2018 (12) TMI 1590

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.... Tax Act 1961, (the 'Act'). 2. The grounds of appeal read as under: 1. Whether on the facts and circumstances and in law, the Ld. CIT(A) was right in deleting the penalty of Rs. 22,22,685/- levied u/s.271(1)(c) of the Act without appreciating the fact that the same was imposed on inadmissible claim which were disallowed and hence, a clear case of filing of inaccurate particulars of income. 2. Whether on the facts and circumstances and in law, the Ld. CIT(A) was right in deleting the penalty of Rs. 22,22,685/- levied u/s.271(1)(c) of the Act without appreciating the fact that the assesses has failed to declare its true income and the claim made is not only incorrect in law but is also wholly without any basis and the exp....

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....unt of interest income of Rs. 7,80,281/- as income from other sources, which the assessee had shown under the head business loss. This addition was made on estimate basis and not on any concealment or inaccurate details. The assessee further submitted before the AO that it had declared true and correct return and had not concealed the income nor given inaccurate particulars of income for the AY 2012-13. However, the AO was not convinced with the above explanation of the assessee on the reason that nothing was produced to substantiate the claim of 'pre-operative expenditure' as revenue expenditure and the claim of 'interest income' as business income. Therefore, the AO levied a minimum penalty of Rs. 22,22,685/- u/s 271(1)(c) on the amoun....

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....r sources'. The above facts shown by the assessee has been mentioned by the AO at para 5.1 of the assessment order. The AO has also mentioned at para 5.2, 5.3 & 5.4 of the said assessment order that against the other income, the assessee has claimed a total expenditure of Rs. 1,45,70,193/- under the various heads and accordingly shown loss of Rs. 1,37,89,912/-. While computing its total income, the assessee has considered the other income as business income and claimed the aforesaid expenses against such income and accordingly disclosed loss from business of Rs. 64,05,326/-. The AO observed that the assessee has claimed loss of Rs. 64,05,326/- despite the fact that it has other income. In the assessment order dated 14.03.2015, the AO ....