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TMI Blog2023 (4) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... t sustainable. Disallowance of expenditure in connection with QIP and disallowance of claim of deduction u/s 80-IB on the ground of allocation of interest expenses - It cannot be said that there is concealment of income or furnishing of inaccurate particulars of income on the issue on which the penalty has been levied. All due disclosures are there. Primary dispute is with respect of nature of expenses i.e. revenue vs capital. These particulars have been completely disclosed in Income Tax Return. Hence if the claim is not accepted merely on the ground of the same being classified capital by Revenue authorities, in such as a situation the case of Reliance Petro products [ 2010 (3) TMI 80 - SUPREME COURT] comes to the rescue of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - (6,75,20,806 + 3,91,714) and as such, it is liable to penalty us 271(1)(C) of the Act. 4. That on facts and circumstances of the case and in law, the CIT(A) did not appreciate that deduction of expenditure on Qualified Institutional Placement (QIP) was claimed in the statement / computation of income as line item with detailed note giving complete details of the claim. Merely because QIF expenses to the extent of Rs.6,75,20,806/ - were disallowed, it cannot be sai that the Appellant has furnished inaccurate particulars of income within t meaning of section 271(1)(C) of the Act. 4.1. That on facts and circumstances of the case and in law, the CIT(A upholding penalty u/s 271(1)(C) in respect of QIP expenses did not appreciate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance of deduction of QIP expenses of Rs. 14,79,69,000/-, (il) deduction U/s 80IB(10) was disallowed to the extent of Rs.68,29,057/-, (iv) addition of notional ALV of Rs.2,21,21,466/- u/s 22 (v) disallowance of completed project expenses of Rs.1,48,80,286/-. In the first appeal, the Ld. CIT(A) vide order dated 30.09.2010, deleted the addition of notional ALV and disallowance of completed project expenses. Out of disallowance of deduction of Rs.68,29,057/- under section 80IB(10) of the Act, relief of Rs.65,09,343/- was allowed. Thus the disallowance of deduction us 801B(10) was restricted to Rs.3,19,714/-. Similarly, out of disallowance of Rs. 14,79,69,000/-, being the expenditure on Qualified Institutional Placement (QIP), relief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total Rs.6,78,40,520/- The assessment was made us 143(3) of the Income tax Act, 1961. The assessee has returned income of Rs. 170 crores. QUANTUM PROCEEDINGS- 1. With regard to QIP (Qualified Institutional Placement scheme) expense The assessing officer initially made disallowance of QIP expenses to the tune of Rs. 14.79 crores on the ground of same being of capital nature. [Asst order Page 5-9, Conclusion at Page 9 Para 4.5] The CIT(A) restricted the disallowance to Rs.12.76 crores by reducing expenses in connection with un-materialized scheme. [CIT(A) Order Page 1 to 10, Finding - Pg 8 Para 10 onwards] The ITAT further restricted the disallowanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23) (NK Choudhry and Shamim) 2. Primary dispute is with regard to nature of expenses i.e. revenue v. capital. The genuineness of expenses is not in dispute. There is complete disclosure of facts in the balance sheet and IT and as such the allegation of furnishing of inaccurate particulars of income is arbitrary. There is no dispute with regard to correctness of expenditure but the disallowance is merely on the ground of admissibility and same being of capital nature CIT v HMA Udyog P. Ltd. [2007] 211 CTR 543 (Del.) Aanya Real Estate P. Ltd. vs DCIT (ITA No.115/Mum/20) (ITAT Mum) Reliance Petro Products [2010] 322 ITR 158 (SC) 3. Further, the issue is debatable as the claim of the assessee is that the proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground no.2, the assessee has stated that there is no striking off of irrelevant part in the notice u/s 274 rws 271(1)(C). Copy of the notice 274 is attached in paper book at page 2. It is evident that the same is an omnibus notice without identifying the charge by striking off of the limb which is not applicable. In such circumstances, the penalty levied cannot be sustained. For this proposition, we rely upon the full bench decision of Hon ble Bombay High Court in the case of Md. Farhan A. Shaikh vs DCIT 125 taxmann.com 253 (Bom). Similar proposition was laid down in Pr. CIT vs Shara India Life Insurance Co. Ltd. [2021] 432 ITR 84 (Del.) Thus, since the penalty notice is omnibus and the charge has not been specified, the penalty is not su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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