2018 (12) TMI 681

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..... me has been rejected by the Assessing Officer in course of assessment proceedings. Thus, under a bona fide belief that interest expenditure incurred on the overdraft facility is allowable against the interest income earned by investing the funds borrowed from the overdraft account assessee has claimed the expenditure. This, in our view, neither leads to furnishing of inaccurate particulars of income nor concealment of income. As regards imposition of penalty on the addition made on account of notional house property income, it goes without saying that in reality the assessee has not earned any income from house property. The Assessing Officer himself has observed that the addition made on account of income from house property is notiona .....

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..... an amount of ₹ 7,426/- on account of notional income from house property. Thus, in the process, the Assessing Officer determined the total income at ₹ 1,37,29,960/- for A.Y. 2009-10. For A.Y. 2011-12, the assessee filed his return of income on 23.09.2011, declaring total income of ₹ 96,68,780/-. As was the case in A.Y. 2009-10, in A.Y. 2011-12 also the Assessing Officer disallowed interest expenditure of ₹ 30,95,365/- claimed against interest income from fixed deposit and made addition of ₹ 2,12,436/- on account of notional income from house property. In the process the total income was determined at ₹ 1,29,66,590/- . On the basis of aforesaid additions made, the Assessing Officer initiated proceedings fo .....

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..... evident from the submissions of the assessee, against the interest income earned from taxable bonds and fixed deposits, which was offered as income, assessee has set off the interest expenditure incurred on account of funds borrowed from the overdraft account. This claim of set off of interest expenditure against interest income has been rejected by the Assessing Officer in course of assessment proceedings. Thus, as could be seen from the facts on record, under a bona fide belief that interest expenditure incurred on the overdraft facility is allowable against the interest income earned by investing the funds borrowed from the overdraft account assessee has claimed the expenditure. This, in our view, neither leads to furnishing of inaccura .....

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