TMI Blog2012 (9) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... de in favour of assessee - ITA No. 36/Ind/2012 - - - Dated:- 9-7-2012 - Shri Joginder Singh and Shri R.C. Sharma, JJ. Assessee by Shri Hitesh Chimnani Department by Shri Keshav Saxena ORDER PER SHRI R.C. SHARMA, AM This is an appeal filed by the assessee against the order of the learned CIT(A) dated 1.7.2010 for the assessment year 2005-06 in the matter of imposition of penalty u/s 271(1)( ) of the Act. 2. Rival contentions have been heard and record perused. The brief facts of the case are that the appellant is a Special Purpose Vehicle (SVP) which is mandated to operate and maintain the 11.5 Km Rau Pithampur Road, in consideration of right to appropriate toll collection over a fixed period. The appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer has rightly imposed penalty of Rs. 44,00,000/- u/s 271(1)( ) of the IT Act. 4. It was argued by the ld. Counsel for the assessee that no element of concealment or even furnishing of inaccurate particulars since whatever was the stand of the assessee, it was truly and fairly put over the board with full disclosure in the original return, the audited accounts and notes annexed thereto (Since there was no turnover of the assessee, there was no requirement of tax audit report). In fact, the issue had been thoroughly analysed by the Assessing Officer in 143(3) proceedings, and was further clarified in the second (revised) return filed before the completion of assessment u/s 143(3) r.w.s. 147. He further submitted that the payment of Inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bs essential for levy of penalty u/s 271(1)(c) are absent. Section 273 of the ACT specifically bars the levy of penalty in case there is a reasonable cause shown by the assessee. 5. Reliance was placed on the decision in the case of New Horizon India Limited; 19 Taxman 44, Pradeep Agencies Joint Venture; 131 TTJ 189, 322 ITR 158, 180 Taxman 609 and 342 ITR 257. 6. After highlighting the ratio laid down in the above judicial pronouncements, the ld. Counsel for the assessee vehemently argued that it was not a fit case for levy of penalty, therefore, the Assessing Officer was not justified in levying the penalty which was confirmed by the learned CIT(A). 7. On the other hand, Shri Keshav Saxena, the learned CIT DR contended that assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Rupam Merchantile; 91 ITD 237, the contention of the learned CIT DR was that the facts are materially different, therefore, the assessee will not get any benefit out of this decision. 9. In view of the above judicial pronouncements, he vehemently argued that the lower authorities were perfectly justified in levying the penalty u/s 271(1)(c) of the Act in respect of wrong claim of interest expenses of Rs. 1.19 crores. 10. Rival contentions have been considered and record perused. We have also deliberated upon the case laws relied on by the lower authorities in their respective orders as well as the decisions cited by the ld. Counsel for the assessee and the learned CIT DR during the course of hearing before us in the context of f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs . Accordingly, it was held that decline of assessee s claim of interest against the loan utilized for making investment in tax free securities, will not amount to furnishing of inaccurate particulars so as to attract penalty u/s 271(1)(c) of the Act. Hon'ble Supreme Court in this case after considering the proposition of law laid down in the case of Dilip N.Shroff 291 ITR 519 (SC) and Dharmender Textile Processors 306 ITR 277 (SC), held as under:- A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the Return cannot amount to the inaccurate particulars. Merely because the assessee had claimed the expe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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