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2018 (4) TMI 1352 - ITAT DELHIDenying the exemption u/s 10B - return of income not filed on or before the due date specified under section 139(1) - Held that:- We are of the view that authorities below correctly denied the exemption under section 10B to the assessee because original return under section 139(1) was not filed within the period prescribed under section 139(1). Therefore, provisions of Section 10B(1) Proviso (3) will apply against the assessee. On this ground itself assessee would not be entitled for deduction. Disallowance u/s 14A - Held that:- The assessee has own sufficient funds which are more than the investment made by the assessee. Therefore, no interest is to be disallowed. Further, A.O. has not made out a case if any borrowed funds have been used for the purpose of making investment to earn exempted income. In the absence of any nexus between the borrowed funds and the funds invested to earn exempt income, the disallowance of interest is not permissible. Set aside the orders of the authorities below and delete the addition of ₹ 2,19,610/-. As regards the balance amount of ₹ 47,053/-, Learned Counsel for the Assessee did not make further submissions considering it to be a small amount. This part of ground is accordingly dismissed. Levy of penalty u/s 271(1)(c) - Held that:- In the penalty order the A.O. did not specify which limb of Section 271(1)(c) penalty have been levied i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. It is well settled that penalty is not automatic and need not be imposed in each and every case. The facts and circumstances shall have to be considered. Considering all it is not a fit case of levy of penalty. - Decided in favour of assessee.
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