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TMI Blog2018 (6) TMI 1036X X X X Extracts X X X X X X X X Extracts X X X X ..... year or not - Held that:- On reading of the reasons for making a disallowance it is apparent that there is a difference of opinion between the AO as well as the assessee that the money that been utilized for the purpose of acquisition of the assets have been capitalized till the assets have been put to use - assessee has stated that to that, extent assessee had enough reserves and surpluses available and therefore there is no reason for making any addition to the cost of assets purchased by the assessee - thus it cannot be said that assessee has furnished inaccurate particulars of its income - hence we find no infirmity in the order of the CIT(A) in deleting the penalty levied by AO - Decided in favor of assessee. - ITA No. 5609/Del/2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of capitalization of processing fee LC charges for acquiring assets. 3. The brief facts of the case are that assessee is a company, which is engaged in the business of manufacturing of footwear. It filed its return of income on 30/9/2009 declaring total income of ₹ 2, 34, 39,850/ . The assessment under section 143 (3) of the act was passed on 20/12/2011 by the Ld. Assistant Commissioner Of Income Tax, Circle Ii, Faridabad (Ld. AO) determining total income of ₹ 3,10,64,318/ . The assessee challenged the appeal before the Ld. CIT A who confirmed a. the disallowance under section 14 A of the income tax act of ₹ 5 346460/ holding that since the assessee has incurred the interest expenditure for financing the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceedings. 5. The Ld. assessing officer after consideration of the reply submitted by the assessee held that the assessee has furnished inaccurate particulars of income with respect to all the three above disallowances, which are contested in this appeal and further one more disallowance with respect to disallowance of depreciation on house property. He further held that the assessee has failed to submit any corroborative evidence to authenticate its claim and correctness of the income returned. He further held that as the Ld. CIT has confirmed the above disallowances/addition it shows that assessee has furnished inaccurate particulars of the income. Therefore vide order dated 23/3/2015 he levied a penalty of ₹ 33, 86, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exempt income therefore; there is a clear-cut furnishing of inaccurate particulars by the assessee for above disallowance. He further stated that the interest expenditure and the other expenditure which is incurred by the assessee are debited to the profit and loss account by the assessee claiming them to be revenue expenditure in nature but which are capital in nature and the assessee could not show that interest expenditure has been capitalized till the time these assets have been put to use during the year. He submitted that the claim of the assessee is wrong. 8. Despite notice, none appeared on behalf of the assessee. Hence, we proceed to decide the issue on the merits of the matter as per information available on record. 9. We ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he addition itself is improper, there cannot be any penalty for furnishing inaccurate particulars on such disallowances. In view of this we do not find any infirmity in the order of the Ld. CIT A in deleting the penalty on this disallowance. 11. Penalty has been further levied on two disallowance of interest expenditure and letter of credit charges on the issue that the assessee could not show that borrowings with respect to the assets purchased by the assessee have been capitalized to the cost of assets of till those assets put to use during the year or not. The Ld. CIT A deleted the penalty holding that this is the question of difference of opinion whether the expenses have been revenue expenses or capital expenditure. However, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of acquisition of the assets have been capitalized till the assets have been put to use. The assessee has stated that to that, extent assessee had enough reserves and surpluses available and therefore there is no reason for making any addition to the cost of assets purchased by the assessee. On each disallowance sustained or not contested by the assessee before the higher appellate forum, it cannot be said that assessee has furnished inaccurate particulars of its income. In view of this we find no infirmity in the order of the Ld. CIT A in deleting the penalty levied by the assessing officer for furnishing inaccurate particulars of income on disallowance of interest expenditure and LC Charges. 12. In view of above findings we dismiss g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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