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2017 (5) TMI 1046 - AT - Income TaxPenalty levied under section 271(1)(c) - bad debts written off - Held that:- We find that issue in dispute in the quantum appeal has already been restored to the file of the Assessing Officer, the penalty levied by the Assessing Officer and sustained by the Ld. CIT-A cannot survive, and while deciding the issue the Assessing Officer, may take action for initiation of penalty proceeding in accordance with law . Accordingly all the grounds raised by the assessee in respect of the penalty levied on the issue of bad debts written off are allowed accordingly. Allowability of the claim under section 36(1)(vii) - Held that:- Assessing Officer has not examined the allowability of the claim under section 36(1)(vii) of the Act and rejected the claim merely with the finding that claim of the assessee for reducing the accrued income on a sticky loans in the computation of income for earlier years was sub-judice before the Ld. CIT(A) and the ITAT. In the circumstances, in our opinion the finding of the Ld. CIT(A) that claim made by the assessee was incorrect, is not justified and therefore the finding of the Ld. CIT(A) that the assessee has filed inaccurate particulars to the extent of the claim, cannot be accepted. In our opinion, once the principle debt has already been written off in the books of accounts, the interest due on said loans also was eligible for written off and therefore we do not find any incorrectness in making this alternative claim by the assessee. Accordingly, the penalty sustained by the Ld. CIT(A) is directed to be deleted and the grounds of the appeal are accordingly allowed.
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