2017 (10) TMI 164

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..... idle. It was brought to notice of the AO that assessee did not have surplus funds that were deployed to earn interest and thus the funds were business funds only and income there from constituted profits and gains of business. It was also explained to the AO that, the assessee paid interest of ₹ 140,526/- on funds borrowed and this was allowed by the AO as business expenditure. To reduce this interest burden, the assessee deployed funds available on a temporary basis for fruitful purposes rather than keeping the funds idle. - Decided in favour of assessee. - ITA No. 351/Mum/2012 - - - Dated:- 22-9-2017 - SRI MAHAVIR SINGH, JM AND SRI N.K. PRADHAN, AM For The Assessee : Shri Mehul Shah, AR For The Revenue : Shri Suman Kuma .....

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..... d circumstances of the case. We find that the assessee has claimed deduction under section 10B of the act on interest amount of loans and advances and AO brought to tax the excess claim of deduction of ₹ 7,26,926/- under the head income from other sources. The assessee claimed that admissibility of deduction U/s. 10B on the component of interest receipt was from funds advanced that were used in the business Since the funds were temporarily available out of business, the same were deployed as a matter of prudence in order not to keep the funds idle. It was brought to notice of the AO that assessee did not have surplus funds that were deployed to earn interest and thus the funds were business funds only and income there from constituted .....

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..... rtained a bona fide view about the eligibility of such interest income for the purposes of deduction under two provisions in the light of the above two orders passed by the Mumbai Benches of the Tribunal. Merely because the assessee's claim has not been accepted in quantum proceedings, cannot per se be a reason to impose or confirm penalty u/s. 271(1)(c). Where a possible view is canvassed by the assessee on the eligibility of a particular amount as qualifying for deduction, the negation of such a view cannot be held as concealment of income or furnishing of inaccurate particulars of income. The Hon'ble Supreme Court in the case of CIT vs. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158 (SC) has held that mere making of a claim, .....

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