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2012 (1) TMI 24 - DELHI HIGH COURTPenalty for concealment u/s 271(1)(c) – Business of money-lending – share application money deposited converted into loan in A.Y. 98-99 – non-acknowledgement of debt by receiver company(DISL) – no interest charged on such converted loans – wrote off loan as bad debts – deduction of bad debts disallowed by Department – Held that:- Though assessee furnished the director’s report, the actual write off, filing of balance sheets, memorandum and articles of association, letter to DISL etc. however, the assessee did not bring to the notice of the A.O. that no interest from the converted loan had been offered and assessed to income tax in any of the earlier previous years. If no interest was charged the amount cannot be considered as a money lending advance since the essence of money lending business is the charging of interest. When one of the important conditions for the allowability of bad debt u/s 36(2)(i) was not satisfied and the same was within the knowledge of the assessee, it was duty bound to disclose the same in order to show its bonafide. The particulars furnished by the assessee were thus not complete, and were, therefore, inaccurate. Order of the Tribunal restoring the penalty is upheld. - Decided against the Assessee.
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