Penalty on addition of 40A(b) , Income Tax

[geetha menon]

The A.O. has  made addtion u/s. 40A(b) on account  excess interest payment to relative (18%-12%= 6%. Penalty u/s. 271(1)(c) can levy  on the above addition

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[GOPALJI AGRAWAL]

I think you are talking abt 40(2)(b) provisions. Penalty can not be levied as it is neither inacccurate particulars nor concealment case.

It has also been held in the case of

Jhavar Properties (P) Limited. Versus Assistant Commissioner Of Income-Tax.

The case details is available at the following link:

http://www.taxmanagementindia.com/visitor/detail_case_laws.asp?ID=59637