2019 (5) TMI 342

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.....w.s. 274 of the Income Tax Act, 1961 (the Act) concerning AY 2002-03. 2. The grounds of appeal raised by assessee read as under: "1. The Commissioner of Income Tax (Appeals) has erred in levying penalty of Rs. 12,13,525/- u/s. 271(1)(c) of the Income tax Act, It is submitted that on the facts and circumstances of the case, no penalty is leviable, as there is not any concealment of income on the part of the assessee. Therefore the penalty so levied u/s 271(1)(c) of Rs. 12.13,525/- be deleted. 2. The Commissioner of Income Tax (Appeals) has erred in imposing penalty u/s 271(1)(C) of Rs. 12.13.525/- on the- addition confirmed by CIT(A) of Rs. 33,99,231/- on account of disallowance of proportionate interest expenses of Rs.....

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....usiness purposes. The aforesaid estimated disallowance also invited penalty under s.271(1)(c) of the Act @ 100% thereon. 4. In the first appeal, the CIT(A) also confirmed the penalty so imposed. 5. Further aggrieved, the assessee preferred appeal before the Tribunal. 6. We have considered the rival submissions and perused the orders of the authorities below. The controversy involves imposition of penalty u/s.271(1)(c) of the Act on disallowance on estimated interest expenses in proportion to the corresponding interest free advances given by the assessee. We straightway note that in order to attract penalty u/s.271(1)(c) of the Act, it is necessary that there must be concealment by the assessee of the particulars of his income or fu....