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2019 (5) TMI 1267 - AT - Income TaxLevy of penalty u/s 271(1)(c) - disallowance of interest u/s 24(b) - HELD THAT:- As per the return of income and as per the assessment order, there is no difference in the rent receipt and the municipals tax paid but only difference is on account of interest. The expenses u/s 24(a)/ 24(b) as per the return of income is ₹ 10,43,827/- whereas as per the Assessment Order such amount is ₹ 6,80,443/-. Even the interest u/s 24(a) as per the return of income and as per the Assessment Order is same. The only difference is in the interest calculated as per Section 24(b) which as per the return of income is ₹ 5,81,047/- where as per the Assessment Order the same is 2,46,662/- All particulars were given and there is no concealment as such which in my opinion warrants levy of penalty/s 271(1)(c). The Hon'ble Supreme Court in the case of Reliance Petro Products Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT] has held that a mere making of a claim which is not sustainable in law cannot by itself will amount to furnishing inaccurate particulars regarding the income of the assessee. Further, when the assessee has declared income of ₹ 5,00,971/- and the A.O completed the assessment on a at total income at ₹ 8,62,157/-, fail to understand as to how and why the penalty has been levied by the A.O on the assessed income at ₹ 8,62,157/- instead of the difference of ₹ 3,63,584/- being excess interest claimed as per u/s 24(b) . This shows that the A.O has not applied his mind. Although, the CIT(A) has considered the same and sustained penalty, however, the same in my opinion is not justified. Full particulars were given and nothing was hidden from the Department and the disallowance of interest of ₹ 3,63,584/- was on estimated basis, therefore, it is not a fit case for levy of penalty u/s 271(1)(c). Therefore, set aside the order of the CIT(A) and direct the A.O to cancel the penalty. The grounds raised by the assessee are accordingly allowed.
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