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2018 (11) TMI 1326 - ITAT MUMBAIPenalty u/s 271(1)(c) - short disallowance of interest expenditure under the head ‘Income from Business or Profession’ which led to the claim of increased loss by the assessee in the return of income filed with the Revenue causing prejudice to the Revenue - incorrect claim of expenditure - Held that:- The assessee has also explained that during the year there was a major change in shareholding of the assessee to the tune of 100% which led to triggering of provisions of Section 79 and its accumulated losses lapsed, thus no advantage could be obtained by the assessee in any case by inflating losses as the losses lapsed. It is explained that it was a bonafide human error which occurred while filing return of income due to peculiar circumstances as narrated above which led to claim of higher losses which was a bonafide mistake committed inadvertently due to human error and immediately on being notified by the AO, the assessee rectified the said mistake suo-motu during assessment proceedings. It is explained that under the circumstances, assessee could not have derived any benefit and no loss could have been caused to Revenue owing to higher losses claimed as in any case these losses lapsed being hit by provisions of Section 79 of the 1961 Act. As observed from the audited financial statements filed by the assessee that during the year under consideration, 100% shareholding of the assessee got transferred to Suhani Trading and Investment Consultants Private Limited , which led to triggering of provisions of Section 79 of the 1961 Act leading to lapsing of losses. Thus, this explanation of the assessee is also correct that claiming of the higher losses could not have brought any advantage to the assessee on the face of provisions of Section 79. The ratio of decision in the case of Price Waterhouse Coopers Private Ltd. v. CIT (2012 (9) TMI 775 - SUPREME COURT) is applicable on the factual and circumstantial matrix surrounding this particular case and in our considered view the assessee has furnished bonafide and genuine explanations as to an inadvertent mistake committed by it which was an human error committed while filing its return of income and there cannot be any ulterior motive attached to this error committed by the assessee, which has taken it out from the clutches of penalty under the provisions of Section 271(1)(c) as it is well settled proposition of law that every error committed in filing of return of income cannot be visited with penal provisions as are contained in Section 271(1)(c). - decided in favour of assessee.
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