TMI Blog2019 (6) TMI 1286X X X X Extracts X X X X X X X X Extracts X X X X ..... articulars of income. We also find strength from the fact that there was no immediate tax benefit to the assessee by not disallowing the interest expenses in the given facts and circumstances since there was loss in the return of income filed by the assessee. Thus we reverse the order of the authorities below and direct the AO to delete the penalty imposed - Decided in favour of assessee. - ITA No.2150/AHD/2015 - - - Dated:- 14-5-2019 - Shri Mahavir Prasad, Judicial Member And Shri Waseem Ahmed, Accountant Member For the Assessee : Shri S.N. Divetia, A.R For the Revenue : Shri L.P. Jain, D.R ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the Assessee against the order of the Commissioner of Income Tax,(Appeals)-1, Vadodara [Ld.CIT(A) in short], dated 07/05/2015 arising in the matter of assessment order passed under S.143(3) of the Income Tax Act, 1961 (here-in-after referred to as the Act ) dated 05/12/2008 relevant to assessment year (AY) 2006-07. The assessee has raised the following grounds of appeal: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make the payment such interest within the specified due date. Accordingly, the interest expenses claimed by the assessee was disallowed and added to the total income of the assessee. Subsequently, the notice u/s 274 r.w.s 271(1)(c) of the Act was issued upon the assessee for levying the penalty u/s 271(1)(c) of the Act on account of furnishing inaccurate particulars of income. 2.1 The assessee in response to the notice issued u/s 274 of the Act made reply dated 14th July 2014. The details of the reply stand as under; a. The auditor of the company missed giving the effect of the amendment brought in the Finance Act 2003 whereby the payment of interest to the bank was subject to the deduction on actual payment. As such the payment of the interest to the scheduled bank was not covered under section 43B of the Act until such amendment brought in the statute. b. The assessee has already made disallowance of interest expenses payable to financial institutions amounting to ₹ 1,93,10,506/- only. As such there was no reason to make the disallowance of ₹ 1,35,82,000/- in the computation of income. Moreover, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uded that the assessee has not furnished any inaccurate particular of income. 2.6 Even the AO failed to make the disallowances of such interest expenses in the assessment proceedings framed u/s 143(3) of the Act. 3. However, the Ld. CIT (A) was not convinced with the argument of the assessee by observing that had the case of the assessee not been selected under scrutiny, the income of the assessee would have gone tax free. Accordingly, the Ld. CIT (A) upheld the finding of the AO. 4. Being aggrieved by the order of the Ld. CIT (A) the assessee is in appeal before us. The Ld. AR before us filed a paper book running from pages 1 to 73 and reiterated the submissions made before the AO. On the other hand, the ld. DR vehemently supported the order of the authorities below. 5. We have heard the rival contentions of both the parties and perused the materials available on record. The issue in the instant case relates to the penalty under section 271(1) of the Act which was imposed on account of furnishing inaccurate particular of income. The assessee has claimed the deduction for the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15-Dec-97 15-Dec-97 4. LIC 7.51 23.97 31.48 15-Dec-97 15-Dec-97 TOTAL 295.25 1009.96 1305.21 Sr.No. Cash Credits from Banks Principal (in Lacs) Intereset (In Lacs) Total (In Lacs) Default commencing on Principal Interest 1. Bank of India 161.29 523.78 678.72 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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