TMI Blog2017 (9) TMI 732X X X X Extracts X X X X X X X X Extracts X X X X ..... 31,88,093 on account of disallowance of interest on loans. Therefore, the assessee made full disclosure without there being anything detected against the assessee and as such, it may be a bonafide mistake of the assessee in not declaring the total disallowance of interest in the original return of income. Therefore, on such facts, penalty cannot be leviable against the assessee. Merely because assessee had claimed expenditure, which it was not acceptable to the Revenue, that by itself would not attract levy of penalty under section 271(1)(c) of the I.T. Act - Decided in favour of assessee. - ITA.No.2662 And 2663/Del./2017 - - - Dated:- 13-9-2017 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER For The Assessee : Shri Akhilesh Kumar, Advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 148. The assessee revised the return by declaring income of ₹ 36,58,583 on 13th May, 2014. In the return now filed, assessee has added back interest on loan of ₹ 31,88,093 (Rs.18,29,533 + ₹ 13,58,560). The assessee requested for copy of the reasons recorded which were supplied by the A.O. Assessee while filing the return of income under section 148 has admitted the additional income by way of disallowing the interest. The A.O. however, noted that the disallowance of interest is not voluntary but after the act of the department only. Therefore, fresh disclosure of the income was not voluntary and assessee is liable for penalty under section 271(1)(c) of the Act. It was also found that assessee has huge cash in hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, penalty is liable to be cancelled on this ground itself. He has relied upon the decision of Hon ble Karnataka High Court in the case of CIT vs. Manjunatha Cotton Ginning Factory (2013) 359 ITR 565 (Kar.). 5. The Ld. D.R. on the other hand, relied upon the orders of the authorities below. 6. I have considered the rival submissions. It is not in dispute that A.O. in the show cause notice dated 30th December, 2014, has not recorded as to under which limb of Section 271(1)(c) of the Act, penalty have been initiated against the assessee. Even the A.O. in the assessment order has mentioned that penalty under section 271(1)(c) of the Act, are initiated separately for furnishing inaccurate particulars of such income, thereby, co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice under section 148 on 13th May, 2014, declaring therein the additional income of ₹ 31,88,093 on account of disallowance of interest which was even not within the knowledge of the Revenue department. Therefore, nothing has been detected against the assessee for levy of the penalty. He has submitted that later on, A.O. supplied the copy of the reasons recorded under section 148 but prior to that assessee had already declared the additional income by disallowing the interest. He has relied upon several judgments in support of his contention including the judgment of Hon ble Supreme Court in the case of CIT vs. Reliance Petro Products Pvt. Ltd., 322 ITR 158 in which it was held that merely because assessee has claimed expenditure wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be a bonafide mistake of the assessee in not declaring the total disallowance of interest in the original return of income. Therefore, on such facts, penalty cannot be leviable against the assessee. Merely because assessee had claimed expenditure, which it was not acceptable to the Revenue, that by itself would not attract levy of penalty under section 271(1)(c) of the I.T. Act. Considering the above discussion, I am of the view that no penalty is leviable on the facts and circumstances of the case. The Penalty is accordingly cancelled. 10. In the result, ITA.No.2662/Del./2017 for the A.Y. 2009- 2010 is allowed. ITA.No.2663/Del./2017 A.Y. 2011-2012 : 11. The issue is same as is considered in A.Y. 2009-2010 above. Followin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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