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2018 (8) TMI 1646 - AT - Income TaxAddition u/s 14A - interest expenditure incurred for earning of tax free income deserves to be disallowed - Held that:- There is no justification or supporting evidence in favour of the calculation of ₹ 8, 44, 577/-. From the submission of the assessee it reveals that it was a sum of ₹ 84, 577/- which has been in principle accepted by the CIT(A). Therefore, we allow this ground of appeal partly and confirm addition to the extent of ₹ 84, 577/-. Appeal of the assessee is accordingly partly allowed. Penalty u/s 271(1)(c) - disallowance of interest out of capitalization and disallowance of interest relating to earning of exempt income - Held that:- In earlier part of this order, we have considered quantum appeal of the assessee, wherein we have upheld interest expenses of ₹ 21, 94, 475/- out of ₹ 42, 77, 609/- and ₹ 84, 577/- out of ₹ 26, 83, 618. It will suggest that quantum on which it could be alleged that taxes evaded has been reduced substantially. If we go by the logic of the AO in the impugned order, then penalty would reduce substantially whereas the assessee has already accepted penalty amount of ₹ 24, 14, 500/- by not challenging the order of the ld. CIT(A) in penalty appeal levied in the first round. Considering the stand of the assessee that it has accepted penalty imposed under section 271(1)(c) of the Act, we are of the view that there should not be any second penalty on the same addition. We allow this appeal of the assessee and delete penalty
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