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2016 (7) TMI 1532 - ITAT MUMBAIPenalty u/s 271(1)(c) - Addition by estimating GP - HELD THAT:- This addition has been made by making estimate at all stages. The AO had estimated GP at 9% as against GP of 5.8% disclosed by the assessee; CIT(A) adopted 8% whereas the Tribunal has reduced it to 7%. The assessee is aggrieved with the fact that the detailed working submitted by it pointing out fallacies in the estimation done at various stages has been ignored . It is further noted by us that in any case, the addition has been made on estimate basis only. Concealment of income has not been proved by the AO while levying penalty. We do not find any justification to levy penalty on the addition which has been made on estimate basis and also keeping in view the fact that there is no uniformity even on the estimation. Thus, penalty levied on this addition is directed to be deleted. Addition u/s 69C - low household withdrawal for personal expenses - HELD THAT:- Addition has been reduced by the Tribunal to ₹ 40,000. In this case also, we find that pure guess work has been adopted by the lower authorities in making this addition. Thus, we do not find justification for levy of penalty in this case also and penalty levied on the same is directed to be deleted. Addition of interest - assessee had used borrowed funds for giving loan to M/s Shreekar Polyester Pvt Ltd and though assessee had earned interest income from the said party, the same was not assessable as business income - HELD THAT:- In any case, even if the AOs action of treating the aforesaid interest income as “Income from other sources”, is finally upheld as it is, then that fact itself cannot prove any concealment of income or furnishing inaccurate particulars of income. The assessee made the claim with proper disclosure in its P&L account supported with other details and documents. In the opinion of the Assessing Officer, the claim on account of interest expenditure was not allowable in full. On the other hand, in the opinion of the Tribunal, the disallowance to the extent of 50% made by AO was not sustainable and thus, only half of the disallowance as was made by the AO was finally sustained by the Tribunal. None of the authortities have branded the claim as bogus. Thus, it is not a case of concealment or furnishing of inaccurate particulars of income and thus, penalty has been wrongly levied on this disallowance and, therefore, the same is directed to be deleted. Addition u/s 68 - HELD THAT:- This issue has been sent back to the file of the Assessing Officer and, therefore, as on date, penalty does not survive. Thus, penalty on this addition is deleted. The Assessing Officer is free to initiate fresh penalty proceedings after deciding this issue as per law.
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