Section 32, 271 of Income Tax Act, 1961—Penalty u/s 271(1)(C) —In the instant case, appeal is filed by revenue against the order passed by CIT wherein CIT has deleted the penalty u/s 271(1)(c) imposed by the AO.

AO has issued notices under section 274 of the Act calling upon assessee to submit details regarding reason for depreciation being claimed at 120% on air pollution control of equipments on items over 120 days and 60% for items below 120 days.

Held that—it is observed that, assessee was under bona fide belief that depreciation calculated by software was correct. Thus in our view assessee was in bona fide belief that it is eligible for depreciation at 120% and that foreign exchange fluctuation loss on account of purchase of sale was a revenue expenditure. It is observed that explanation offered by assessee has not been found to be false by Ld.AO. In our considered opinion, it is a case of wrong claim, which cannot be categorised within ambit of filing of inaccurate particulars.
We do not find any infirmity in view of CIT(A) and same is upheld.[DCIT, CIRCLE 7 (2) , NEW DELHI VERSUS M/S DULI CHAND NARENDER KUMAR EXPORTS PVT. LTD. (PRESENTLY KNOWN AS DUNAR FOODS LTD.,)][2019] 10 ITCD Online (24) [ITAT DELHI]