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2020 (8) TMI 557 - ITAT DELHIPenalty u/s 271(1)(c) - AO determining the loss different as against the returned loss declared by assessee in the return filed on 29.09.2015 - HELD THAT:- Assessee company had taken loan against property from M/s. Hero Fincorp Ltd. and paid interest thereon and capitalized the said expenditure upto the date of acquisition which amounted to ₹ 14,84,895/- but inadvertently in the return ₹ 85,05,595/- was claimed as interest. AO was not convinced with the explanation of assessee merely on the ground that the assessee company was not carrying on any business activity during the year as well as in earlier years, therefore, expenses claimed by it cannot be allowed. Therefore, the Assessing Officer disallowed the total expenses And added back to the income of the assessee. This does not amount to furnishing of inaccurate income or concealment of income as envisaged in Section 271(1)(c) - Assessee has explained before AO and the CIT(A), that the business activity of the assessee is investment in real estate business and the same constitutes the business activity. The Assessing Officer as well as the CIT(A) only proceeded on the basis that there was no income during the year therefore there is no business activity, but the same is fallacy and cannot be taken as the basis for imposing the penalty. Thus, provisions of Section 271(1)(c) are not applicable in the present case. - Decided in favour of assessee.
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