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TMI Blog2012 (8) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... eputy Commissioner of Income-tax levying a penalty of Rs. 6,13,290/- u/s. 271(1)(c) of the Income-tax Act. 2. The learned CIT(A) and Assessing Officer failed to appreciate that the appellant had not furnished inaccurate particulars of income which would justify the levy of penalty u/s. 271(1)(c). 3. The assessee is an individual and filed her return of income on 31.10.2004 declaring the total income of Rs. 7,39,19,210/-. The assessee has shown loss of Rs. 4,81,839/- from business of share trading; long term capital gains and short term capital gains from investment in shares and minor's income. The assessment was completed u/s 143(3) on 29.12.2006 whereby the Assessing Officer made the following additions/disallowances. (a) B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness. Thus, the ld AR has submitted that the assessee has disclosed all the relevant details during the assessment proceedings and the genuineness of the expenditure has not been disputed by the Assessing Officer but was disallowed only on the ground that the assessee has carried out trading activity only in one scrip and for that, the expenditure of Rs. 4,93,135/- was on higher side. He has further submitted that the assessee has neither concealed any income or furnished inaccurate particulars of income and the disallowance/additions are made by the Assessing Officer on account of difference of opinion. 4.1 As regards the disallowance of interest expenditure, the ld AR has submitted that the assessee has borrowed money for the purpose o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that the Assessing Officer has initiated penalty proceedings only in respect of the disallowance of business loss and since no such penalty has been initiated u/s 271(1)(c) for other disallowances/additions; therefore, no penalty can be levied in the absence of satisfaction of the Assessing Officer recorded in the assessment order. He has referred the relevant part of the assessment order and submitted that the Assessing Officer has specifically mentioned that penalty proceedings u/s 271(1)(c) initiated only against the disallowance of business loss; but no such in satisfaction has been recorded against other disallowance. 4.3 The ld DR on the other hand has submitted that various expenses claimed by the assessee are found by the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s well as the relevant material on record. Out of the 3 additions made by the Assessing Officer, penalty has been levied only in respect of disallowance of business loss and interest expenditure. There is no dispute regarding the fact that during the year under consideration, the assessee has trading activity only in one scrip, which has resulted to trading profit of Rs. 3,371/- against which the assessee claimed the expenditure in the nature of computer maintenance, service charges, telephone charges, professional charges, depreciation, car expense etc., amounting to Rs. 4,93,174/- resulting net loss of Rs. 4,81,839/- as business loss. The Assessing Officer disallowed the claim of the assessee on the ground that looking at the volume of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the conclusion that the assessee has concealed the particulars of income or furnished inaccurate particulars of income leading to levy of penalty u/s 271(1)(C). 6. As regards the disallowance of interest expenditure, the assessee claimed the same against the income assessable under the head 'income from source sources'. The Assessing Officer disallowed the expenditure on the ground that the assessee claimed the set off against the interest income of the minors. Since the assessee could not explain the loans and utilization of the funds, the Assessing Officer disallowed the same. In the penalty proceedings, the assessee explained that the loans were taken for investment in the shares and since these loans were taken prior to the year in wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e claim of the assessee cannot be said as bogus. 7. As regards the contention of the ld AR that the Assessing Officer has not recorded the satisfaction for initiation of penalty proceedings in respect of disallowance of interest expenditure, it is to be noted that the Assessing Officer has specifically recorded the initiation of penalty proceedings u/s 271(1)(c) at the end of the assessment order, which itself sufficient to show that the Assessing Officer has recorded its satisfaction for initiation of penalty for all the disallowances/additions. It is not required on the part of the Assessing Officer to record his satisfaction for each and every disallowance/addition separately once the satisfaction is recorded at the end of the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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