TMI Blog2020 (1) TMI 1110X X X X Extracts X X X X X X X X Extracts X X X X ..... :- The assessee in the present case has filed his revised return of income dated 18-04-2011 claiming the deduction of the aforesaid amount whereas the judgment of CIT vs. Gujarat State Road Transport Corporation [ 2014 (1) TMI 502 - GUJARAT HIGH COURT] . Thus it is evident that, the assessee was not aware of the judgment relied by the learned CIT (A) while imposing the penalty on account of concealment of income. We also note that the judgment of Hon ble Delhi High Court in the case of AIMIL Ltd [ 2009 (12) TMI 38 - DELHI HIGH COURT] was in favour of the assessee which was rendered dated 23-12-2009 i.e. before filing the return of income by the assessee. Accordingly, we find that the assessee has claimed the deduction under the bona fides believe. Hence, we hold that the assessee cannot be visited with the penalty in the given facts and circumstances on account of concealment of income. Disallowance of interest expenses being capital in nature - HELD THAT:- There is no allegation that the impugned interest expense was incurred in connection with the extension of the existing business of the assessee. Therefore, the mere claim of interest expenses as revenue in nature cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) arising in the matter of penalty order passed under s.271(1)(c) of the Income Tax Act, 1961 (here-in-after referred to as the Act ) dt.15/03/2013 relevant to the Assessment Year 2010-2011. The assessee has raised the following grounds of appeal. 1. The C. I. T. (Appeals) erred in law and on facts in confirming the penalty u/s.271(l)(c) of the I.T. Act, 1961 without appreciating the facts and law properly on the following additions: (i) Disallowance of ₹ 91,726/- being payment of consolidated tax u/s.43B (ii) Disallowance of ₹ 2,97,572/- u/s.36(l)(v) being delayed payment of ESI and PF (iii) Disallowance of ₹ 1,530/- u/s.36(l)(iii) being interest paid on purchase of capital goods. (iv) Disallowance of ₹ 14,500/- u/s.37 being penalty paid to Sales Tax and Excise Department. The appellant reserves its right to add, amend, alter or modify any of the grounds stated hereinabove either before or at the time of hearing. 2. The interconnected issue raised by the assessee in all the grounds of appeal is that the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 43B of the Act. iii. Accordingly, the assessee argued that it has claimed the deduction for the consolidated tax expenses under the bona fides believe. b. Regarding the disallowance of ₹ 2,97,572.00 under section 36(1)(v) of the Act on account of delayed payment of ESI and PF i. The assessee submitted that the deduction was claimed under the bona fides believe after placing reliance on the judgment of Hon ble Delhi High Court in the case of AIMIL ltd reported in 188 taxman 265. Therefore, the assessee should not be visited with the penalty. c. Regarding the disallowance of interest expenses of ₹ 1530.00 being capital in nature i. The assessee under the bona fides believe claimed the interest expenses incurred on the money borrowed for the acquisition of capital asset as revenue expenditure. As such, all the details of the interest expenses were duly disclosed in the financial statements. Therefore there cannot be any penalty on account of concealment of income. d. Regarding the disallowance of ₹ 14,500.00 on account of penalty payment to Sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c. Regarding the disallowance of interest expenses of ₹ 1530.00 being capital in nature i. The assessee submitted that there is nothing on record suggesting that the assessee has concealed the income/furnished inaccurate particular of income by claiming the interest expenses as revenue in nature. ii. However the learned CIT (A) disregarded the contention of the assessee by observing that such interest expenses being capital nature cannot be claimed as deduction in the profit and loss account. Accordingly, the learned CIT (A) upheld the order of the AO. d. Regarding the disallowance of ₹ 14,500.00 on account of penalty payment to Sales tax and Excise department i. The assessee before the ld. CIT-A submitted that it has incurred the impugned expenses in the course of the business which were wrongly classified as penalty under the accounting head. The assessee further submitted that the contrary view taken by the AO for making the addition does attract the penalty. ii. However, the learned CIT (A) disregarded the contention of the assessee by observing that the penalti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that, the assessee was not aware of the judgment relied by the learned CIT (A) while imposing the penalty on account of concealment of income. We also note that the judgment of Hon ble Delhi High Court in the case of AIMIL Ltd was in favour of the assessee which was rendered dated 23-12-2009 i.e. before filing the return of income by the assessee. Accordingly, we find that the assessee has claimed the deduction under the bona fides believe. Hence, we hold that the assessee cannot be visited with the penalty in the given facts and circumstances on account of concealment of income. c. Regarding the disallowance of interest expenses of ₹ 1530.00 being capital in nature i. The provisions of section 36(1)(iii) mandates to make the disallowance of the interest expenses incurred on the acquisition of assets in connection with the expansion/extension of existing business provided such asset was not put to use. The relevant provision as applicable for the year under consideration reads as under: Other deductions. 36. (1) The deductions provided for in the following clauses shall b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curate particular of income. However, from the preceding discussion we note that none of the deduction claimed by the assessee has been held as false. Thus at the most, the claim made by the assessee can be wrong/inaccurate claims which cannot be treated as concealment/inaccurate particular of income. In holding so we find support and guide from the judgment of Hon ble Supreme Court in case of Reliance Petro Products Pvt. Ltd. reported in 322 ITR 158 where it was held as under: The word 'particulars' must mean the details supplied in the return, which are not accurate, not exact or correct, not according to truth or erroneous. In the instant case, there was no finding that any details supplied by the assessee in its return were found to be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty under section 271(1)( c). A mere making of the claim, which is not sustainable in law by itself will not amount to furnishing of inaccurate particulars regarding the income of the assessee. Such claim made in the return cannot amount to the inaccurate particulars. iii. We also note that there w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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