9911796707
TMI Blog2012 (9) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... ntain the 11.5 Km Rau Pithampur Road, in consideration of right to appropriate toll collection over a fixed period. The appellant company has filed its original return of income at a loss of Rs.1,90,11,242/- and the returned loss was assessed u/s 143(3) vide order dated 30.11.2007. Subsequently, notice u/s 148 was issued on 07.11.2008 and total loss was assessed at Rs.70,23,650/-. Before initiating proceedings u/s 147/148 of IT Act, the Assessing Officer has noticed that the appellant company has claimed interest of Rs.1,19,87,5951- being interest on advance against Deep Discount Bonds which was not allowable as no TDS deduction has been made on such interest. Therefore, to tax such amount notice u/s 148 has been issued. The appellant compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revised) return filed before the completion of assessment u/s 143(3) r.w.s. 147. He further submitted that the payment of Interest was contractual and committed .The Id AO has not doubted the genuineness of the expenditure, but has made disallowance only on account of non deduction of TDS as per provisions of section 40(a)(ia). The said non5 deduction was due to bona fide interpretation of circular no. 4/04 issued by CBDT which clearly states that in case of OOB's ,TOS is required to be made only at the time of redemption/payment thereof. That the payee (IL&FS) is a quoted company and has already (presumably) paid their due taxes on the said interest income. Thus, there was no effective loss to the revenue, and in any case, no tax was "soug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h was confirmed by the learned CIT(A). 7. On the other hand, Shri Keshav Saxena, the learned CIT DR contended that assessee has claimed interest expenses of Rs. 1,19,87,595/- being interest on advance against deep discount bonds, which was not allowable u/s 40(a)(ia) of the IT. Act, as no TDS was deducted on this as required u/s 193 of the IT Act. After issue of notice u/s 148 of the IT Act, the assessee company admitted the above facts and filed revised return in which claim of such interest expense of Rs, 1.19 crore was withdrawn and as a result the returned loss of assessee was reduced from Rs, 1.90 crores to Rs. 70.23 Lakhs. The AO treated revised return as non-est, disallowed the interest claim of Rs. 1.19 crore and assessed the loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the ld. Counsel for the assessee and the learned CIT DR during the course of hearing before us in the context of factual matrix of the case. From record we find that the assessee has taken advance against Deep Discount Bonds. In the profit and loss account, the assessee has claimed payment of interest against such advances. However, no TDS was deducted on such advances, therefore, in the reassessment proceedings, the Assessing Officer has disallowed the assessee's claim for deduction of interest expenditure. The Assessing Officer also levied penalty with respect to the amount of interest disallowed on the plea that the assessee has concealed particulars of income. The contention of the assessee before the lower authorities was that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim made in the Return cannot amount to the inaccurate particulars. Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, in our opinion, attract the penalty under Section 271(1)(c). If we accept the contention of the Revenue then in case of every Return where the claim made is not accepted by Assessing Officer for any reason, the assessee will invite penalty under Section 271(1)(c). That is clearly not the intendment of the Legislature." In the instant case even during the course of original assessment proceedings u/s 143(3) vide order dated 30.11.2007, the Assessing Officer has examined the assessee's claim for payment of interest and the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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