2018 (3) TMI 1662 - HC - Income Tax

Penalty u/s 271 1 (c) - disallowance of interest expenditure u/s 14A - Held that - The quantum additions pertain to disallowance of interest expenditure under Section 14A of the Act read with Rule 8D . No evidence of assessee not disclosing the income or source of income which would give rise to penalty proceedings under Section 271 1 (c) of the Act. The Tribunal, of course, has proceeded on somewhat different reasons, nevertheless, we see no reason to pursue further the penalty proceedings. Appeal dismissed.

Summary

The Gujarat High Court dismissed the Tax Appeal against the Income Tax Appellate Tribunal's judgment deleting a penalty of Rs. 1,79,56,966 under section 271(1)(c) of the Income-tax Act, 1961. The issue involved disallowance of interest expenditure under Section 14A of the Act read with Rule 8D. The Court found no evidence of non-disclosure of income warranting penalty proceedings under Section 271(1)(c) and upheld the Tribunal's decision.