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2016 (4) TMI 114 - ITAT DELHI

2016 (4) TMI 114 - ITAT DELHI - TMI - Penalty u/s. 271(1)(c) - non deduction of tds u/s 194A - Held that:- The assessee made a claim but the same was rejected and disallowed not for the reason that the claim was fabricated, but keeping in view the statutory provision of law that the assessee did not deduct TDS thereon. It, therefore, can hardly be said that the assessee had furnished inaccurate particulars of income entailing penalty u/s. 271(1)(c) of the Act. The assessee had offered bona fide .....

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eliance Petroproducts Ltd. [2010 (3) TMI 80 - SUPREME COURT] which do not stand rebutted on behalf of the Revenue. We, therefore, find no justification to interfere with the order of the ld. CIT(A). Accordingly, the appeal of the Revenue is found to have no merits and is liable to fail - Decided in favour of assessee - ITA No. 6014/Del./2013, C.O. No. 133/Del/2014 - Dated:- 15-2-2016 - SHRI C.M. GARG, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER For The Assessee : Sh. Rakesh Gupta, Advo .....

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acts, leading to the present case, are that the assessee had paid interest to ONGC amounting to ₹ 55,47,123/- without deducting tax on interest payments (TDS) as required under section 194A of the Act. Therefore, disallowance of impugned interest was made u/s. 40(a)(ia) of the Act and was added to the total income of the assessee. This addition stood sustained upto the stage of ITAT in the case of assessee. Consequent upon this, the Assessing Officer initiated penalty proceedings for furni .....

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-deduction of tax at source was bona fide and that the factum of non-deduction of tax on the interest payment was brought to the notice of Department at the time of filing of return itself by way of disclosure as appendix D (I) in Tax Audit Report u/s. 44AB. He therefore, deleted the penalty imposed for furnishing inaccurate particulars of income. Aggrieved by the impugned order, the Revenue is in appeal before us. 3. The ld. Departmental Representative, reiterating the contents of the penalty o .....

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g the penalty. He, therefore, urged for sustenance of penalty imposed by Assessing Officer. 4. Repudiating the contentions of the ld. DR, the ld. Counsel for the assessee contended that the respondent has never concealed the particulars of income nor furnished inaccurate particulars of income. Satisfactory explanations were offered by the respondent both at the assessment stage as well as penalty stage before the AO for non-deduction of tax on the interest paid to ONGC. It was submitted that bon .....

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authorities below. He, therefore, urged for sustenance of impugned order of ld. CIT(A), deleting the penalty imposed. Reliance is placed on the following decisions : (i). CIT vs. AT & T Communication services India (P) Ltd., 342 ITR 257 (Del.). (ii). CIT vs. Dahyabhai Veljibhai Patel (ITA No. 793 of 2013) Gujrate High Court. (iii). ACIT vs. M.V. International Ltd.(ITA No. 1451/Kol/2012) ITAT Kolkata Bench. (iv). Ramkrishna Shetty vs. ACIT(2013) 38 CCH 20-ITAT Mumbai Bench. (v). ACIT vs. Seaw .....

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eal of the Revenue. In this appeal, the only question which needs adjudication is whether the disallowance of interest due to mere nondeduction of tax at source, would amount to furnishing of inaccurate particulars on the part of respondent or not. A deep delve into the record shows that in the assessment proceedings itself, it was explained that the respondent did not deduct tax at source u/s. 194 owing to assurance of the payee company that they will pay the tax on the part of this income, as .....

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GC was declared to the Department at the very time of filing of return itself by way of disclosure as appendix D (I) in Tax Audit Report u/s. 44AB. In the penalty proceedings also, the respondent had explained that the ONGC has shown the interest income in their P & L Account for taxation purpose and the company is a Govt. of India Co. as defined in section 617 of the Companies Act, 1956. All these facts, in our considered opinion are suffice to form a bona fide belief, which led the respond .....

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