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Deputy Commissioner of Income Tax Versus M/s. Sima Textile Processing Centre Ltd

2015 (10) TMI 1482 - ITAT CHENNAI

Penalty u/s 271(1)(c) - assessee has concealed income by setting off interest against expenditure - CIT(A) delted the penalty - Held that:- Similar to the facts of the case before the Delhi High Court in CIT Vs. Mushashi Autoparts India P.Ltd. (2010 (12) TMI 106 - Delhi High Court) and therefore held that there was no filing of inaccurate particulars of income and there was no concealment of income on the part of the assessee.

We also find that the action of the Assessing Officer in .....

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re inextricably linked with the process of setting up of its plant and machinery such receipts will go to reduce the cost of its assets and these receipts are of the capital nature and cannot be taxed as income. In the circumstances, we uphold the order of the Commissioner of Income Tax (Appeals) in deleting the penalty. - Decided in favour of assessee. - ITA No. 2213/Mds/2014 - Dated:- 20-3-2015 - A. Mohan Alankamony, AM And Challa Nagendra Prasad, JM,JJ. For the Appellant : Mr A V Sreekanth, J .....

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e processing centre. The assessee deposited such money in the bank and earned interest of ₹ 35,37,947/- on the Government subsidy. During the assessment year under consideration, the assessee was in the process of setting up of textile processing centre incurred expenditure amounting to ₹ 70,13,221/-. The assessee filed return of income and in the computation interest received on subsidy which was deposited in the bank was claimed set off against the expenditure incurred by the asses .....

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ion 271(1)(c) of the Act and in reply to the show cause notice, assessee submitted that assessee has not concealed income or furnished inaccurate particulars and its claim was based on certain case laws, therefore requested to drop the penalty proceedings. However, the Assessing Officer passed order under section 271(1)(c) of the Act, levying penalty holding that assessee has concealed income by setting off interest against expenditure. On appeal, Commissioner of Income Tax (Appeals) deleted the .....

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r the assessee strongly supports the order of Commissioner of Income Tax (Appeals) in deleting the penalty and submits that there is no concealment of income or furnishing of inaccurate particulars of income and the claim was made based on the judicial pronouncements. 5. Heard both the sides. Perused orders of lower authorities. The Assessing Officer levied penalty holding that there is concealment of income as the assessee has set off of interest income from subsidy against the expenditure befo .....

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or to commencement of business can be set off against expenditure. Further, the Commissioner of Income Tax (Appeals) observed that the Delhi High Court in the case of CIT Vs. Mushashi Autoparts India Pvt. Ltd. (330 ITR 545) held as under:- "In the case where assessee computed the preoperative expenses after deducting interest and showing in balance sheet filed along with return of income and Assessing Officer holding that interest cannot be adjusted against pre-operative expenses does not m .....

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