IN THE HIGH COURT OF DELHI AT NEW DELHI 
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  26.10.2010 
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 Present:       Mr. N.P.Sahni, Advocate for the Appellant. 
 Mr. O.P.Sapra, Advocate for the Respondent. 
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 +  ITA No.1651/2010. 
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 Penalty proceedings were initiated by the Assessing Officer and the 
 penalty was imposed under Section 271(1) (c) of the Income Tax Act on the ground 
 that following additions were made in the assessment carried out by the AO 
 which  is as under:- 
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 1. Loan from Sh. Mayuresh P Dave :       Rs.5,21,362/- 
 2.  Loan from Smt. Rajni Ben:                     Rs.4,46,134/- 
 3.  Excess pay Channel exp. Claimed       Rs.4,64,000/- 
 ______________ 
 Rs.14,31,496/- 
 _____________ 
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 No doubt these additions  made under section 62 of the Act are sustained 
 by the Higher Authorities. However, the penalty imposed has been deleted by the 
 Income Tax Appellate Tribunal on the ground that the act of the assessee was 
 bona fide. It is stated in the following backdrop:- 
 ? As regards penalty on account of disallowance of expenses, once again 
 the fact remains that the disallowance is made because as per the new 
 arrangement, the assessee was not required to icur the expenses. However, still 
 the fact remains that the assessee has made the payment on account of payment to 
 the channel companies. Though the assessee agreed for disallowance of such 
 expenses., on account of the fact that assessee was not under obligation to pay 
 such expenses, the claim was withdrawn but when the claim was made, it was under 
 bona fide belief. Having made the payment, assessee can be  said to be 
 entertaining bona fide for claiming such expenses. Therefore, it cannot be said 
 that assessee has furnished inaccurate particulars of income. All relevant 
 particulars were filed. 
 It is settled law that merely because additions are sustained in 
 assessment proceedings, though the same are relevant in penalty proceedings, the 
 same are not conclusive. The assessee has explained the credit in the name of 
 Sh. Dave and Smt. Rajni Ben. If  there are two persons failed to file evidence 
 for their source of payment., it cannot be said that the assessee has not 
 discharged its onus. Thereafter, the addition could have been made in the hands 
 of the persons providing credit but so far as assessee is concerned, the source 
 of credit is proved which is also substantiated by filing evidence of their 
 incurring the expenditure. Accordingly, we cancel the penalty levied.? 
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 We are of the view that no substantial question of law arises. 
 Dismissed. 
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 A.K. SIKRI, J. 
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 SURESH KAIT, J. 
 OCTOBER 26, 2010 
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 #15 
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