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2017 (7) TMI 175 - AT - Income TaxPenalty u/s 271(1)(c) - addition u/s 36(1)(iii) - Held that:- As no part of the interest bearing funds available with the assessee could be related to the making of such investment, and in light of the availability of sufficient interest free funds and the profits/surplus generated during the year, which all could justifiably explain the investment made in the property at ‘BDB’, therefore no penalty u/s 271(1)(c) as regards the same was called for in the hands of the assessee. We however in all fairness and appreciation of the facts in totality, restore the matter to file of the A.O for fresh adjudication, and direct him to verify from the records of the assessee the factum of availability of sufficient interest free funds with the assessee, from where the aforesaid investment made towards purchase of property at ‘BDB’ could safely be explained, as had been so claimed and projected before us by the Ld. A.R. That needless to say, the A.O during the course of the set aside proceedings shall afford reasonable opportunity to the assessee to substantiate its contention.
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