INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Concealment or furnishing of inaccurate particulars - Plausible explanation furnished by assessee as regards addition made on account of exchange rate difference -

AO brought exchange rate difference of Rs. 5 lakhs supplementing actual sale consideration to tax and assessee was saddled with penalty under section 271(1)(c). as regards thereto. Assessee's case was that difference of Rs. 5 lakhs had emerged, for the reason, that payer had failed to deduct tax at source at the time of making payment to the assessee, i.e., on 5-5-2007 and 7-5-2007, had thereafter for the limited purpose of deducting tax at source applied conversion rate of Rs. 41.678 on the amount of USD 475,000 that was already paid to assessee as against conversion rates of Rs. 42,5133 and Rs. 40.308 applied earlier.Held: Explanation of assessee safely fell within the sweep of a plausible explanation, which had not been dislodged or disproved by AO, therefore, he could not have justifiably been saddled with levy of penalty under section 271(1)(c) in respect of impugned 'excess realisation of foreign exchange'.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2008-09

INCOME TAX ACT, 1961

Section 271(1)(c)

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