TMI Blog2015 (2) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... es laid down in the case of Reliance Petro Products Ltd vs. CIT (2010 (3) TMI 80 - SUPREME COURT) equally applies to this as it is only a mere disallowance under provisions of section 43B which resulted in an addition. On these facts of the case, there is neither a concealment of income nor furnishing of inaccurate particulars. Assessee cannot be faulted if the Bank adjusts the amounts towards principal but not towards interest. In these circumstances, assessee’s explanation/actions can be considered as bonafide and accordingly, we are of the opinion that there is no scope for levy of penalty under section 271(1)(c). - Decided in favour of assessee. - ITA.No.717/Hyd/2013 - - - Dated:- 28-8-2014 - SHRI B. RAMAKOTAIAH AND SMT. ASHA VIJAYAR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, it turned out that the bank has adjusted only an amount of ₹ 83,51,790 towards interest and balance towards principal, therefore, discrepancy arose. It was submitted that assessee has provided interest in the books of accounts on the basis of the letters received from the bank and also paid the amount to the bank. The discrepancies if any, in respect of adjustments of the amount and disallowance under section 43B to an extent of ₹ 2,07,04,078, does not call for any penalty under section 271(1)(c). Assessee relied on various case law, including that of Hon ble Supreme Court in the case of Price Water House 348 ITR 306(SC). 2.2. Ld. CIT(A), however, discussed various case other case law and came to a conclusion that e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulars Vch.Type Vch.No. Debit Credit 20.03.08 Cr. Interest payable Exim Bank Being the interest payable to Exim Bank Loan 04/T601/DO Journal 290 34.42.695.00 Cr. Interest payable Exim Bank Being the interest payable to Exim Bank Loan 07/T601/A.O. Journal 291 32,22,656.25 Cr. Interest payable Exim Bank Being the interest payable to Exim Bank Loan 04T601DO Journal 292 86,24,998.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Balance 2,40,41,206.42 2,40,41,206.42 2,40,41,206.42 3.2. Thus, as can be seen from the entries made in the books of accounts, there is basis for providing an amount of ₹ 2,40,41,206 as interest payable on Exim Bank loans by the assessee. 3.3. There is no dispute with reference to the fact that assessee had paid an amount of ₹ 5,40,67,680 during the period up to 30.09.2008. Assessee has treated most of the amount repaid towards interest in its books. Therefore, no amount was disallowed under section 43B. On enquiry by the A.O. the B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 43B, such disallowance, in our view, does not call for any levy of penalty. 3.5. Ld. CIT(A) has taken great pains in analyzing various case law wherein the penalty was confirmed. However, the facts in each case are not similar to the assessee case. He has relied on cases where there are disclosures in survey, filing of revised returns etc., which are not applicable to the facts of the case. Therefore, we do not intend to discuss all the case law. Suffice to say that the orientation of the Ld. CIT(A) seems to establish that assessee has deliberately made a false claim. We are unable to understand what is the false claim. As far as the claim of interest is concerned, there is no dispute with reference to assessee obtaining loans ..... X X X X Extracts X X X X X X X X Extracts X X X X
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