2024 (8) TMI 1123 - AT - Income Tax

Penalty u/s 271(1)(c) - disallowance of interest u/sec. 57(iii) wherein the taxpayer had claimed interest expenditure against interest income which he failed to substantiate despite filing all the relevant details - HELD THAT - Even the Revenue could not rebut the clinching fact that such a failure on assessee s part in filing all the relevant details along with the return and lack of substantiation thereof on his part, would hardly invite the impugned penal provision as per CIT vs. Reliance Petro Products (P) Ltd., 2010 (3) TMI 80 - SUPREME COURT wherein their lordships have settled the law that on each and every quantum addition/ disallowance does not attracts the impugned penal provision automatically. We find force in learned counsel s vehement submissions for deleting the impugned penalty. Ordered accordingly.

Summary

The ITAT Cochin allowed the assessee's appeal for the assessment year 2008-2009 against a penalty of Rs. 75 lakhs imposed under sec. 271(1)(c) for failure to substantiate interest expenditure against interest income. The penalty was deleted based on the principle established in CIT vs. Reliance Petro Products (P) Ltd. The delay of 02 days was condoned, and the appeal was admitted for adjudication. The order was pronounced on 22.08.2024.