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Therefore, the assessee is furnished inaccurate particulars of income leading to concealment of income as far as to claim of provision for doubtful debts to the tune of Rs.8,97,677/- is concerned. The AO further, observed that the assessee has reduced the amount of energy sales (in energy division) credited to the P&L Account by amount of duty worth of Rs.10,80,654/-. The AO quoted the provisions u/s 43B of the Act that tax can be claimed on payment basis, therefore, the claim of electricity duty is not an order similarly the assessee has retained an amount of Rs.3,74,823/- being 10% of sale-tax set off and claimed that the same in the computation of income as deduction u/s 43B of the Act which is being set off, hence, can be allowed as per the provisions of Section 43B of the Act. The AO was of the view that had the assessment not picked up for scrutiny the wrong claim of the assesse would have escaped detection and, therefore, the appellant company could have walked away by suppressing its total income. Therefore, the AO has held that the assessee has furnished inaccurate particulars of income leading to concealment of income in respect of aforesaid additions/disallowances. Considering the same and placing reliance in the case of Union of India and others Vs. Dharmendra Textile Processors Ltd. (2008)(306 ITR 277) (SC) the AO levied the penalty of Rs.8,64,784/- being 100% of the tax sought to be evaded on the amount of Rs.23,53,154/-.

7. With regard to the Sales tax set off Rs.3,74,823/-not offered for tax. It was submitted that the assessee did not offer to tax Rs.3,74,823/- sales tax set off for tax on the ground that same will be offered to tax when the sales tax assessment orders are passed. This system of accounting was regularly followed by assessee. The system of accounting followed by assessee in DCIT VS. Maharashtra Scooters Ltd. (1997)(228 ITR 78)(Mum)(Trib)(AT) and ITO VS. Texmac Engineers (1991)(39 TTJ)(Ahd.)(365(Paper BookNo.11Pg.No. 115-119) This fact that the issue is decided by third members shows that issue was a debatable one which does not entail penalty u/s 271(1)(c) of the Act. The Ld. Counsel further, submitted that it is settled principle of law as laid down in the case of CIT Vs. Reliance Petroproducts (P) Ltd. (2010) (322 ITR 158)(SC)(Paper Book No.11 Pg. No. 120-129) that merely because assessee had claimed some expenditure, which claim was not accepted was not acceptable to revenue, that by itself would not attract penalty u/s 271(1)(c) of the Act. So far reliance by revenue above on the decision of the Dharmendra Textile Processor (supra). The Ld. Counsel submitted that this decision was considered by Hon'ble Supreme Court in the case of UOI Vs. Rajasthan Spinning & weaving Mills (SC)(2009)(224 CTR 1)(SC) wherein it was held that the penalty proceeding and assessment proceeding are separate and distinct and penalty is not automatic. In view of the aforesaid submissions/argument, the Ld. Counsel prayed that the appeal of the assessee may be allowed and penalty may be deleted.

11. Similarly, the Hon'ble Gujarat High Court in the case of Vithaldas Dhamjibhai (1981) 6 Taxman 105 (Guj) held that the deduction for bad debts reserve account is sufficient to claim deduction u/s 36(2)(i)(b) of the Act, therefore, the claim of bad debts written off is allowable even it is not allowable then it is become a debatable issue on which penalty cannot be penalty u/s 271(1)(c) of the Act cannot be levied. Similarly, the figures of electricity duty of Rs.10,80,654/- were disclosed of profit and loss account (Paper Book4) and thus there was no intention to conceal the income. The Ld. Counsel has placed reliance on the decision of Hon'ble Calcutta High Court in the case of CESC Ltd. Vs. CIT (2015)(235 Taxman 6 (Cal) (High Court) (Paper Book No.II)(Pg. No. 90-96) where in it was held that the provisions of Section 43B of the Act are not applicable to the electricity duty. We further find that the assessee has claimed the deduction of electricity duty on accrual basis as gross sales of electricity was creditors to P & L Account. Further, the said amount has been offered to tax in the next A.Y. 2014-15 as electricity duty was not paid due to dispute. The Ld. Counsel has said that the case law as discussed in its submission in the aforesaid part of this order wherein it has been held that the penalty u/s 271(1)(c) of the Act cannot be made to the disallowance u/s 43B of the Act if, full particulars of income are disclosed by assessee. Similarly, the assessee did not offer to tax the same of Rs.3,74,823/- being sales tax set off for tax on the ground that the same may be offered to be tax when the sales tax assessment order are passed. Further, this system of accounting was regularly followed by assessee. Therefore, the system of accounting followed by assessee has been upheld in DCIT Vs. Maharashtra Scooters (supra). Thus, this issue becomes debatable which does not entail the penalty u/s 271(1)(c) of the Act. Thus, the assessee has offered and Explanation and said Explanation offered was not found to be false and accordingly is not covered by clause A of Explanation 1 to Section 271(1) (c) of the Act. Further, clause (B) of Explanation-1 to Section 271(1)(c) of the Act provides that where the assessee is not able to substantiate its Explanation to prove that such Explanation is bona-fide and all the facts relating to the same have been disclosed, penalty is leviable. As the claim of aforesaid expenses is discernible from the return of income profit and loss account balance-sheet hence the same it is not amount to concealment of income or furnishing inaccurate particulars of income. This is a factual position, therefore, the penalty u/s 271(1)(c) of the Act is not leviable. We are, therefore, of the considered view that the penalty is not sustainable in the law in the light of ratio laid down by Hon'ble Supreme Court in the case of CIT Vs. Reliance Petroproducts (supra) wherein it was held that merely because the assessee has claimed the expenditure which claimed was not accepted or was not acceptable by revenue, penalty u/s 271(1)(c) of the Act cannot be attracted. Reliance of the finding of the AO on the decision of Dharmendra Textile Processors (supra) has been dealt with in the case of UOI Vs. Rajasthan Spinning (Supra) wherein it was held that the penalty is not levied in each and every case and therefore, it was distinguished. In the light of aforesaid discussion, we are of the considered view that the penalty is not exigible in respect of disallowance of provisions for doubtful debts, electricity duty and sales tax set off. Accordingly, penalty levied in respect of aforesaid of disallowed/addition case amounting to Rs.8,64,784/- u/s 271(1)(c) of the Act is therefore, deleted. In view of the, ground nos. 1 to 3 of the appeal by assessee are therefore, allowed.