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2016 (11) TMI 355 - AT - Income TaxPenalty under section 271(1)(c) - Held that:- Assessee made entire disclosure in respect of its claim of expenditure and no false or incorrect particulars have been filed by the assessee. The assessee has also filed explanation for the claim made by it and which is not a malafide. Similarly, the assessee furnished all particulars in respect of claim of interest of ₹ 36 lacs related to loan of ₹ 2 crores from the Indian Air Force Benevolent Fund (IAFBF), however, the interest was disallowed due to dispute of the quantification of the amount in the year. In respect of the claim of loss on the sale of the factory shade and on account of stock and machinery we find that it was duly disclosed and appropriate note was given to the notes to the account to balance sheet. The Assessing Officer has not unearthed any new fact from his independent sources which could lead to furnishing of inaccurate particulars by the assessee. Similarly, all details of bad debt were available on the record. We find that the assessee has disclosed all facts regarding interest and other claims in the audited accounts and complete disclosure was made in notes to accounts and full explanation was furnished during the assessment proceedings and the explanation furnished are found to be bonafide. Also during the period the director of the company was under arrest and the company did not have any qualified persons to compile the return as per law and, therefore, even the interest written back credited to the profit and loss account was not withdrawn in spite of the clear mandate of section 41 (1) of the Act that such written back was not taxable - Decided in favour of assessee
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