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M/s. M.V. Logistics Pvt. Ltd. Versus The Income Tax Officer, Ward-16 (1) New Delhi

2017 (9) TMI 732 - ITAT DELHI

Penalty u/s 271(1)(c) - reopening of assessment - disallowance of interest on loans - Held that:- It is a fact that in the reasons for reopening of the assessment, A.O. has mentioned a very small amount of interest of ₹ 61,063. Therefore, even the A.O. was not aware of the exact amount to the extent of which income has escaped assessment. The A.O. merely on vague and inaccurate figure reopened the assessment. Therefore, nothing could be detected against the assessee specifically at the sta .....

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sessee. 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 For The Revenue : Shri T. Vasanthan, Sr. D.R. ORDER Both the appeals of assessee are directed against the different orders of the Ld. CI .....

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issues are same in the remaining appeal for the A.Y. 2011-2012. The appeal for A.Y. 2009-2010 is decided as under. ITA.No.2662/Del./2017 - A.Y. 2009-2010 : 3. Briefly the facts of the case are that the assessee filed its return of income on 30.09.2009 declaring income of ₹ 4,70,490. During the course of assessment proceedings for subsequent A.Y. 2010-2011 in the case of the assessee, it was observed that assessee is continuously claiming interest expenses on loan taken from various financ .....

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n 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 unde .....

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ssment order. 3.1. The A.O. in the penalty order noted the same facts and also noted that assessee declared additional income of ₹ 31,88,093 in response to notice under section 148 of the Act. The assessee has declared the additional income when same income was unearthed by the department. The A.O. accordingly, levied the penalty on this addition. The assessee challenged the penalty order before the Ld. CIT(A). the Ld. CIT(A) dismissed the appeal of assessee for nonprosecution as well as o .....

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n 271(1)(c) of the I.T. Act, penalty have been initiated against the assessee. 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 Dece .....

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de Judgment dated 23rd November, 2015, confirmed the order of the Tribunal, in which the Tribunal has allowed the appeal filed by assessee holding that notice issued by A.O. under section 274 read with section 271(1)(c) of the Act, to be bad in law as it did not specify under which limb of Section 271(1)(c) of the Act, the penalty had been initiated i.e., whether for concealment of the particulars of income or for furnishing inaccurate particulars of such income. The Tribunal relied upon the dec .....

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hat A.O. recorded the reasons for reopening of the assessment vide reasons dated 30th April, 2013, copy of which is filed at page-32 of the paper book in which the A.O. recorded interest payment of ₹ 61,063, on which, interest is to be disallowed. He has submitted that assessee filed the return of income in response to 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 .....

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in which it was held that merely because assessee has claimed expenditure which claim was not accepted or was not acceptable to the Revenue, that by itself, would not attract penalty under section 271(1)(c) of the I.T. Act, 1961. He has also submitted that assessee declared complete particulars in the return of income. Therefore, the disallowance under section 40(a)(ia) of the I.T. Act being a debatable issue, no penalty is leviable. He has submitted that no amount have been mentioned in the re .....

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