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2014 (9) TMI 1108 - AT - Income TaxPenalty u/s 271(1)(c) - treatment of interest income on deposits made during the construction period - Held that:- The assessee followed the decision of “Indian Oil Panipat Power Consortium Limited vs. ITO” (2009 (2) TMI 32 - DELHI HIGH COURT) wherein, it was held that where funds are infused specifically for purposes of construction or setting up of the plant, interest earned on temporary deposit of funds not immediately required for such purposes would be regarded as inextricably linked to setting up of plant and would, therefore, go to reduce the project cost. It was on the basis of the said decision that the assessee revised its return and claimed that interest income, which had been set off against the project cost in its books of account, was not chargeable to tax as “income from other sources”. The factum of the deposits having been made shortterm nowhere stands challenged. Thus, on this score also, the assessee has a prima facie good case. Turning to the issue of taxability of interest accrued from deposits of ₹ 7.50 crores made with the District Court, Bathinda arguments of the Ld. that since the deposit was made under the direction of the Hon’ble Supreme Court, it needs to be treated as capital receipt, to be set off against the cost of the project and accordingly after considering the arguments of the parties, we find there is prima facie case in favour of the assessee As regards the legal claim with reference to disclosure with regard thereto had been made, it was argued that since the matter was litigated there were two possible views and in such cases concealment of penalty is not leviable. Further, the AO nowhere specified the concealment of particulars of income alleged to have been concealed by the assessee. On this score too, the assessee has a prima facie case and the balance of convenience is in favour of the assessee. The purpose of taking into consideration the period of limitation for filing the appeal before the Tribunal is, as to whether the assessee is pressing/going to press for stay. Obviously, when such a remedy has been prescribed by the statute, it cannot be taken away at the will of the department. It is only because it is reasonably expected that the stay applications would be filed alongwith application by the end of the limitation period, that such period is to be taken into consideration. So far as the present cases are concerned, the appeals italicize been filed within limitation. - Decided in favour of assessee.
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