2014 (7) TMI 950

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....-04 vide order dated 22.03.2010. 2. The brief facts of the case are that the assessee, a doctor (child specialist) by profession, claimed interest at Rs. 1,16,083/- in computation of her income arising to her in exercise of her profession. The same was found to be on a loan of Rs. 10 lacs from HDFC Bank, which had been, upon receipt, transferred by her to a company by the name 'Sanjivani Diagnotic Hospital & Resarch Centre Pvt. Ltd.', a company in which she was a director, as a loan. There was, accordingly, no nexus between the interest suffered and claimed by the assessee and her professional activity or income arising there-from. The same came to be disallowed in assessment, invoking section 14A, and which stood confirmed in ap....

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....as, accordingly, confirmed, relying on the decision in the case of UOI vs. Dharmendra Textile Processors [2008] 306 ITR 277 (SC). Aggrieved, the assessee is in second appeal. 3. We have heard the parties, and perused the material on record. 3.1 The law in the matter of levy of penalty u/s.271(1)(c) of the Act is trite. Penalty is not automatic, and a plausible explanation saves penalty, the onus to furnish which though is fully and squarely on the assessee, and toward which we may refer to a host of decisions by the apex court, apart from the case law relied upon by the Revenue: CIT v. Atul Mohan Bindal [2009] 317 ITR 1 (SC); Dharmendra Textile Processors (supra); K.P. Madhusudhanan vs. CIT [2001] 251 ITR 99 (SC); B.A. Balasubramaniam an....

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....The argument is misleading, being contrary to the assessee's own explanation that the amount advanced to the company was not by way of share capital, but by way of a loan, which is interest bearing. Interest, if any, on the said loan, would not be tax-exempt. There is, thus, no question of it yielding income not forming part of the total income, so that in the absence of such income section 14A disallowance would not hold. The question is not of the provision under which the assessee's claim stood disallowed, but of the basis of the assessee's claim. The same stands made u/s. 36(1)(iii), toward which no basis or explanation has been forthcoming even up to before us. Again, even assuming it to be u/s.57(iii), for which though the....