TaxTMI 
TaxTMI 
2023 (6) TMI 811
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.... A.Y. 2009-10 "1. On the facts and circumstances of the case, the CIT (Appeals) has erred in confirming penalty u/s 271(1)(c) of the Act for furnishing inaccurate particulars of income. Ld. CIT(A) ought to have appreciated the fact that while levying penalty there was no clear finding as to whether penalty is initiated for concealment of income or furnishing of inaccurate particulars of income and accordingly in the absence of specific charge penalty levied u/s 271(1)(c) of the Act is required to be deleted. 2. On the facts and circumstances of the case, the CIT (Appeals) has erred in confirming penalty u/s 271(1)(c) of the Act of Rs.1,50,330/- on the addition of Rs.5,01,000/- made towards expenditure incurred on raising a....
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....g Expenses without appreciating the bonafide explanation of the Appellant that the expenditure was incurred for the business of Appellant. 4. The respondent craves leave to add, alter, amend and/or withdraw any ground or grounds of cross objections either before or during the course of hearing of the same." 3. In the instant case, the assessee company has gone into liquidation and Mr. Manoj Khattar has been appointed as liquidator for the purpose of liquidation of the corporate debtor i.e. the assessee. We observe that several notices have been issued to the official liquidator, however, despite having been granted several opportunities of hearing, there has been consistent non-appearance on the part of the official liquidator. ....
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....s drawn attention to he tax audit report u/s.44AB of the Act wherein at clause 17(a), tax auditor has stated that no expenditure of capital nature is debited in Profit & loss account which prove bonafide belief of appellant that such expenditure is allowable as revenue expenditure, it is seen from the facts as stated above that appellant has not given any explanation for claiming a wrong deduction which was not allowable under the law. The only explanation given is that it was an inadvertent mistake. This is no reason for making a claim patently not allowable under the law. No plausible explanation has been furnished to claim the non-allowable expenses. The claim was not withdrawn even in response to notice issued under section. 143(2). It ....
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....al accepted the explanation of the assessee that it was claimed as revenue expenditure by placing reliance on several judicial pronouncements, and therefore, the claim was not mala fide." 7. Similarly the ITAT Mumbai in the case of Jefferris India Pvt. Ltd. in ITA No. 7397/Mum/2018 vide order dated 28-03-2019 also held that no penalty can be imposed u/s. 271(1)(c) of the Act on account of disallowance of expenses incurred for increase of authorized share capital since no penalty can be imposed when there was no willful concealment and mistake involved only a human error. 7.1 In view of the above observations, we are of the considered view that considering the facts of the case and the judicial precedents on the subject as highlighted ....
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....ompany. Further, it was submitted that the assessee company has also not taken any specific term loan for payment of WIP on plant and machinery. Hence, the assessee company has not allocated interest bearing funds for WIP on plant and machinery. The same is out of internal source/pool of funds available with the assessee company. However, the Assessing Officer did not agree with the contentions of the assessee and the Assessing Officer made proportionate disallowance of interest expenses of Rs. 3,05,399/- u/s. 36(1)(iii) of the Act. The Assessing Officer also imposed penalty u/s. 271(1)(c) of the Act in respect of the aforesaid disallowance. 12. In appeal against the penalty order u/s. 271(1)(c), the ld. CIT(A) dismissed the appeal of th....
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....ssessee and confirmed addition of Rs. 3,05,399/- towards capitalization of interest expenditure by disregarding the contention of the assessee that there were sufficient interest free funds available with the assessee, would not be a fit case for levy of penalty u/s. 271(1)(c) of the Act. Accordingly, penalty imposed u/s. 271(1)(c) of the Act with respect to disallowance made u/s. 36(1)(iii) of the Act amounting to Rs. 3,05,399/- is directed to be deleted. 14. In the result, ground no. 2 of the assessee's appeal is allowed. Ground No. 3 assessee's appeal: ld. CIT(A) erred in confirming penalty of addition of Rs. 6,36,336/- towards foreign travelling expenses. 15. The brief facts relating to this ground of appeal are that during the....