TaxTMI 
TaxTMI 
2017 (11) TMI 1356
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.... hence should not be clubbed with the Current tax. The same should be classified as Interest expense under finance costs. However, such amount should be separately disclosed." 4. In that view of the matter, the amount which has been shown by the assessee under the Schedule "F" "Interest Paid", in the schedule annexed to the profit and loss account for the year ended on March 31, 2010, reads as under: On car loan A/c 32931 On loan/OD from (O.B.C. Bank) 481969 On service Tax 3084 On Income Tax 455219 Total Rupees 973203 5. Learned counsel for the appellant relied upon the decision of Delhi High Court in Shervani Hospitalities Ltd. Vs. Commissioner of Income-tax, [2013] 35 taxmann.com 271 (Delhi), wherein it has been observed :- "18. Whether or not expenditure incurred on renovation or improvement or repairs on the leasehold premises can be allowed and treated as revenue expenditure, has been elucidated in several cases. There are several cases in which the said claim has been allowed. It is the contention of the assessee that Explanation 1 to Section 32 of the Act applies to expenditure on property on lease or with right to occupy which otherwise is c....
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....lasses etc. was treated as a revenue expense. The expenditure included polishing of floor, wooden paneling etc. Reference in this regard may also be made to decisions of the Madras High Court and the Punjab and Haryana High Court in CIT vs. Ayesh Hospitals Pvt. Ltd. 2007 292 ITR 266 (Mad.) and CIT vs. Porrits & Spencer (A) Ltd. (2002) 257 ITR 49 (P & H). 19. We have extensively referred to these judgments, only to show that the issue raised by the assessee was debatable and capable of two views. The assessee had an arguable case or had taken a bonafide plea. The assessee had given his explanation and categorically and clearly stated the true and full facts in the return itself. He did not try to camouflage or cover up the expenses claimed. It is not uncommon and unusual for an assessee to bonafidely claim a particular expenditure as a revenue deduction and expense but not succeed. Every addition or disallowance made does not justify and mandate levy of penalty for concealment under Section 271(1)(c) of the Act. Levy of penalty is not an automatic consequence when an addition is made by disallowing an expense and by not accepting the interpretation given by the assessee. As state....
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.... income was duly audited. Claim for depreciation is a technical claim based on interpretation of legal provision. Legal opinion, in such cases, is frequently given by Chartered Accountants to help the company to prepare its return of taxable income. In the present case, there is no allegation that the quantum of depreciation claim was incorrectly computed. The note itself indicates that it is written by a professional." 6. He also took us through the decision of Delhi High Court in IT Appeal Nos. 116 & 118 to 122 of 2007, Commissioner of Income Tax v/s Anand Prakash dated 27.02.2009, wherein Delhi High Court has observed as under: "This takes us to the second question as to whether the Tribunal has erred in law in deleting the levy of interest under s. 234B of the IT Act. We feel that although the conclusion of the Tribunal with regard to the levy of interest under s. 234B being penal in nature is not correct, the ultimate conclusion arrived at by the Tribunal cannot be interfered with. We are of this view because interest under s.234B is clearly by way of compensation. What the Revenue proposes to do in the facts and circumstances of the cases is to charge interest for the def....
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....sessee has little or nothing to do with the inadvertent error. That the assessee should have been careful cannot be doubted, but the absence of due care, in a cash such as the present does not mean that the assessed is guilty of either furnishing inaccurate particulars or attempting to conceal its income. 20. We are of the opinion, given that peculiar facts of this case, that the imposition of penalty on the assessee is not justified. We are satisfied that the assessee had committed an inadvertent and bona fide error and had not intended to or attempted to either conceal its income of furnish inaccurate particulars." 2. In case of Commissioner of Income-Tax, Ahmedabad Vs. Reliance Petroproducts (P.) Ltd.,[2010] 189 Taxman 322 (SC) wherein it has been observed :- 5. By way of response to the Show Cause Notice regarding the penalty in its reply dated 22.3.2006, the assessee claimed that all the details given in the Return were correct, there was no concealment of income, nor were any inaccurate particulars of such income furnished. It was pointed out that the disallowance made by the Assessing Authority in the Assessment Order under Section 143(3) of the Act were solely on a....