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2011 (7) TMI 594 - ITAT MUMBAIPenalty u/s 271(1)(c) - re-opening of assessment - addition made by the AO on account of dis-allowance u/s 43B(d) of interest on FCNR loans from scheduled banks - same view taken by auditors in audit report - assessee availed loan form HSBC bank and ICICI Bank - Held that:- In present case, assessee took loans from HSBC and ICICI Bank which are not SFC, or State Industrial Investment Corporation. U/s 4A of the Companies Act also, HSBC and ICICI Bank do not figure in the list of Public Financial Institutions. Therefore, provisions of section 43B(d) are not applicable in case of the assessee. Re-opening of the assessment, if challenged could be considered as bad in law as the same is based on change of opinion because AO had already completed assessment u/s 143(3) and made no dis-allowance. In any case, applicability of provisions of section 43A(e) was neither considered by the auditors nor the AO in the original assessment or in the reassessment completed after scrutiny, and therefore, the omission by the assessee to not consider the provisions of section 43B(e) has to be considered as bona fide. Penalty cannot be levied only on the ground that the assessee did not dispute the addition in appeal, order set aside and penalty levied is deleted - Decided in favor of assessee.
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