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2010 (1) TMI 787 - AT - Income TaxPenalty u/s 271 (1) (C) of the Income Tax Act - disallowances on account of Foreign Usance Bill Interest and Prior Period expenses - claim of prior period expenses was disallowed on the ground that the expenditure does not pertain to the instant assessment year - Held that:- interest paid on Usance Bill through the bankers is not allowable whereas the assessee is under bonafide belief that the expenses are allowable. assessee was followed with full disclosure in the tax audit report and therefore there was no furnishing of inaccurate particulars. The particulars were properly disclosed in the tax audit report as well as during the assessment proceedings. The AO has not been able to prove that the explanation offered by the assessee was false. In such circumstances even under explanation 1 to section 271(1)(C) penalty is not leviable, appeal dismissed.
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