9911796707
TMI Blog2016 (7) TMI 1532X X X X Extracts X X X X X X X X Extracts X X X X ..... hority i.e. The CIT (A) 25, Mumbai, has erred in sustaining penalty u/s 271(1)( c) without appreciating that no such penalty can be sustained in the case of the appellant. The said penalty may therefore kindly be deleted. 2) Your appellant craves leave to add to amend, delete any of the above grounds and / or to add any new grounds thereto." 2. During the course of hearing, it was stated by the ld.counsel of the assessee at the very outset that in this case, order has been passed by the Tribunal in the quantum appeal dt 9-3-2016 in ITA No.535/Mum/2008 wherein most of the additions / disallowances have either been deleted, reduced or remanded back to the file of the AO and, therefore, as on date penalty levied on none of the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders of the lower authorities as well as the order of the Tribunal and submissions made by both the sides. It is noted that this addition has been made by making estimate at all stages. The AO had estimated GP at 9% as against GP of 5.8% disclosed by the assessee; the Ld.CIT(A) adopted 8% whereas the Tribunal has reduced it to 7%. The assessee is aggrieved with the fact that the detailed working submitted by it pointing out fallacies in the estimation done at various stages has been ignored . It is further noted by us that in any case, the addition has been made on estimate basis only. Concealment of income has not been proved by the AO while levying penalty. We do not find any justification to levy penalty on the addition which has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de from his personal account was used to make investment in the above said concern. The AO considered the submissions of the assessee and finally came to the conclusion that the borrowings to the extent of Rs. 33.52 lakhs, representing 14.8% of the borrowed funds have been used for nonbusiness purposes. Accordingly, he disallowed proportionate amount of interest expenditure amounting to Rs. 2,67,127/-. The Ld CIT(A) also confirmed the same. 8. We heard the parties on this issue. From the submissions made by the assessee before Ld CIT(A), we notice that the assessee could not establish one to one nexus between the own funds and the amount diverted to sister concern, but general submissions have been made. When the borrowed funds have not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d been claimed as part of business expenses. Thus, assessee has claimed set off of the expenditure with interest income. Though the Assessing Officer at paragraph 11.7 of the assessment order discussed that the impugned interest income should be assessed as "Income from other sources" u/s 57 of the Act, while making final computation of income, at the conclusion of the assessment order, the aforesaid interest income has been treated as part of business income only. Once the interest income has been treated as part of business income, the interest expenses in full deserves to be allowed as per law; and (c) It is noted that in any case, even if the AOs action of treating the aforesaid interest income as "Income from other sources", i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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