2018 (5) TMI 1430

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....referring to the application for A.Y. 2007-08 the learned counsel for the assessee has explained the background of the dispute as it is contended that the dispute stands on similar footing in both years. It has been explained that the applicant is a state government undertaking and a successor of the erstwhile Maharashtra State Electricity Board and was formed in the previous year relevant to A.Y. 2006-07 on demerger/ unbundling of the state electricity board. Notably, at the time of unbundling of Maharashtra State Electricity Board separate companies were formed relating to the business of generation, transmission and distribution of electricity and so far as the assessee is concerned it was set up as a holding company for the three unbund....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ity Board by the State government was noticed, and it was held that the assessee was not entitled to the corresponding claim of deduction of interest expenditure. By referring to the discussion in the order of the Tribunal dated 21.04.2017 (supra) the learned A.R. pointed out that in view of the changed scenario, the Tribunal did not go into the merit of the issue as to whether the interest expenditure was otherwise allowable under Section 36(1)(iii) or not. In this background the learned A.R. pointed out that the penalty levied by the AO under Section 271(1)(c) of the Act on such disallowance is highly inappropriate and unjustified. It is pointed out that so far as the penalty levied with respect to the other two disallowances, viz. Repair....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....paid. The prayer of the appellant is to hear the appeals on an out of turn basis and considering the prima facie merit of the case as also the amount of tax already paid, the balance of the demand be stayed. 4. On the other hand, the learned D.R. appearing for Revenue contended that once the Tribunal has also sustained the disallowance in the quantum proceedings, the levy of penalty is justified and there was no cause for granting stay on recovery of the disputed demand arising from the levy of penalty. 5. We have carefully considered the rival submissions. No doubt, the merits of the dispute shall be considered appropriately by the Bench at the time of full-blown hearing of the appeal of the assessee, however, to the extent it is necessa....