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October 2016

Penalty- Concealment of income- S. 271(1)(c) of I. T. Act, 1961: A. Y. 2005-06- Compensation paid for mining ores claimed as deduction in year of payment but allowed over five year period of mining- Assessee accepting order and revising subsequent returns- Levy of penalty u/s. 271(1)(c) not warranted

By Keshav B. Bhujle
Advocate
Reading Time 1 mins
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CIT Vs. Thakur Prasad Sao and Sons (P) Ltd.; 386 ITR 448 (Cal):

The assessee had paid Rs. 2.75 crores on account of compensation for mining ores for a period of five years which claimed as revenue expenditure in the A. Y. 2005-06. The Assessing Officer was of the view that the expenditure was allowable over a period of five years which was the period during which the mining was to be conducted. The assessee accepted that order and accordingly revised the subsequent returns. The Assessing Officer levied penalty u/s. 271(1)(c) of the Income-tax Act, 1961. The Tribunal held that it was not possible to hold that the assessee furnished inaccurate particulars or concealed its income and accordingly deleted the penalty.

On appeal by the Revenue, the Calcutta High Court upheld the decision of the Tribunal and held as under:

“The assessee did not accept the disallowance; that there was no disallowance as such. The imposition of penalty was not warranted.”

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