TaxTMI 
TaxTMI 
TaxTMI 
2014 (12) TMI 509
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....approval on 31.01.2011 whereby, the Tribunal had given liberty to the Revenue that in case it gets approval from COD, then Department can apply to get its appeal revived and the order was recalled at the instance of the revenue in Miscellaneous Application No. 204/Del/2010 dated 20.11.2012. 2. Brief facts indicate that the assessee during the assessment proceedings submitted that chargeability of interest on account of call money with the bank of Rs. 2,13,17,614/- and chargeability of interest on the discounting scheme of Rs. 8,74,28,576/- were not liable to interest tax under the provisions of Interest Tax Act. But, the A.O., while making assessment, held that both the amounts were chargeable for interest tax and penalty proceedings u/s 1....
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....y assisted by professionally competent people, I direct him to pay a sum of Rs. 44,42,839/- bring the minimum leviable penalty which he directed to pay." 3. Aggrieved by this order, the A.O. imposed penalty of Rs. 44,42,839/- u/s 13(1)(c), assessee challenged such action before the first appellate authority and it was submitted that the petitioner company is a subsidiary of General Insurance Corporation of India and is engaged in the business of general insurance. For the previous year ended on 31.03.1992, the petitioner company filed its return and the chargeable interest shown at Rs. 3,92,51,082/-, which was subsequently revised to Rs. 3,92,45,450/- vide letter dated 31.03.1997 but it has been assessee at Rs. 53,47,25,290/- vide assessme....
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....s Rediscounting scheme 8,74,28,576 21,49,79,185 Total 49,51,80,631 3.1 It has further been submitted that subsequently, on application dated 06.04.1998 made by the petitioner company under section 17 of the Interesttax Act, 1974 for rectification, the chargeable interest of Rs. 53,47,25,290/- was reduced to Rs. 53,45,29,084/- by his order dated 05.06.1998 made under section 17 of the Interest-tax Act, 1974. The Ld. CIT (A)-III, New Delhi dismissed the appeal filed by the assessee company by his appellate order dated 16.09.1998 in Appeal No.148/98-00 for the interest-tax assessment year 1992-93. On second appeal the Hon'ble Income Tax Appellate Tribunal, Delhi Bench A, New Delhi restored the issues in res....
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....ails of interest claimed in the return of chargeable interest and the same are supported by the accounting policy of the assessee company. The above mentioned interest has been claimed on the bona-fide belief that it is allowable in computing its chargeable interest it is further submitted that without finding any mistake in the accounts merely disallowance of a claim which was not accepted or was not acceptable to Revenue, that by itself would not attract penalty under section 271(1)(c) of ht I. T. Act, 1961 as held by the Hon'ble Supreme Court in the case of CIT Vs Reliance Products Ltd. (2010) 189 Taxman 322 (S.C.). 3.4 It has further been submitted that no penalty can be imposed for disallowance of a claim made on the bona fide bel....
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..... 4. Ld. CIT(A) while considering and accepting the appeal of the assessee has concluded to delete the penalty imposed by the A.O. u/s 13(1)(c) of the Interest Tax Act. 5. Aggrieved by this order of Ld. CIT(A), Department has come up in appeal and challenged such action of Ld. CIT(A) before this bench and pleaded for setting aside the order of Ld. CIT(A) and restoring that of the A.O. It was strongly pleaded by the Ld. D.R. that as per clause 28A of Section 2 of the I. T. Act, 1961, "interest" means interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) and includes any service fee or other charge in respect of the moneys borrowed or debt incurred....
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.... the case of the assessee decided by ITAT in favour of the assessee for the assessment year 1996-97 and 1997-98 and next reliance was placed on the case of National Insurance Co. Ltd. Vs CIT & Another reported in 339 ITR 573 (Cal.), G E Capital Transportation Financial Services Ltd. Vs CIT reported in 101 TTJ 298 (Del.), Dion Global Solution Ltd. Vs DCIT reported in 2010-TIOL-772-ITAT-Del., Diwan Enterprises Vs CIT reported in 246 ITR 571 (Del.) and by ITAT Delhi in the matter if ITO Vs Pandit Vijay Kant Sharma reported in 2009-TOIL-554-ITAT-Del. 7. While relying upon the Ld. CIT(A)'s order at page 6, last paragraph, it was contended that all the facts are there so, when assessee did not file further appeal in quantum, penalty could not be....