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TMI Blog2014 (7) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... REME COURT] it has been held that there is no finding that any details supplied by the assessee in its Return were found to be incorrect or erroneous or false - mere making of a claim by the assessee in the return does not tantamount to furnishing of inaccurate particulars of income, and consequently, every disallowance made in the assessment cannot lead to the inference of concealment – thus, it is not a fit case for imposition of penalty u/s 271(1)(c) of the Act – Decided against Revenue. - ITA No.910/Hyd/13 ITA No.911/Hyd/13 ITA No.912/Hyd/13 ITA No.913/Hyd/13 - - - Dated:- 18-6-2014 - Shri B. Ramakotaiah And Smt. Asha Vijayaraghavan,JJ. For the Appellant : Shri P. Soma Sekhar Reddy DR For the Respondent : Shri P. Murali Mohan Rao ORDER Per Smt. Asha Vijayaraghavan, Judicial Member: These four appeals by the Revenue are directed against order of the Commissioner of Income-tax(Appeals) I, Hyderabad both dated 1.3.2013, cancelling the penalties levied under S.271(1)(c) of the Income-tax Act, 1961 for the assessment years 1999-2000,2000-01, 2002-03 and 2003-04. Since the factual background and the issues involved in these appeals are common, these app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cords were not traceable. It was also stated that the assessee company claimed the interest under the head interest on working capital and the business activity was carried on during the relevant assessment year. Reliance was also placed on the decision of the Apex Court in the case of CIT V/s. Reliance Petro Products (P) Ltd. Finding no merit in the contentions of the assessee, and observing inter alia that as per the provisions of S.36(1)(iii), only the amount of interest paid in respect of capital borrowed for the purpose of business or profession is admissible as expenditure, Assessing Officer further observed, that since the assessee itself added back the depreciation claimed, it is clear that no business was carried out during the relevant financial year, indicating thereby that the assessee had diverted the funds for purposes other than business but claimed interest expenditure. Concluding thus, that the assessee has furnished inaccurate particulars of income intentionally, the Assessing Officer imposed penalty of ₹ 1,00,22,165 vide order dated 23.6.2011 passed under S.271(1)(c) of the Act. 4. Facts for the other three years under appeal are identical, excepting f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the bank if he wanted to. However there is no evidence to indicate that he made any efforts to obtain the information required. It is also not the case of the Assessing Officer that the claim of interest is bogus. The Assessing Officer admits that the expense was incorrect. He only has stated that the expense was not allowable. As per the above facts, it is clear that no inaccurate particulars of income were ever field by the appellant. It has made a claim of expenses and the latter i.e. the expenses per se were not doubted by the Assessing Officer. Therefore, in my opinion it was only a debatable issue and there was no question of any inaccurate particulars of income having been filed by the appellant. On the facts of the case, no penalty needs to be imposed. Aggrieved by the cancellation of the impugned penalties by the CIT(A), Revenue is in appeal before us for all the three years. 6. The Learned Departmental Representative, strongly supporting the orders of the Assessing Officer, submitted that the assessee is clearly guilty of furnishiung inaccurate particulars of income, and consequently, it is a fit case for the levy of impugned penalties. He submitted that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal. The very same reasons were also stated to have prevailed the assessee in accepting the additions made by the Assessing Officer, instead of proceeding in appeal against the same. Thus, there was a justifiable reason for the non-compliance from the assessee. In the circumstances, we find no justification for the imposition of penalty under S.271(1)(c) of the Act. We are supported in this behalf by the decision of the coordinate bench of the Tribunal in the case of Avanthi Laboratories Ltd. (supra), which has been relied upon by the CIT(A) in the impugned order. 9. Further, merely because a claim made by the assessee is disallowed in the assessment, it cannot lead to the inference of either concealment of income or furnishing of inaccurate particulars of income by the assessee. We are supported in this behalf by the decision of the Apex Court in the case of Reliance Petro Products (supra), wherein it has been held as follows- 9. We are not concerned in the present case with the mens rea. However, we have to only see as to whether in this case, as a matter of fact, the assessee has given inaccurate particulars. In Webster's Dictionary, the word inaccurate has been de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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