TMI Blog2014 (4) TMI 432X X X X Extracts X X X X X X X X Extracts X X X X ..... siness purposes - The AO had not brought on record any evidence that assessee had concealed income and furnished inaccurate particulars of income - the assessee used the loans for business purposes and interest had been paid on it after making TDS - The genuineness of the loan has not been doubted by the AO - explanation furnished by the assessee is not false as per Explanation 1 of Section 271(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed funds to earn interest income. The assessee was asked to prove the nexus between the interest earned and expenditure incurred for earning the interest. However, the assessee had not produced any detail to prove the nexus. Therefore, A.O. disallowed the claim of interest of Rs.2,13,996/- against interest income and initiated penalty proceeding u/s. 271(1)(c) for furnishing inaccurate particular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income was not a business income and therefore setting off the same against the business income was a deliberated act and amounted to filing of inaccurate particulars. No satisfactory explanation has been offered as to why inaccurate claim was made deliberately. On principle, the Assessing Officer is justified in levying the penalty. The ground of appeal is rejected to that extent. The appellant h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mely, Apurva Industries as a capital contribution and partly in Crest Polymers Pvt. Ltd. Such funds were used for business purposes in proprietary concern and interest was paid on amount borrowed for the business purposes, which is allowable under the Income Tax Law. The assessee earned interest on loan transferred to M/s. Crest Polymers Pvt. Ltd., which ahs been shown as income in the return. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tentions and perused the material on record. The ld. A.O. had not brought on record any evidence that assessee had concealed income and furnished inaccurate particulars of income. Apparently, the assessee used the loans for business purposes and interest had been paid on it after making TDS. The genuineness of the loan has not been doubted by the A.O. Therefore, explanation furnished by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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