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TMI Blog2017 (1) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... rresponding interest under section 14A treating the same as expenditure incurred on earning dividend of ₹ 42,020/-. CIT(A) did not consider the same as it clearly appearing in the original assessment order. Therefore, both the authorities did not consider the material evidence available on record in right perspective. We find that merely interest has been disallowed does not mean that the assessee has considered the income are filed the inaccurate particulars of income. Also there is no finding that any details furnished by the assessee in its return were found to be incorrect or false. Thus, the order of penalty is liable to be quashed. - Decided in favour of assessee - I.T.A. No. 202/KOL/2014 - - - Dated:- 23-9-2016 - Shri Wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiyal (Al l) 173 Taxman 71, without discussing how the said judgment is applicable to the present case. 5. On the facts and in the circumstances of the case, the learned CIT(A) erred in confirming the levy of penalty of ₹ 45,467/- u/s 271(I)(c) of the Act . 6. The appellant craves leave to amend, alter, modify, substitute, add to, abridge and/ or rescind any or all of the above grounds. 3. The only effective ground amongst all other above to be decided in this appeal of assessee is as to whether the CIT-A is justified in confirming the impugned penalty imposed by the AO in the facts and circumstances of the case. 4. The brief facts relating to the issue are that in this case original assessment u/s 143(3) was compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or counsel for preparation of written submissions and requested to refix the case after two weeks time. The AO identified the case as time-barring and held the Assessee failed to defend the case, inspite of having availed many opportunities. Considering the same, the AO imposed penalty of ₹ 45,467/- u/s 271(1)(c) of the Act. 8. Aggrieved by such penalty order, the assessee preferred an appeal before the CIT-A and contended that all the details involving investments and dividend earned were produced before the AO along with expenses of interest and were disclosed in the P L account. Further, disallowance of interest as made by the AO is on estimation basis and no penalty can be levied on the same. The assesse, further relied on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment and he relied on the orders of the lower authorities. 10. Heard rival submissions and perused the material available on record. We f ind that the assessee filed return of income showing loss of ₹ 1,65,74,980/-and thereafter, in pursuance of the order of Tribunal, the loss was revised at ₹ 1,64,56,884/- and disallowed ₹ 1,18,096/- towards interest paid on borrowed fund and the facts remains undisputed. We f ind from the original assessment order dt:28-03-03 that the AO show caused the assessee to explain why an amount of ₹ 57,90,492/- found to be interest paid to the borrowed funds and accordingly the said amount was adjusted to the returned loss. Therefore, it is clear from the perusal of the record the AO re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roneous. We must hasten to add here that in this case, there is no finding that any details supplied by the assessee in its return were found to be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty under s. 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. 12. In the present case, the assessee filed the required evidence before the AO in original assessment proceedings wherein the interest amount to the extent of ₹ 57,90,492/- was adjusted to the returned loss in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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