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2017 (12) TMI 1474
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....ing Grounds: 1.0 The order passed by the learned CIT(A) confirming the levy of penalty u/s 271(1)(c) for Rs. 1,40,000/- is bad in law and liable to be quashed. Your appellant submits that it has neither concealed income nor furnished any inaccurate particulars thereof and as such the penalty is liable to be cancelled. It is submitted that it be so held now. 2.0 The order passed by learned CIT(A) confirming penalty u/s.271(1)(c) is bad-in-law also for the reason that order of penalty passed by learned A.O. is not specific about the charge for which penalty u/s 271(1)(c ) is levied. 3.0 The learned CIT(A) failed to note that appellant had given not only bona fide explanation, but had also substantiated the same and ....
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....ponse, the assessee has furnished a reply vide letter dated 06/11/2012. 2.2 The case is discussed as under: During the assessment proceedings, it was seen the assessee had given loans/advances of Rs. 31 lacs to M/s Bil Metal Works Pvt. ltd in which the directors are common. From schedule 'R' to profit and loss account it was seen that the assessee has incurred huge interest expenditure of Rs. 76,576 lacs on term loan and Rs. 160,70 lacs for working thus, the assessee had acquired funds for the purpose of its day to day running of business and also for long term expenditure. It was very difficult for the assessee itself to establish that its own fund of Rs. 6 crore was not utilized and was blocked as advance to M/s. B. Metal Wo....
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....ed for business. In view of the above, claim of interest expenditure to the tune of Rs. 378754/- @ 12% is considered to be not incurred for the purposes of business. Therefore, out of interest payments, an amount of Rs. 378754/- was disallowed. 2.3 The CIT(A) held that assessee allotted equity shares to the erstwhile partners of the firm. Bil metal works in the ratio of their capital as per clause 6 of the merger agreement. Total consideration of Rs. 10 lakh by way of shares was paid by the assessee to nine partners including Bil metal Works Pvt. Ltd to which 5000 shares were allotted. This was done without taking into account the debit balance of bill metal works and the liability of Rs. 31.91 lakh was accepted by assessee without re....
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....the Audited Balance Sheet as on 31/03/2005, the company is having its own share capital fund of Rs. 600 lacs less Profit & loss account Debit Balance of Rs. 66.30 lacs, thus net owned fund was of Rs. 533,70 lacs. The company had not given any amount to Bil Metal works Pvt ltd the amount was recoverable on account of share of loss incurred as a partner. This is the notional Addition made by the Assessing officer. These amount was shown as receivable as advances, the department has never considered these advances for not business purpose and never charged as notional interest of the company. We may also mentioned that as per the decision of Hon'ble Supreme Court in case of S. A builders vs. CIT (2006) 158 tax man 74, held th....
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....'s case. Thus in this case the assessee not only concealed the particulars of its income but also furnished inaccurate particulars of such income deliberately. 2.6 After assimilation of all the facts emerging from the above observations and interpretations vis-a-vis the submissions of the assessee, it is concluded that the onus cast upon by the explanation 1 below the provisions of sections u/s.271(l)(c) have not been discharged by the assessee for the reason that the explanation rendered on record by the assessee in its defence against charge of furnishing inaccurate particulars of its income and thus concealment fall considerably short of the attributes mandated in this regard by the said explanation. Therefore, I hold that the amo....
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....ulars of income. Accordingly, Order u/s.271(l)(c) was passed on 21/03/2013 levying penalty of Rs. 1,40,000/-. Thereafter, same was confirmed by the ld. CIT(A). Furnishing of inaccurate information relates to furnishing of factually incorrect details and information about income. The admission or a rejection of a claim is a subjective matter and whether a claim is accepted or rejected has nothing to do with furnishing of inaccurate particulars of income, what is a correct claim and what is incorrect claim is a matter of opinion. Raising a legal claim, even if it ultimately found to be legally unacceptable, cannot amount to furnishing of inaccurate particulars of income. A bonafide claim by the assessee being visited with penal consequences o....