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2013 (9) TMI 483

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....invoked second time. The satisfaction for imposition of penalty was recorded for two items of addition made in the Assessment Order namely the addition of Rs.90,000/- as unexplained cash credit and Rs.97,262/- representing alleged* unvouched commission. 3. That the Assessing Authority has already exercised his powers under Section 271 (1)(c) of the LT. Act by levying a penalty of Rs. 1,30,850/- by order dated 30.10.1992. 4. That in first appeal before the Learned CIT (A), the Learned CIT (A) was pleased to delete the penalty in respect of cash credit of Rs.90,000/- and sustained the penalty in respect of alleged unvouched commission of Rs.97,262/-. 5. That the learned Income Tax Appellate Tribunal by order dated 29th October 1999 was pleased to cancel the entire penalty as levied. 6. That the exercise of power again by the Learned Assessing Authority was unwarranted and uncalled for. 7. That in any case the requisite addition for levy of penalty have not been met. 8. That no penalty in any case was leviable on the addition as made. 9. That the order is against the law and facts of the case." 3. Briefly stated, the facts giving rise to this appeal are that the assessment in ....

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....andum dated 19/3/1980 got the right to screen films booked by it and chosen by it on weekly Theater basis for a period of 520 weeks. The lease was renewable at the option of the second party, the appellant. Therefore, the appellant got the Cinema Building on lease to screen the films for a period of 10 years. Since there was no ownership on Cinema Building, the appellant is not entitled for depreciation. Accordingly, this ground of appeal is dismissed. 5. Ground No. 3 relates to disallowance of Rs. 6,93,892/- on account of intt. paid to bank. It is seen from the assessment order that in revised return the assessee claimed deduction of interest amounting Rs. 6,93,892/- for the current assessment year. It has been stated that the auditors have reported that the sum has been paid to Punjab & Sind Bank on account of loan taken for constructing building and has been capitalized to the building account. The assessee did not file completion certificate of the building. The A.O. further noted that the building was still under construction. He therefore, came to the conclusion that the deduction of intt. can only be allowed if the construction is over and building start fetching rent. Acco....

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.... not claimed the amount of intt. paid in previous year and therefore, it is allowable in the year under consideration. 6.1 I have considered the facts of the case carefully. The intt. of Rs. 5,16,111/- relates to earlier years. The assessee has not brought any material to support its contention that the liability to pay interest crystallized during the year under consideration and therefore, the same is not allowable. Moreover, the interest relate to building under construction. Therefore, the claim of the appellant is also not allowable. This ground of appeal is dismissed." 5. In view of above said order of Commissioner of Income Tax(A), the Assessing Officer issued a notice u/s 271(1)(c) to the assessee on 25.8.2004 for the hearing on 03.09.2004. In reply to the said notice, the assessee requested to keep the penalty proceedings in abeyance till the disposal of the appeal by ITAT which was stayed by the Assessing Officer. 6. The matter was decided by the ITAT vide order dated 7.12.2007 in Appeal No. 2955 ad 2956/Del/2004 for AY 1981-82 i.e. assessment year under consideration and 1982-83 by a common order. Besides other issues, the ITAT confirmed the addition/disallowance pert....

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....mission which was finally cancelled by the ITAT. But the penalty impugned in this appeal imposed by the AO by order dated 28.8.2008 and also confirmed and upheld by the Commissioner of Income Tax(A) is related to the issue of disallowance of interest wrongly claimed on funds raised for building under construction, being capital in nature and another disallowance made in relation to the interest claimed as expenses of the year under consideration which was factually related to earlier years. Therefore, on finalization and confirmation of these issues in favour of the Revenue by the ITAT, the penalty is imposable on the assessee. Ld. DR also contended, pointing out para 5 and 6 of the impugned order of Commissioner of Income Tax(A), that the order is cryptic in which the Commissioner of Income Tax(A) has not dealt with the issue on all aspects and submissions. Further, the DR vehemently contended that the impugned order suffers from a lack of reasoning and is not a speaking and well- reasoned order. 11. On careful consideration of above contentions and submissions on legal issue, from bare reading of para 5 and 6 of the impugned order, we observe that the ld. Commissioner of Income ....