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2013 (6) TMI 625 - ITAT CHANDIGARHPenalty u/s 271(1)(c) - assessee has debited a provision of Rs. 3.5 crores in profit & loss account as provision for interest of Punjab Government & CONWARE - Held that:- It seems that amounts were not recoverable and in fact the amounts have been written off in the next year. Against the entry of interest, the assessee made a provision of such interest and debited the same amount to the Profit and loss account. There is no finding that details provided by the assessee are incorrect. As observed earlier, the claim of the assessee seems to be bonafide because principal amount itself was written off and therefore, perhaps there was no claim against the interest. The assessee provided the interest on the accrual basis but simultaneously made a debit entry against such interest. This is purely a bonafide claim based on bonafide belief. Thus the penal provision cannot be attracted in such a situation and accordingly delete the penalty. In favour of assessee.
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