Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (2) TMI 896 - ITAT MUMBAIPenalty u/s 271(1)(c) - disallowance of interest expenditure restricted partly by passing an rectification order u/s 154 - AO rejected the contention of the assessee by observing that the total interest received on loans and advances is less than deduction of interest expenditure u/s. 57(iii) which was claimed which is against the principle of prudency and normal business practice that assessee will pay more interest than interest earned on loans Held that:- AO has invoked principles of prudency and normal business conduct of the tax-payer that no businessman can pay higher interest expenditure than the interest income but the entire aforesaid conclusion arrived at by the AO is based upon conjectures and surmises without bringing on record any cogent incriminating evidences and material on record. It is not the case of the revenue that assessee has not incurred or not paid this interest expenditure of ₹ 31,91,743/- to the persons from whom borrowing were made. Nothing on record by the AO these borrowings were made for reasons other than commercial expediency but merely on conjectures and surmises, the conclusions are drawn by the AO against the assessee. Merely averred by the AO that assessee has paid more interest on unsecured loans raised than what was earned on these loans advanced by the assessee. The findings of the AO may be sufficient to make disallowance in quantum on the theory of preponderance of probabilities but it is not sufficient to fasten and saddle the assessee with penalty provisions as are enshrined u/s. 271(1)(c) of the Act as it could not be said based on the factual matrix of the case that the assessee submitted inaccurate particulars of income while filing return of income with Revenue or any attempt was made by the assessee to conceals its income from Revenue to evade taxes. there is no cogent incriminating material/evidence on record to justify levy of penalty within provisions of Section 271(1)(c) - Decided in favour of assessee.
|