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TMI Blog2014 (7) TMI 958X X X X Extracts X X X X X X X X Extracts X X X X ..... essee – there was no justification for the imposition of penalty u/s 271(1)(c) – Decided in favour of Assessee. - ITA.No.383, 384 & 385/Hyd/2013 - - - Dated:- 16-7-2014 - Shri B. Ramakotaiah And Shri Saktijit Dey,JJ. For the Petitioner : Mr. P. Muralimohan Rao For the Respondent : Mr. R. Mohan Reddy, ORDER Per B. Ramakotaiah, A. M. These three appeals are by assessee against the orders of Ld. CIT(A)-III, Hyderabad dated 22nd February, 2013 confirming the penalty levied under section 271(1)(c) of the I.T. Act, 1961 on the issue of claim of interest in the impugned assessment years. 2. Briefly stated, assessee company filed returns of income for the impugned years inter alia, claiming interest payble to banks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that assessee has incurred losses in all the years and did not contest the disallowance as there is no scope for adjusting losses. Even otherwise, the claim of interest which was not paid to the bank would also get disallowed under the provisions of section 43B and relying on the principles laid down by the ITAT in the case of M/s. Avanti Laboratories Ltd., Hyderabad vs. ACIT ITA.No.307/Hyd/2009 dated 3rd July, 2009, the penalty with regard to the disallowance under section 43B has to be deleted. It was further submitted that ITAT in the case of Shri S. Prasada Rao vs. DCIT ITA.No.338/Hyd/2006 dated 21.11.2008 held that disallowance on discrepancies found out by the A.O. may give rise to a suspicion to make an addition for assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seen from the above, the original disallowance made by the A.O. was under the provisions of section 43B. However, the ITAT gave another opportunity to the A.O. to examine as the claim of interest was also considered as for non business purposes by the A.O. However, on the directions of the ITAT, A.O. disallowed the amount again as the assessee expressed its inability to furnish necessary details due to disputes with the bank. In these circumstances, it cannot be stated that assessee has furnished inaccurate particulars deliberately to Revenue. The claim made could not be substantiated and this may not lead to levy of penalty under section 271(1)(c) where the parameters are for concealment of income or for furnishing of inaccurate particula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rking capital requirements of the assessee. Assessee has explained the various difficulties that it had to encounter on account of the fact of the concerned accountant and others, who were handling the accounting matters, who left the company, and the hostile relationship between the assessee company and the banker, which prevented it from complying with the requirement of the Assessing Officer, which led to the disallowances in question during the years under appeal. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing the case, there would be no question of inviting the penalty under Section 271(1)(c) of the Act. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the Return cannot amount to the inaccurate particulars. In the case before, there is no dispute with regard to the interest payments made by the assessee to the bank. Neither the amounts of payment nor the factum of payment of payment was questioned, so as to allege that the assessee has furnished inaccurate particulars of its income. If the disallowance was made by the Assessing Officer, it was basing on the assumption that the assessee has not carried on a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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