2020 (2) TMI 824

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....f the assessee is that the ld. CIT(A) erred in confirming the levy of penalty u/s 271(1)(c) of the Income tax Act, 1961 [hereinafter referred to as 'The Act' for short]'. 3. The roots for levy of penalty lie in the assessment order framed u/s 143(3) of the Act. The appellant company is engaged in the business of manufacturing of auto parts. During the course of assessment proceedings, the Assessing Officer noticed that the finance cost of Rs. 26.11 crores includes loss of foreign currency of Rs. 21.22 crores. The assessee furnished details of external commercial borrowings on which foreign fluctuation loss has been claimed. The assessee was asked to explain the reasons for claiming loss as revenue expenditure. 4. In its reply,....

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.... revenue expenditure. It is the say of the ld. counsel for the assessee that the Assessing Officer himself has accepted that the assessee has followed the accounting standards and has mentioned its audit report. 13. Referring to the decision of the Hon'ble Supreme Court in the case of Price Waterhouse Coopers [P] Ltd Civil Appeal No. 6924 of 2012, the ld. counsel for the assessee stated that a bonafide and inadvertent error should not form basis for imposition of penalty. The ld. counsel for the assessee further pointed out that the appellant company is in liquidation and has already assessed loss of Rs. 69.60 crores and at the fag end of its business, the assessee could not have derived any benefit by claiming forex loss as revenue ....