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ITO, Ward 11 (3) New Delhi Versus FX Enterprises Solutions India Pvt. Ltd.

2015 (8) TMI 4 - ITAT DELHI

Penalty u/s 271(1)(c) - disallowance of interest paid and disallowance of the expenditure claimed - CIT(A) deleted penalty levy - Held that:- Expenditure of interest payment claimed by the appellant was not fictitious or bogus. It was a genuine expenditure claimed by the appellant and same was paid to the person from who loans were taken. There was no concealment of facts or furnishing of inaccurate particulars of income. The appellant has disclosed all the facts of the interest expenditure in t .....

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; 8, 04,076/- for A.Y 2008-09 and the balance amount of ₹ 14,58,300/- was pertaining to earlier years. The expenditure was revenue in nature and same was not bogus or not genuine. Everything was disclosed in the return of income and there was concealment or furnishing of inaccurate particulars. The disallowance made by the Assessing Officer was on the basis of difference of opinion. Any disallowance made on the basis of difference of opinion is not sufficient for arriving at conclusion tha .....

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- Diva Singh, JM And T. S. Kapoor, AM,JJ. For the Appellant : Shri K K Jaiswal, Sr. DR For the Respondent : Shri Yogesh K Jagia, Adv. ORDER Per: Diva Singh: By the present appeal the assessee assails the correctness of the order dated 1/8/2012 of CIT(A) XIII, New Delhi pertaining to 2009-10 Assessment Year on the following ground:- "1. On the facts and the circumstances, the Ld. CIT(A) has erred in law in deleting the penalty of ₹ 7,39,338/- of the Act imposed u/s 271(1)(c) of the I. .....

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ing the expenses debited in the P &L account in regard to which the addition was made for want of explanation filed. These additions were accepted by the assesses as no appeals were filed. As a result of the additions having been accepted the AO required the assessee to explain why penalty u/s 271(1)(C) should not be imposed. The explanation offered by the assessee was not accepted by the Assessing Officer on account of the following reason. "……………&hel .....

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ns made penalty amounting to ₹ 7,39,338/- was imposed. 4. Aggrieved by this the assessee came in appeal before the First Appellate Authority re-iterating the submissions advanced before the AO in penalty proceedings which have been extracted in the penalty order and also relying upon various decisions. Considering the explanation offered and the judicial precedent relied upon the penalty imposed was deleted. 5. Aggrieved by this, the Revenue is in appeal before the Tribunal. 6. Ld. Sr. DR, .....

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ubmission that this fact has not been discussed in the impugned order. Accordingly it was his submission that the said issue has not been discussed by the CIT(A) and the order needs to be set aside and the penalty order be confirmed. 7. The Ld. AR on the other hand submitted that a perusal of the penalty order would show that penalty has been imposed only on account of disallowance of interest paid and disallowance of the expenditure claimed. The objection posed on the ground that in the assessm .....

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e penalty was imposed. It was argued in the alternative even if the said issue is to be decided against the assessee. Then reliance is placed on the judgment of the Delhi High Court in the case of CIT VS. Nalwa Sons Investment (2010) 327 ITR 543 which addresses the issue. Copy of the same it was submitted is at 11 to 19 of the paper book. Inviting attention to Paper Book page 70, it was submitted that the department filed SLP against the said order and it was dismissed by the Apex Court. 7.1. Ad .....

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see has not challenged this addition does not mean that the assessee has withheld any particulars of income or filed in accurate particulars of income. 7.2. Addressing the next issue, it was his submission that the claim is based on the expenses in regard to the claim in 2008-09 wherein the assessee deferred the expenses @ rate of 1/5th for 5 years and the amount of ₹ 22,62,376/- consisted of ₹ 8,04,076/- for 2008-09 and the balance amount of 14,58,300/- pertaining to the earlier yea .....

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he material available on record. On a perusal of the assessment order it is seen that the Assessing Officer has recorded his satisfaction for initiating penalty proceedings u/s 271(1)(c) on three grounds. However, at the time of passing the penalty order, he has imposed penalty only on the grounds of the two additions of ₹ 22,62,376/- and ₹ 1,30,302/-made while working out the normal profits of the assessee company. Presumably to avoid the confusion this fact is emphasized in the pen .....

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under challenge considering the judicial precedent relied upon before us deserves to be upheld. Being satisfied with the reasoning and finding on facts we find ourselves unable to come to a contrary finding in the face of the peculiar facts qua the issues involved. In the absence of any infirmity in the impugned order, the following finding of the CIT(A) is upheld by us:- " 5.2 Decision "I have considered the submission of the appellant and observation of the Assessing Officer. It is .....

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of ₹ 7,39,338/-. It is submitted by the appellant that expenditure of interest payment claimed by the appellant was not fictitious or bogus. It was a genuine expenditure claimed by the appellant and same was paid to the person from who loans were taken. There was no concealment of facts or furnishing of inaccurate particulars of income. The appellant has disclosed all the facts of the interest expenditure in the return of income and claim was made on the basis of payment made to the perso .....

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