2014 (7) TMI 860

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....ted on 23.01.2006 determining total income at Rs. 2,40,400/-. The Commissioner of Income Tax called for the records and noticed that the assessee had advanced a loan of Rs. 6 crores to Enterprise Trading Company subject to certain terms of agreement. According to article 5.1.3 of the terms of agreement failure on the part of the borrower to repay the debts comprising of principal amount and interest, on due date, would amount to default in which event the borrower has to pay liquidated damage @48% per annum on the defaulting amount. Records show that though the principal amount was repaid by the borrower the assessee has not recovered any amount on account of alleged interest liability which works out to Rs. 1,33,07,817/-. Since the assesse....

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....duct of the parties. The AO, however, was of the opinion that the assessee having followed mercantile system of accounting, liquidated damages ought to have been booked in the hands of the assessee and therefore brought to tax an amount of Rs. 63,87,752/- and further levied penalty of Rs. 20,12,142/- on the ground that the assessee sought to evade tax on the aforementioned sum. 5. Penalty was affirmed by the learned CIT(A) and therefore the assessee is in appeal before the Tribunal. At the time of hearing the learned counsel for the assessee placed before us a copy of the order of ITAT "G" Bench, Mumbai in assessee's own case for A.Y. 2003-04 (ITA No. 4633/Mum/2011 dated 16.11.2012) to contend that the Tribunal had considered this issue ....