TMI Blog2015 (12) TMI 611X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO. So when the expenditure made by the assessee which was claimed as an allowable expenditure when disallowed by the AO cannot be termed as concealment or providing inaccurate particulars. Even if assessee firm engages assistance of tax consultants and then for the mistake of tax consultants, the assessee cannot be penalized. In the light of the above facts, we find that the instant case does not merit penalty to be levied against it. Therefore, we are inclined to delete the penalty levied against the assessee. - Decided in favour of assessee. - ITA No.6089/Del./2013 - - - Dated:- 31-7-2015 - SHRI S.V. MEHROTRA, ACCOUNTANT MEMBERand SHRI A.T. VARKEY, JUDICIAL MEMBER For Te Assessee : Shri Anil Malhotra, Advocate For The R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for non-business purposes. Aggrieved by the disallowance, the assessee preferred an appeal to the CIT(A) who upheld the disallowance made by the AO. The assessee thereafter did not prefer any appeal against the impugned quantum appeal, so it has became final. 3.1 Emboldened by the said order of the CIT(A) in quantum appeal of the assessee , thereafter, the AO passed an order u/s 271 (1)(c) of the Act imposing the penalty of ₹ 1,43,376/- i.e. 100% of the tax evaded inter-alia on the grounds that assessee diverted the business loans on which interest was borne by the assessee; no argument was offered that the assessee had not concealed the income; the assessee had not filed any reply; had this point not come to the notice of the AO, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As regards the defence put forward by the AR of the assessee, which had a bearing on the factual aspects of the case, the same were meticulously considered by me. It was the case of the appellant that it was under the bonafide belief that the interest expenditure amounting to ₹ 4.64 lakhs did qualify for deduction regardless of the fact that the interest expenditure so incurred was attributable to loans which were given free of interest out of the interest bearing funds by the appellant hence, a matter of honest difference of opinion between the appellant and the Assessing Officer. Hence, no question of concealment or furnishing of inaccurate particulars of income existed. The above submissions of the assessee did not seem to hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e matter penalty order imposing levy of ₹ 1,43,376/- is sustained. 4. The assessee, being aggrieved against the order of the CIT (A), is in appeal before us. 5. Ld. AR contended that according to the AO, interest is not levied on debited entries. Ld. AR submitted that since the assessee was not charging any interest, notional interest has been disallowed in assessment order. Ld. AR submitted that the CIT (A) has confirmed the addition made by the AO in the quantum appeal and the penalty has been levied because the quantum appeal has been confirmed by the CIT (A). However, it has been brought to our notice by the ld. AR that the assessee did not prefer an appeal before the ITAT in respect to quantum. Ld. AR also brought to our n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iny assessment was done, it came to the notice of the revenue that assessee had given interest free loans and was paying interest on the borrowed capital and since the firm is assisted by tax consultants, it cannot be presumed that the assessee was not aware of the provisions of law. Therefore, he mulct the penalty. On appeal, the ld. CIT (A) was of the opinion that it was the assessee s duty to assist and advise the auditors on the business aspects and according to him, in the instant case, the claim of interest expenditure which was not eligible for deduction as per law does go to show that by some positive act of omission commission the income was sought to be concealed by claiming the full amount of interest payable on the unsecured l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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