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TMI Blog2014 (7) TMI 958X X X X Extracts X X X X X X X X Extracts X X X X ..... interest payble to banks as deductible expenses. As no evidence of payment was furnished, A.O. added the afore mentioned amount to the income. The addition was confirmed by the Ld. CIT(A). However, on further appeal, ITAT restored the issue to the file of A.O. for examining the details of interest claim and then allowing the same after verification. A.O. in the reassessment proceedings disallowed the interest amount again on the reason that assessee could not furnish the necessary details. It was the submission of the assessee that it could not reconcile the claim of interest as the banks were not furnishing the relevant information as the debts have become bad and expressed its helplessness to the A.O. to furnish the necessary evidence to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Supreme Court in the case of CIT vs. Reliance Petro Products (P) Ltd., (2010) 322 ITR 158 (SC) to submit that making a claim which could not be supported does not amount to furnishing inaccurate particulars. It was further submitted that the same Ld. CIT(A) in another group of company viz., M/s. Heman Fan Components P. Ltd., deleted the penalty on similar facts and on second appeal by Revenue, the Tribunal confirmed the deletion of penalty vide its order dated 18.06.2014 in ITA.Nos. 910 to 913/Hyd/2013 and relied on the principles laid down in the same case by the ITAT. 5. Learned D.R. however, relied on the orders of A.O. and Ld. CIT(A) to submit that assessee has deliberately claimed the interest loss and therefore, penalty i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that making a claim which could not be substantiated cannot be considered as furnishing inaccurate particulars. 6.1. This issue was elaborately discussed in the order of the Coordinate Bench of the Tribunal in the case of M/s. Heman Fan Components P. Ltd., Hyderabad where the CIT(A) on similar facts deleted the penalty and Revenue came in appeal vide ITA.Nos. 910, 911, 912 & 913/Hyd/2013 and the Tribunal vide its order dated 18.06.2014 held as under : "8. We heard both sides and perused the orders of the Revenue authorities and other material available on record. Admittedly, it is the interest payments on the working capital borrowed from the bank in the years under appeal, which were disallowed by the Assessing Officer in the course o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdinate bench of the Tribunal in the case of Avanthi Laboratories Ltd. (supra), which has been relied upon by the CIT(A) in the impugned order. 9. Further, merely because a claim made by the assessee is disallowed in the assessment, it cannot lead to the inference of either concealment of income or furnishing of inaccurate particulars of income by the assessee. We are supported in this behalf by the decision of the Apex Court in the case of Reliance Petro Products (supra), wherein it has been held as follows- "9. We are not concerned in the present case with the mens rea. However, we have to only see as to whether in this case, as a matter of fact, the assessee has given inaccurate particulars. In Webster's Dictionary, the word "inacc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk is not allowable. As held by the Hon'ble Supreme Court in the case of Reliance Petro Products (supra), mere making of a claim by the assessee in the return does not tantamount to furnishing of inaccurate particulars of income, and consequently, every disallowance made in the assessment cannot lead to the inference of concealment. 10. In the light of the above discussion, we are of the view that it is not a fit case for imposition of penalty under S.271(1)(c) of the Act, and as such the CIT(A), was very much justified in cancelling the impugned penalties levied by the Assessing Officer for the four years under appeal. We accordingly uphold the order of the CIT(A), rejecting the grounds of the Revenue in these appeals". 6.2. Interest amo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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