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2018 (6) TMI 163 - AT - Income TaxPenalty u/s 271(1)(c) - additions due to difference in rate of interest - Held that:- There is no denial of the fact that the assessee has incurred the interest expenditure which has been claimed as a deduction. Perusal of the chart showing details of loan availed and loan advanced appears that there is linkage between loan availed and loan advanced. Though, the assessee has ultimately offered the disallowed amount as income in a return of income filed under section 153A however, penalty under section 271(1)(c) being a separate and independent proceeding, the facts and evidences have to be considered and looked into afresh to find out whether the conditions of the penalty provision are satisfied or not. In any case of the matter, it is a case of deduction claimed by the assessee which has been disallowed by the Assessing Officer. That being the case, there is no concealment of income Addition of deemed dividend under section 2(22)(e) - Held that:- The assessee has advanced loan to M/s. Green Bird Developer Pvt. Ltd. and has received interest from the said company. In the aforesaid circumstances, the charge of concealment of income as made by the Assessing Officer is not established. That being the case, learned Commissioner (Appeals) was justified in deleting the penalty imposed under section 271(1)(c) of the Act in respect of the addition of deemed dividend under section 2(22)(e) of the Act. Addition of interest - assessee has availed loan from different persons at a higher rate of interest ranging between 12% and 18% it has charged interest on loan advanced @ 12% and 9% - Held that:- Assessing Officer has restricted the interest paid on loan availed at 12% resulting in the addition. Thus, from the facts on record it is very much clear that Assessing Officer has made the addition only on the basis of reasonableness. Thus, in effect, it is a notional addition and the assessee has not concealed any part of its income. That being the case, the provisions of section 271(1)(c) of the Act cannot get attracted to such addition even though the assessee might have accepted such addition. - Decided in favour of assessee
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