9911796707
TMI Blog1989 (5) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... a correct interpretation of the Explanation to section 271 (1) (c) of the Income-tax Act, 1961, the Tribunal was justified in holding that no penalty could be imposed under section 271(1)(c) of the Income-tax Act, 1961, and in that view, cancelling the order of penalty made by the Inspecting Assistant Commissioner under the Said section ?" The facts leading to this reference are that the assessee, as a registered firm, in its return of income for the assessment year 1964-65 had shown total income of Rs. 69,359. The Income-tax Officer framed the assessment on a total income of Rs. 2,15,170. In doing so, the Income-tax Officer treated the cash credits amounting to Rs. 1,10,000 standing in the names of Shri Kanhaiyalal Agarwalla, Hari Prasad K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in Anwar Ali's case [1970] 76 ITR 696, it was submitted on behalf of the assessee that the income-tax authorites were not justified in invoking the provisions of section 271(1)(c) of the 1961 Act in respect of the aforesaid additions made by the Income-tax Officer and the disallowance of interest thereon. As regards the interest payments to Rajkumar Jain and Co. and Patni Trading Co. (P.) Ltd., the learned representative for the assessee invited the attention of the Tribunal to its order in the assessee's own case for the assessment year 1963-64 in I. T. A. No. 4777 (Cal) of 1973-74 wherein the assessee's claim for deduction of interest paid by these parties was accepted by the Tribunal. In this view of the matter, it was finally submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case. We are of the view that the Tribunal, on the facts and in the circumstances of this case, has come to a correct conclusion. Apart from the fact that the question which has been raised before us is purely a question of fact, even otherwise, on the facts, no penalty was imposable. It was found that the concerned creditors had responded to the summons issued under section 131 of the Income-tax Act, 1961. All of them had confirmed that they had advanced the loans to the assessee. The Tribunal upheld the allowance of interest to those loan creditors. The Inspecting Assistant Commissioner, in imposing the penalty, proceeded on the footing that the assessee could not explain satisfactorily the loans which were added back in the assessment. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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