Section 271(1)(c) of Income Tax Act, 1961— In the instant case, the Revenue seeks to challenge the action of the CIT(A) whereby the penalty of Rs. 1,59,91,080/- imposed by the AO was reversed.

Held that— in our view, the CIT(A) has correctly applied law and deleted the penalty. We totally concur with the view expressed by the CIT(A). The Revenue could not demonstrate the lack of bonafide in the action of the assessee. The assessee with reference to several judicial precedents has demonstrated before us that the issue as to whether expenditure in question is capital or revenue is highly debatable. Coupled with this, the substantial question of law in the quantum proceedings has also been admitted for adjudication by the Hon’ble High Court in appeal under s.260A of the Act. In this background, we see not error in the order of the CIT(A).[DCIT CIRCLE-1 (1) (2) , AHMEDABAD VERSUS CLP POWER INDIA PVT. LTD.] [2019] 18 ITCD Online (2) [ITAT AHMEDABAD]