeal raised by the Revenue there....
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....ncome. In the present case, the plea of the assessee was that such incomes have been earned in the course of carrying on its activity of exploration and extracting of oil and, therefore, the same was eligible for the claim of deduction under section 80IB(9) of the Act. Ofcourse, the Revenue has differed with the assessee on this aspect. The Hon'ble Supreme Court in the case CIT vs. Reliance Petroproducts Pvt. Ltd., 322 ITR 158 (SC) held that of furnishing inaccurate particulars in the context of section 271(1)(c) of the Act would mean a situation where any of the particulars filed by the assessee are found to be untrue or false. A mere rejection of claim made in the return of income without there being any falsity or untruth in the particul....
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.... it to the returned income. As a wrong claim was made, the penalty u/s. 271(1)(c) of the Act has been rightly made. 6.3 On the contrary, the claim of the assessee has been that such expenditure represented aggregate of expenditure incurred in respect of development of oil block from which oil/gas has been found and commercial production has commenced. For the purpose of tax computation, assessee considered the actual expenses incurred as deduction which was worked out proportionately on the basis of total oil/gas reserves estimated from such blocks and the actual oil/gas produced during the year. The assessee had justified the claim of deduction under section 42(1) of the Act read with the Production Sharing Contract (PSC) entered into w....