2007 (11) TMI 629 - AT - Income Tax

Summary

Issues involved: Appeal against orders of CIT(A) for assessment years 1996-97 to 1998-99 regarding penalty u/s 271(l)(c) on disallowance of motor car hire charges and interest expenses.

Interest Expenses Issue:
During assessment, assessee provided share application money to sister concern from loan account, without interest charged. Assessing Officer found nexus between interest paid on loan and money given to sister concern. Disallowance of interest claimed in P&L A/c was made. CIT(A) deleted disallowance. Tribunal upheld Assessing Officer's order. Penalty u/s 271(1)(c) imposed. CIT(A) cancelled penalty, stating no concealment of income, as all primary facts disclosed. Tribunal upheld CIT(A)'s decision.

Motorcar Hire Charges Issue:
Assessee made excess payment for motorcar hire charges. CIT(A) directed recalculation of disallowance, reducing it to &8377; 14,000/-. Penalty u/s 271(1)(c) imposed. CIT(A) upheld penalty, stating excessive claim falls under furnishing inaccurate particulars of income. Tribunal dismissed Revenue's appeal, stating no concealment of income, as all facts disclosed and disallowance based on estimated market rate. Penalty on disallowance deleted.

In conclusion, Tribunal upheld CIT(A)'s decisions on both interest expenses and motorcar hire charges issues, stating no concealment of income in either case. Penalty under u/s 271(1)(c) was not warranted.