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2016 (5) TMI 415 - AT - Income TaxPenalty u/s 271(1)(c) - withdrawal of claim for deduction of interest expenditure / financial charges - Held that:- The complete terms and conditions along with copies of loan agreements, of the loans so obtained by the holding company which are stated to be at the behest and on behalf of the assessee company should have been brought on record with the Revenue along with details of terms of cancellation( deed of cancellation ) of the MOU with the said HDIL as the loans have been obtained by holding company on behalf and at behest of the assessee company to pay funds earlier received by the assessee company which was stated to have been advanced to HDIL and are now been recalled from HDIL pursuant to cancellation of MOU dated 15-10-2007 with HDIL and instead of bringing complete and true facts on record to substantiate its claim of allowance of interest/financial charges expenditure, the assessee company chose to take plea of withdrawing its claim to buy peace and that the losses in any case will not be allowed to be carried forward and set off in subsequent years in view of provisions of Section 79 of the Act of 1961 as the holding company has divested its shareholding in the assessee company in the year 2011 while return of income in which said claim of allowance of interest/ financial charges expenditure was made , was filed on 22.09.2009 , so it is incumbent on the part of the assessee company to explain that the claim of the allowance of interest / financial charges expenditure was legitimate and bona-fide within the four corners of the Act of 1961, when the return of income was filed in the year 2009 and not the later developments happening in the year 2011. Thus, keeping in view all these peculiar facts and circumstances of the case, in our considered view and in the interest of justice, one more opportunity needs to be given to the assessee company to bring all the relevant and cogent material on record with the revenue to substantiate that its claim of allowance of interest/financial charges expenditure was bona-fide and legitimate, the matter is now hereby set aside to the file of the A.O. to decide the issue of leviability of penalty u/s 271(1)(c ) of the Act , de-novo after considering all the relevant facts and evidences to be filed by the assessee company in its defense , after affording adequate opportunity to the assessee company of being heard. - Decided in favour of assessee for statistical purpose.
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