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TMI Blog2012 (11) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... ular circumstances, and it has to demonstrate that the interest bearing fund was utilized for business purpose and commercial expediency. Whether there was a business expediency or not is a debatable issue & it has been well settled now that penalty cannot be imposed where the issue is debatable - in favour of assessee. - I.T.A. No 1957/Ahd/2009 - - - Dated:- 5-10-2012 - Shri A. K. Garodia, And ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts in brief are that the assessment u/s 143(3) of the Income Tax Act 1961, (hereinafter referred to as the Act) was finalized determining the total income at Rs. 81,35,309/-. After making additions on account of less on securities trading at Rs. 80,77,500/- and disallowance of interest of Rs. 17,32,449/- The penalty proceedings u/s 271(1)(c) of the Act was only initiated. 3. The assessee f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty cannot be imposed. He submitted that the assessee had been paying interest on bank borrowing of more than Rs. 75 lacs since financial year 1998. He submitted that the assessee has already discharged its onus by submitting details of M/s Omkar Finstock Ltd and also clarified due to dispute with the party, its account cannot be adjusted thereby discharging the initial burden by preponderance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty cannot be confirmed merely on the basis that the expenditure as claimed was disallowed by the authorities. He submitted that the amount was not advanced to M/s Omkar Finstock Ltd. as loans but was given for trading in shares. We find force into the contention of Ld. counsel for the assessee that the penalty could not have been imposed merely on the basis that the addition made by the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss purpose and commercial expediency. Whether there was a business expediency or not is a debatable issue. It has been well settled now that penalty cannot be imposed where the issue is debatable. In this view of the matter, this ground of assessee s appeal is allowed. 6. In the result, the appeal of the assessee is allowed. Order pronounced in open court on the date mentioned hereinabove at c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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