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2018 (7) TMI 1482 - AT - Income TaxPenalty levied under sec. 271(1)(c) - addition being other interest income and as FDR interest - Held that:- We note that the penalty imposed under section 271 (1) (c ) of the Act, in respect of other interest income of ₹ 56, 81, 911/-, which has been deleted by the ld CIT(A), as the said amount was duly disclosed in the financial statement by the assessee. There was a claim by the assessee that said interest income of ₹ 56, 81, 911/- was eligible for deduction under section 80IB of the Act, and the assessee had disclosed the fact of earning said interest in the financial statements. We note that the assessee has disclosed the particulars of his income in the financial statements and has made full disclosure, in respect of other interest income of ₹ 56, 81, 911/- hence, there is neither "concealment of income" nor "furnishing inaccurate particulars of income". We note that mere making of this claim cannot lead to penalty automatically. Therefore, ld. CIT(A) has rightly deleted the penalty U/s 271 (1) (c) We note that the assessee, vide letter dated 19/03/2014, had explained to AO that the interest income of ₹ 37, 71, 024/- reflected in 26AS statement, was received from M/s. Bau Developer P. Ltd, and had been offered for taxation by the assessee, in the Assessment Year 2012-13. We note that the date of booking of the transaction in respect of M/s. Bau Developer P. Ltd is on 01. 08. 2011 (vide pb 11), which falls in assessment year 2012-13, therefore, the assessee has offered interest income of ₹ 37, 71, 024/-for taxation in the Assessment Year 2012-13. Since the assessee has offered the said income for taxation in the A. Y. 2012-13, hence there is no concealment We note that since the penalty notice issued to the assessee dated 20. 04. 2013 did not spell out as to which default the assessee has committed for which penalty u/s. 271(1)(c) of the Act has been initiated, therefore, respectfully following the Hon’ble Karnataka High Court’s order in Manjunatha Cotton & Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT] we cancel the penalty imposed by the AO which has been erroneously confirmed by the ld. CIT(A), partly. Therefore, the appeal of the Revenue is dismissed and cross objections raised by the assessee are allowed.
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