2015 (4) TMI 1093

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....t, 1961 amounting to Rs. 49,558/-. Without prejudice to other grounds of Appeal, the Assessing Officer as well as CIT(A) has wrongly applied the explanation 4 to section 271(1)( c) of IT Act, 1961 for levy of penalty u/s 271(i)(c). The Explanation 4 to Section 271(1)( c) is not applicable to the appellant, hence the penalty levied u/s 271(1)(c) under Explanation 4 cannot be levied and penalty be deleted. The appellant has neither concealed any particulars of its Income nor furnished inaccurate particulars of her Income. The appellant completely relied on the experts advise and she was under honest and bonafide belief that whatever interest paid against property is allowable against the Income from House Property. Without prejudice to oth....

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.... found that the assessee had claimed interest on borrowed funds of Rs. 17.78 lakhs, being loan from Bank of Punjab against income from house property. He further found that the property let out was a commercial property at Surat, that the assessee was 1/3rd owner of the property, that all the three co-owners entered into lease agreement with bank of Punjab limited, the agreements were entered into on 22.5.2003, that the co-owners approached the bank over a term loan against the rent receivable, that the bank sanctioned the term loan facility. After considering the agreements entered with the Bank, the AO held that taking of loan was an act subsequent to acquisition of the impugned property, the issue fell beyond the provisions of sec.24(b) ....

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....e FAA upheld the order of the AO. 4.Before us the AR submitted that interest paid by the assessee was part of total interest, that she was under the bonafide belief,that disallowance of the claim in the assessment proceedings should not result in levy of concealment penalty.He relied on the cases of Reliance Petro-products Ltd.(322ITR158),IFCI Ltd.(328ITR611),Mahavir Irrigation Pvt. Ltd.(61DTR218).DR supported the order of the FAA. 5.We have heard the rival submissions and perused the materials available before us. We find that the AO had disallowed the claim made by the assessee under the head interest paid, that the FAA confirmed the addition by deciding the appeal, that AO had levied penalty u/s.271(1)(c) of the Act. We are of the opini....