9911796707
TMI Blog2019 (8) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... ame business already carried on. Thus, the same were claimed as revenue expenses. Similarly on netting of interest assessee has given a bonafide explanation as how the interest income and interest expenditure had a direct nexus. By making such a claim it cannot be held that assessee has furnished any inaccurate particulars of income or concealed any particulars of income. Simply because disallowances have been made without any adverse material on record but on some legal interpretation, then no penalty can be levied in view of the decision of Hon ble Apex Court in the case of Reliance Petro Products Pvt. Ltd. [ 2010 (3) TMI 80 - SUPREME COURT] The findings and reasons of the Ld. CIT (A) for deleting the penalty is thus upheld - Decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,65,55,147/-, which was 50% of the total business income from running of hotels and resort. Ld. AO noted that assessee has claimed deductions on the following income which are not related to business:- Interest income (FDR interest) ₹ 19,41,723/- Rent ₹ 7,26,000/- Miscellaneous income ₹ 14,56,415/- Total ₹ 41,24,138/- 3. Accordingly, AO has made the disallowance of ₹ 20,62,069/-. He has also made further addition on account of disallowanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature of disallowance is of legal nature and the AO has not made out a case of suppression of any material fact. The appellant is entitled to take a view on legal issues which are favourable to it, and the mere fact that its stand has not been accepted cannot per se lead to imposition of penalty. Similarly, the disallowance in respect of expenses pertaining to Jaipur Project involves an issue of Capital expenses vs. Revenue expenses and Capitalization of expenses. Once again there has been no suppression of any material fact. 4.5. The addition of interest income pertains to an issue of netting of interest i.e., set off all interest payments against interest receipts. Though the appellant s explanation has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any has withdrawn all its employees and security personnel from Jaipur hotel construction site. Thus, unlike the financial year 2007-08, no such expenses including employees remuneration, contribution to PF, security services etc. are directly attributable to Jaipur Hotel Construction during the year under consideration. Moreover, Jaipur project is not a separate business but is a part of the appellant s business. Jaipur project is the form of expansion of the same business already carried on by the appellant because it is having common management, common control and owned by the same company. Thus all the expenses incurred by the appellant company are revenue expenses and deductible u/s 37 of the Act. The assessee has act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seen that the assessee s claim has been that interest income on short term surplus funds which was kept for running hotel business, rent receipt etc. had direct nexus with hotel business and these are income derived from hotel business. Similarly the expenses related to Jaipur project were also claimed on the ground that it is not a separate business but a part of the assessee s own business. The other project was form of expansion of same business already carried on. Thus, the same were claimed as revenue expenses. Similarly on netting of interest assessee has given a bonafide explanation as how the interest income and interest expenditure had a direct nexus. By making such a claim it cannot be held that assessee has furnished any inaccura ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
