2019 (8) TMI 103

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..... 0 - SUPREME COURT] that no penalty is justified where all the details of expenditure as well as income in its return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the authorities to accept its claim in the return or not. Merely because the assessee had claimed the expenditure which claim was not accepted or was not acceptable to the Revenue, by itself, would not attract penalty u/s 271(1)(c). We notice that similar circumstances exist in the present case. Guided by the principles laid down by the Hon ble Supreme Court (supra), we find merit for non-applicability of penalty in the absence of any falsity in the particulars furnished. The AO has adm .....

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..... ex parte in the absence of the assessee. 4. The learned DR for the Revenue relied upon the lower authorities. 5. We have considered the submissions made on behalf of the Revenue as well as perused the orders of the authorities in quantum proceedings and in penalty proceedings. The relevant facts are that the assesse had claimed deduction in respect of interest paid to Kotak Mahindra Bank Ltd. amounting to ₹ 7,85,850/- out of income from other sources . The assessee has declared interest income of ₹ 1,25,000/- under the head income from other sources . The assessee explained before the AO that he procured a secured term loan from Kotak Mahindra Bank alongwith family members in the earlier years o .....

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..... ent of income on its part. It was up to the authorities to accept its claim in the return or not. Merely because the assessee had claimed the expenditure which claim was not accepted or was not acceptable to the Revenue, by itself, would not attract penalty under s. 271(1)(c) of the Act. We notice that similar circumstances exist in the present case. Guided by the principles laid down by the Hon ble Supreme Court, we find merit for non-applicability of penalty in the absence of any falsity in the particulars furnished. The AO has admitted the claim of interest expenditure to the extent of interest income and therefore one cannot definitely say that interest expenditure was not utilized for the purpose of earning interests. Th .....

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