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2020 (4) TMI 125 - AT - Income TaxLevy of penalty u/s. 271(1)(c) - No loss to revenue - addition made towards interest income under the head income from other sources - concealment of particulars of income in respect of interest received from Hiranandani Constructions Pvt Ltd. - income received from builder has not been offered to tax, because interest paid on loan is more than the amount of interest received and hence opined that the assessee has furnished inaccurate particulars of income which leads to concealment of particulars of income - HELD THAT:- The assessee has taken housing loan of ₹ 2,25,00,000/- from Kotak Mahindra Bank Ltd., on 28.01.2011 and said loan has been directly paid to Hiranandani constructions Pvt Ltd. Since the installment paid for purchase of flat is in excess of amount needs to be paid, in the schedule of payments the developer has paid interest of ₹ 13,62,658/- calculated @ 12% on excess money received before the due date of payment from the assessee. The assessee has paid interest on housing loan to Kotak Mahindra Bank a sum of ₹ 14,19,435/-, and did not claim deduction towards interest paid on housing loan u/s 24(b) of the Act. The assessee has also not offered interest income interest received from Hiranandani Constructions Pvt Ltd., of ₹ 13,62,658/- under the head income from other sources. Sole reason for not claiming interest deduction and not offering interest income for tax is that if you consider interest payment to bank and interest received from the builder the net result under the head income from other sources is loss at ₹ 56,777/-. No doubt, the assessee needs to disclose necessary facts with regard to payment of interest for housing loan and receipt of interest income from builder under appropriate head of income. But fact remains that if you consider net result of both transactions the assessee incurred loss of ₹ 56,777/- and from this it is abundantly clear that there is no loss of revenue to the Government. When there is no loss of revenue to the Government and the claim of the assessee is bonafide, then the rigours of penalty provided u/s 271(1)(c) of the Act cannot be invoked. In this case, on perusal of facts, we find that the explanation offered by the assessee for not offering interest income to tax is bonafide and hence we are of the considered view that the A.O as well as Ld. CIT(A) were erred in levying penalty u/s 271(1)(c) - Decided in favour of assessee.
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