TaxTMI 
TaxTMI 
2016 (5) TMI 403
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....has raised several grounds in its appeal, however, the crux of the issue is concised as follows:- i) The learned Commissioner of Income Tax (Appeals) has erred in deleting the penalty levied under section 271(1)(c) of the Act for Rs. 75,66,580/- in respect of bogus write off of bad debts of Rs. 1.8 crores and interest claimed as deduction amounting to Rs. 44,79,440/- which is attributable towards the interest free loan advanced to sister concern." 3. Brief facts of the case are that the assessee company is engaged in the business of manufacturing of iron rods and bars filed its return of income on 27.03.2008 declaring Nil income. The case was selected for scrutiny and thereafter the assessment was completed by the learned Assess....
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....isallowed the claim of bad debts relating to aquaculture written off amounting to Rs. 1.8 crores. In the assessment proceedings, it was further observed that the assessee company had obtained bank overdraft amounting to Rs. 12,60,15,000/- against which the assessee had paid interest of Rs. 1,12,67,000/-. From the above sum of Rs. 12,60,15,000/- the assessee company had transferred Rs. 5,01,00,000/- to M/s KBDL as interest free advance. Therefore, the learned Assessing Officer had disallowed the interest amount of Rs. 44,79,440/- which is attributable to interest free advance and added the same to the income of the assessee. 4. Since the assessee has furnished incorrect particulars and thereby concealed his income, the learned Assessing O....
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.... 271 (1) (c). The assessee company has got overdraft facilities of Rs. 12,60,15,000/- from Andhra Bank in their name and diverted Rs. 5,01,00,000/- of the overdraft loan to the KBDL. The assessee company has claimed interest on the overdraft facilities in their Profit and Loss account and reduce the profit. The assessee company diverted the loan to sister concern and claimed interest as expenditure in their Profit and Loss account. Therefore, the assessee company has deliberately conceal income by way of claiming interest on overdraft facilities which is not used for the business purposes of the company. In view of the above discussion, the assessee has produced inaccurate particulars or concealment of income as per section 271 (1)....
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.... placed in the decision of Sudarshan Silk & Sarees Vs. CIT reported in 300 ITR 205 and in the case of K.R. Chinny Krishna Chetty reported in 246 ITR 121. Thus, the learned Commissioner of Income Tax (Appeals) deleted the entire penalty levied by the learned Assessing Officer 7. Before us, the learned Departmental Representative vehemently argued stating that the assessee had concealed the income by furnishing incorrect particulars such as bogus claim of bad debts and further by shifting the interest from the assessee's subsidiary company to the assessee company since the assessee company had advanced interest free loan to its sister company from interest bearing funds. 8. The learned Authorized Representative on the other hand relied ....