TMI Blog2013 (9) TMI 1125X X X X Extracts X X X X X X X X Extracts X X X X ..... planation as to what was the bonafide ground and reasons for claiming such a deduction and if such an explanation has not been found to be false, the penalty cannot be levied. In this case, it cannot be held that the assessee has furnished any kind of inaccurate particulars because all the details were duly furnished along with the return of income and simply because such a claim was not allowed in the subsequent proceedings, it cannot be held that the assessee is guilty of furnishing of inaccurate particulars of income. - Decided in favour of assessee. - INTT. TAX APPEAL no. 1/Mum./2012 - - - Dated:- 13-9-2013 - SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER Assessee by : Ms. Aarti Vissanji Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the same is chargeable to interest tax as per the provisions of section 6. Thereafter, the assessee had preferred an appeal before the learned Commissioner (Appeals) which was confirmed vide order dated 14th May 2008. 3. In the penalty proceedings under section 13, the assessee, before the Assessing Officer, submitted and stated as under: We had claimed the deduction of interest-tax recovered from the borrowers as the same is not interest within the meaning of section 2(7) o the Act and hence ought to be excluded from the interest chargeable to tx. This has been consistently c/aimed by us as per the decision of the Madras High Court in the case of CIT v. Bank of Madurai (215 ITR 928). Our claim for the aforesaid deduction was b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he borrowers was made on the ground that the same is not interest within the meaning of section 2(7) and such a contention was supported by the decision of Hon'ble Madras High Court in CIT v/s Bank of Madurai, [1995] 215 ITR 928 (Mad.). It was further submitted that there was no concealment of income or furnishing of incorrect particulars of income because there was a possible view given by the Madras High Court and also that the Assessing Officer has levied penalty on the ground that provisions of income tax is to be included in the total income and has nothing to do with the chargeable interest. In any case, the assessee was liable for deduction from the total income while computing the income under the Income Tax Act, 1961 and the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Since in assessee s case, the issue was decided against by the learned Commissioner (Appeals) at a much subsequent date and earlier the assessee s claim was supported by the High Court decision, therefore, in such a situation, penalty cannot be levied. Reliance was also placed on various decisions including that of the decision of Hon'ble Supreme Court in CIT v/s Reliance Petroproducts Pvt. Ltd. [2010] 322 ITR 158 (SC). 7. The learned Commissioner (Appeals) rejected the assessee s contention and held that in the quantum proceedings, the learned Commissioner (Appeals) has decided the issue against the assessee and in the earlier years, in similar re opening of the case, the learned Commissioner (Appeals) has confirmed this issue whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the quantum proceedings, the matter has been decided against this cannot be the sole ground for confirming the penalty. 9. On the other hand, the learned Departmental Representative strongly relied upon the order of the learned Commissioner (Appeals) and submitted that once a claim for deduction itself is not tenable in law then it amounts to furnishing of inaccurate particulars and, therefore, the penalty has rightly been levied by the Assessing Officer and confirmed by the learned Commissioner (Appeals). 10. We have heard the rival contentions, perused the findings given by the Assessing Officer and the learned Commissioner (Appeals) as well as the material available on record. It is undisputed fact that the assessee has disclosed t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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