TaxTMI 
TaxTMI 
2014 (4) TMI 1178
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.....143(3) of the Income-tax Act, 1961 (hereinafter referred to as the "Act") for Assessment Year 2006-07 vide his order dated 31.03.2008. Penalty order u/s. 271(1)(c) of the Act was passed by Addl. CIT, Range-56, Kolkata vide his order dated 30.09.2008. 2. The only common issue in these two cross appeals is as regards to the order of CIT(A) restricting the penalty levied by AO u/s. 271(1)(c) of the Act. For this, revenue has raised following ground: "1. That the CIT(A) erred both in facts and in law in cancelling penalty u/s. 271(1)(c) on account of disallowance of business loss of Rs. 7,45,645/- inspite of the facts that assessee deliberately failed to establish alleged loss by producing evidence of FIR, filing details of FIR and not clai....
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.... proceedings and required the assessee to explain why penalty u/s./ 271(1)(c) of the Act, on the above two items, be not levied. The assessee before the AO filed written submissions on 25.09.2008 stating that additions were made on estimate basis and all material fact relating to this assessment has been disclosed in the audited accounts of the assessee. Assessee also claimed that the complete particulars regarding loan creditors, loan taken from bank and overdraft were filed in the audited accounts and complete disclosure was made in the audit report. It was also claimed that the complete details of loss on account of prize winning tickets was accounted for and clearly depicted in the accounts and complete details were filed during the cou....
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....ying penalty u/s. 271(1)(c) of the I.T.Act and as such penalty @ 100% on account of disallowance of interest for Rs. 32,84,594/-, Addition on account of PWT of Rs. 7,45,645/- is imposed calculated as under:..." 5. Aggrieved against penalty, assessee preferred appeal before CIT(A), who deleted the penalty in respect to disallowance of business loss for which revenue is in appeal and confirmed the penalty on disallowance of interest and bank charges for that assessee is in appeal. The observations of CIT(A) are as under: "Regarding the disallowance of interest and bank charges of Rs. 32,84,594/-, I find that no appeal was filed by the appellant against the above disallowances. It is also noted that the appellant had made the interest free ....
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....concealment of income. Therefore, the Assessing Officer is directed to delete Rs. 7,45,645/- from income on which tax was sought to be evaded." 6. We have heard rival submissions and gone through facts and circumstances of the case. As regards to first issue of disallowance of interest and bank charges, we find that the AO during the course of assessment proceedings noticed that the assessee has claimed interest on bank overdraft at Rs. 23,69,393/- and bank charges at Rs. 9.15.201/-. The AO also noted from the Balance Sheet that it had given various loans and advances including relatives and sister concerns in totalling to Rs. 6,74,79,352/-. According to AO, the assessee could not establish that these loans and advances were given for busi....
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....l as well as this year's profits assessed by AO at Rs. 2,48,69,062/-, which is more than the interest free advances, there is no scope for any disallowance but now that chapter is closed and assessee has not filed any appeal against quantum addition, the penalty u/s. 271(1)(c) of the Act for concealment of income or furnishing of inaccurate particulars of income, in any case, cannot be levied. We delete the penalty confirmed by CIT(A) and levied by AO. This issue of assessee's appeal is allowed. 7. As regards to the disallowance of loss on account of prize winning tickets lost by assessee. Assessee before AO has given complete details and this fact is recorded in its ledger. The assessee has even now before us filed complete detail of loss....