2016 (10) TMI 976

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..... on advances and loans to the income during the subject assessment years was a bona fide mistake. This mistake, it held, was on account of the fact that the amendment to Section 43B(e) of the Act requiring the actual payment of interest on loans and advances came into force only w.e.f. 1st April, 2004. The Apex Court in Price Waterhouse Coopers (P) Ltd. Vs. Commissioner of Income Tax, (2012 (9) TM .....

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..... nal was correct in upholding the decision of the CIT(A) cancelling penalty u/s 271(1)(c) of the I.T. Act, 1961, without appreciating that the assessee had filed inaccurate particulars intending to evade taxes to extent of ₹ 1,82,83,210/by not adding back an amount of ₹ 5,09,63,653/u/ s 43B of the Income Tax Act, 1961 3. The respondent assessee during the subject assessment year .....

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..... This in view of the amendment made to Section 43B(e) of the Act by the Finance Act, 2003 w.e.f. 1st April, 2004. This amendment substituted the words term loans therein with interest payable on loans and advances . This order of CIT(A) in quantum proceedings was accepted by the respondent assessee. 5. In the penalty proceedings, the respondent assessee explained that the failure to add back .....

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..... ly paid. The CIT(A) also records the fact that the assessee himself has disallowed the interest on term loan, which had not been paid. In these circumstances, the CIT(A) held disallowance of interest not paid on loans and advances by the respondent assessee was a bona fide mistake. Thus, allowed the appeal of the respondent assessee. 7. Being aggrieved, the Revenue carried the issue in appeal t .....

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..... e Apex Court in Price Waterhouse Coopers (P) Ltd. Vs. Commissioner of Income Tax, (2012) 25 taxmann.com 400 (SC), held that the penalty should not be imposed where the error / mistake is bona fide, to which we are all susceptible. 9. In view of the concurrent finding of fact by the CIT(A) as well as the Tribunal and in the absence of the same being shown to be perverse, the question as proposed .....

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