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2016 (7) TMI 751

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....or our consideration: " Whether on the facts and in the circumstance of the case and in law, the Tribunal was justified in deleting the penalty imposed by the Assessing Officer u/s. 13 of the Interest Tax Act 1974 of Rs. 2,00,66,239/without appreciating that quantum additions were confirmed by the CIT(A) and had attained finality and that the assessee knowingly made wrong deduction of interest on the ground that it is not interest within the meaning of section 2(7) of the Interest Tax Act, 1974?". 3. For the subject assessment year, the respondent-assessee filed its interest tax returns, showing chargeable interest at Rs. 4472 Crores. In its return, it also gave details of the interest recovered from its borrowers aggregating to Rs. 91.....

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....of Rs. 2 Crores on the respondent-assessee on account of the interest recovered from the borrowers to the extent of Rs. 91.21 Crores. This merely on the basis that the same has been confirmed in quantum proceedings. 7. In appeal, the CIT(A) by order dated 30th January, 2012 deleted the penalty. This order dated 30th January, 2012 of the CIT(A) was further confirmed by the Tribunal. This on satisfaction that the respondent-asseseee had made complete disclosure of the interest recovered from its borrowers and thereafter claimed deduction of Rs. 91.21 Crores on the ground that it was not interest within the meaning of Section 2(7) of the Interest Act. This view was supported by the decision of the Madras High Court in Bank of Madurai (supra).....