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TMI Blog2018 (8) TMI 1646X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, 83, 582/- by the ld. CIT(A) which was denied by the AO, while ITA No. 2520/Ahd/2014 is filed to challenge deletion of penalty imposed by the AO under section 271(1)(c) of the Income Tax Act, 1961. 4. Before taking up the above appeals of the Revenue, the ld. counsel for the assessee vehemently contested maintainability of the above three appeals filed by the Revenue before the Tribunal in view of recent CBDT circular no. 3 of 2018 whereby the Board has instructed the Revenue not to file appeal before the Tribunal where tax effect is below Rs. 20 lakhs. Though the ld. DR did not dispute this preliminary objection of the ld. counsel for the assessee, left issue to the Bench decide these appeals in accordance with law. 5. After hearing both the sides on preliminary issue and on perusal of the record, we find that on 8. 7. 2018 the CBDT has issued Instructions bearing No. 3 of 2018 under file No. F. No. 279/Misc. 142/2007-ITJ(Pt) prohibiting its subordinate authorities from filing of appeal to the Tribunal against order of the CIT(A) where the tax effect by virtue of the relief given by CIT(A) is less than Rs. 20 lakhs. The instructions have been made applicable with retrospective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, hence, it is rejected. 9. Ground no. 4: In this ground of appeal, grievance of the assessee is that the ld. CIT(A) has erred in calculating the interest expenses at Rs. 8, 44, 577/-. The ld. counsel for the assessee at the very outset submitted that a disallowance of Rs. 26, 83, 618/- was made on the ground that the assessee has used interest bearing fund for earning tax free income. On appeal, the assessee submitted calculation before the ld. CIT(A), which has been accepted by the CIT(A). But while quantifying the amount, the ld. CIT(A) has confirmed disallowance of Rs. 8, 44, 577/-. In fact this disallowance should be Rs. 84, 577/-. 10. With the assistance of the ld. representatives, we have gone through the record. There is no dispute with regard to the fact that interest expenditure incurred for earning of tax free income deserves to be disallowed. The assessee has submitted the details and quantified the interest expenditure which has been reproduced by the ld. CIT(A) at page no. 24 of the impugned order. Such details read as under: "This investment is made from the internal accruals, which consists of interest free funds. Therefore, no disallowance shall be made on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exempt income and has also computed the interest attributable to this. Such interest is Rs. 8, 44, 577/-only. The appellant had provided full details of funds used for investment and its sources to the AO during the course of assessment proceedings. Hence, the AO is directed to restrict the disallowance u/s. 14A to Rs. 8, 44, 577/-" 12. Considering the above finding of the ld. CIT(A), we are of the view that there is no justification or supporting evidence in favour of the calculation of Rs. 8, 44, 577/-. From the submission of the assessee it reveals that it was a sum of Rs. 84, 577/- which has been in principle accepted by the CIT(A). Therefore, we allow this ground of appeal partly and confirm addition to the extent of Rs. 84, 577/-. Appeal of the assessee is accordingly partly allowed. 13. Now we take up the ITA No. 2485/Ahd/2014. 14. This appeal is directed at the instance of the assessee against the order of the ld. CIT(A) dated 16. 6. 2014 passed for the Asstt. Year 2000- 01. Grievance of the assessee is that the ld. CIT(A) has erred in confirming the penalty of Rs. 26, 81, 000/- under section 271(1)(c) of the Act. 15. Brief facts of the case are that the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. 2011 set aside issues back to the file of the Assessing Officer for fresh adjudication by giving opportunity of the assessee. Accordingly, the ACIT, Cir. 4, Baroda issued the notice u/s 142(1) on 31. 08, 2012 and on 03, 10, 2012 for going ahead in the issues set aside by ITAT. After given an opportunity of being heard, the assessment u/s 143(3) r. w. s. 254 of the Act was decided on 04. 01. 2013, The assessing officer in the re assessment order observed that the assesses could not justify its claim again on the second round. The assessing officer made the similar additions on both the above issues and initiated penalty proceedings u/s 271(1)(c). Notice u/s 274 r. w. s. 271(i)(c) of the Act was issued on 04. 01. 2013 & was served upon the assessee. Again on 16. 07. 2013 a notice u/s 271(1) (c) was issued upon the assessee by my predecessor. On 19. 07. 20 J. 3, the undersigned issued notice u/s 271(l)(c) r. w. s 129 of the Act. Opportunity of being heard was offered. In response, the assessee furnished the submission on 22. 07. 2013 signed by authorized signatory which scanned & pasted as under: **** **** 1. 2. From the above submission it can be gleaned that no contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t required to be established. Prom the facts of the case and the submission made by the assessee, it is very clear that the assessee has deliberately concealed the particulars of unaccounted income and is guilty of the contumacious conduct The assessee has failed to give any justification or acceptable explanation for charging of concealment In the circumstance, I hereby levy penalty of Rs. 26, 81, 000 [being 100% of the tai: sought to be evaded on the amount of Rs. 69, 61, 227 (Rs. 42, 77, 609 + Rs. 26, 83, 618/-)as minimum penalty as against the maximum Rs. 80, 43, 000 for furnishing inaccurate particulars of its income leading to concealing the particulars of income. 1. 4. This order is passed with the prior approval of the Addl. C. J. T, Range -4 Baroda as required by the provisions of section 274 (2)(b) of the Act under his approval dated 24. 07. 2013 conveyed under his No. BRD / AddLCIT / R. 4 / Penalty Approval/2013-14. " 18. It is pertinent to observe that in this year, the ld. AO considered two amounts for calculating penalty under sub-clause (iii) of section 271(1)(c). These amounts are disallowance of interest amounting to Rs. 42, 77, 609/- out of capitalizati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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