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TMI Blog2022 (10) TMI 1115X X X X Extracts X X X X X X X X Extracts X X X X ..... he instant case, the assessment order u/s. 143(3) of the Act was passed on dated 31.12.2017, whereby the income of the Assessee was determined at Rs.(-)30,76,835/- instead of Rs.(- )38,88,990/- as declared by the Assessee. The Assessing Officer also made the addition of Rs.8,10,000/- u/s. 68 of the Act on account of unexplained cash credit in bank accounts of the directors advancing the share application money to the Assessee just before advancing the share application amount. The Assessing Officer further made disallowance of Rs.2155/- on account of interest on TDS. 2.1 The Assessing Officer also initiated penalty proceedings u/s. 271(1)(c) of the Act for furnishing of inaccurate particulars of income and concealing of particulars of inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and the amount was received through account payee cheques or banking channel. Both the applicants are directors/promoters of the company. During the assessment proceedings, the Assessee filed confirmation letter, bank passbook, identity proof and source of funds in the hands of depositors. Both the directors were also produced before the Assessing Officer and their statements on oath were recorded. In the statements, both the directors admitted lending to Assessee Company in the shape of share application. Fund was utilized for business purposes to make payments to creditors and arranged by the directors, so genuineness of the transaction was proved. The Assessing Officer added Rs.8,10,000/- in the hands of the Assessee, as this amount w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of cash deposit component of the share application money and deleted the penalty of Rs.647/- imposed qua disallowance of Rs.2155/- towards interest on TDS by concluding as under : "7.1 In the case of CIT v Zoom Communication (P) Ltd [2010] 191 Taxman 179 (Delhi) Hon'bie High Court of Delhi has held as under: 19. It is true that mere submitting a claim which is incorrect in law would not amount to giving inaccurate particulars of the income of the assessee, but it cannot be disputed that the claim made by the assessee needs to be bona fide. If the claim besides being incorrect in law is mala fide, Explanation 1 to section 271( 1) would come into play and work to the disadvantage of the assessee. 20. The Court cannot overlook t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her to the Income-tax authorities or to the Income-tax Appellate Tribunal as to in what circumstances and on account of whose mistake, the amounts claimed as deductions in this case were not added, while computing the income of the assessee-company. We cannot lose sight of the fact that the assesses is a company which must behaving professional assistance in computation of its income, and its accounts are compulsorily subjected to audit. In the absence of any details from the assessee, we fail to appreciate how such deductions could have been left out while computing the income of the assessee-company and how it could also have escaped the attention of the auditors of the company. 22. The explanation offered by the assessee-company was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot accept the general proposition that no person would ever claim the amount of Income-tax as a deduction with a view to avoid payment of tax. No hard and fast rule in this regard can be laid down and every case will have to be decided considering the facts and circumstances in which such a deduction is claimed, coupled with as to whether the explanation offered by the assessee for making the claim, is shown to be bona fide or not. 24. For the reasons given in the preceding paragraphs, we answer the question of law framed in this case in favour of the revenue and against the assessee. The Income-tax Appellate Tribunal erred in law in deleting the penalty in respect of the amount of Rs. 1 lakh claimed as deduction on account of payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lars of its income and has concealed its income to the extent of Rs. 8,12,155/-. The AO has noted that this is a fit case for imposition of penalty for concealment of income and for furnishing inaccurate particulars of income amounting to Rs.8,12,155/- as per the provisions of Sec 271(1)(c) of the Act. I have carefully considered the facts of the case. The decision of Hon'ble High Court of Delhi in the case of CIT v Zoom Communication (P) Ltd (supra) is squarely applicable to the facts of the case. Respectfully following the decision of Hon'ble High Court of Delhi in the case of CIT v Zoom Communication (P) Ltd (supra), I hold that the AO is justified in levying penalty u/s 271(1)(c) on the amount of Rs. 8,10,000/- pertaining to the cash de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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