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2016 (8) TMI 406 - ITAT MUMBAIPenalty levied by AO u/s 271(1)(c) on the deemed dividend income - addition made u/s 2(22)(e) - Held that:- In the case before us, the assessee has declared full facts qua the loan raised from a company in which he has substantial shareholding and the explanation offered by the assessee was bonafide and not false and therefore the penalty cannot be levied in such a case. The FAA has confirmed the action of AO just on the basis that quantum was confirmed by predecessor CIT(A), which is not correct and proper. In our view the addition made u/s 2(22)(e) under the deeming provisions of Act is made and confirmed by the ld. CIT(A), in that case the penalty is not attracted specially when the assessee has offered an explanation which is bonafide and has disclosed full facts in the return of income qua the said unsecured loans raised from the sister concern in which the assessee has substantial interest. In view of the above facts, we set aside the order of ld. CIT(A) and direct the AO to delete the addition. - Decided in favour of assessee.
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