TMI Blog2014 (7) TMI 950X X X X Extracts X X X X X X X X Extracts X X X X ..... acted - following the decision in CIT vs. Zoom Communication (P.) Ltd. [2010 (5) TMI 34 - DELHI HIGH COURT] - levy of penalty is upheld – Decided against Assessee. - I.T.A. No. 8869/Mum/2011 - - - Dated:- 15-7-2014 - Shri I. P. Bansal, JM And Shri Sanjay Arora, AM,JJ. For the Appellant : Shri Bhupendra Shah For the Respondent : Shri Jivanlal Lavidiya ORDER Per Sanjay Arora, A. M. This is an Appeal by the Assessee directed against the Order by the Commissioner of Income Tax (Appeals)-3, Mumbai ('CIT(A)' for short) dated 12.12.2011, confirming the levy of penalty u/s.271(1)(c) of the Income Tax Act, 1961 ('the Act' hereinafter) for the assessment year (A.Y.) 2003-04 vide order dated 22.03.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orking to ₹ 36,568/-, was accordingly levied, relying on the decision in the case of CIT vs. A. Sreenivasa Pai [2000] 242 ITR 29 (Ker). In first appeal, the ld. CIT(A) found that both the Explanation 1(A) and Explanation 1(B) to section 271(1)(c) stood attracted in the instant case. In-as-much as there was no nexus between the interest paid and her professional income, the assessee's claim was a deliberate attempt to suppress her professional income, and her case was without any explanation, attracting Explanation 1(A). In-as-much as the assessee had been unable to substantiate her explanation that the loan to the company was given with an intent to earn interest, Explanation 1(B) would stand attracted. Penalty was, accordingly, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tent to earn interest, apart from being inconsistent with the assessee's return, claiming interest against her professional receipt, was furnished for the first time before the ld. CIT(A). Even so, it is without any substantiation. No wonder, he finds the assessee's case as covered both under Explanation 1(A) and Explanation 1(B) to s. 271(1)(c). The main thrust of the assessee's arguments before us, placing reliance on the decision in the case of CIT vs. Shivam Motors Pvt. Ltd. (in IT(Appeal) No. 88 of 2014 dated 05.05.2014 - All.-HC)), was that in-as-much as no income stands generated from the loan, section 14A, where-under the disallowance had been effected, would have no application in the instant case. The argument is mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unable to raise loan on its own, refurbishes the view that an accommodation by way of interest-free loan was sought to be extended to the company by the assessee, a director and, as it appears, a principal stakeholder. 3.3 The assessee before us has placed reliance on the decision in the case of CIT v. Reliance Petroproducts (P.) Ltd. [2010] 322 ITR 158 (SC). The same nowhere rewrites the law (as explained by the apex court over a series of decisions referred to here-in- before), or states of Explanation 1 to section 271(1)(c), wherein the penalty stands levied, as no longer valid. Rather, to the extent it states that it all depends on the return (of income), it is against the assessee in the facts and circumstances of the case. In fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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