2025 (12) TMI 1162

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.... assessment year (A.Y.) 2016-17. 2. We have considered the rival submissions and perused the materials available on record. Briefly stated, the assessee is a resident corporate entity. For the assessment year under dispute, the assessee filed its return of income on 15.10.2016, declaring Nil income under the normal provisions and book profit of Rs. 9,12,562/- u/s. 115JB of the Act. The return so filed by the assessee was selected for scrutiny. In course of assessment proceeding, the Assessing Officer (A.O. for short) noticed that an amount of Rs. 56,28,900/- was debited to the profit and loss account towards expenditure. To verify the nature of expenditure, the A.O. called for the necessary details. In response, the assessee submitted th....

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.... the disallowance made, the A.O. initiated proceedings for imposition of penalty u/s. 271(1)(c) of the Act and ultimately passed an order on 27.12.2018, imposing penalty of Rs. 16,88,670/- u/s. 271(1)(c) of the Act. The penalty so imposed was also confirmed by the ld. first appellate authority. 4. Having taken note of the factual matrix as well as the submissions made by the parties, we find that the assessee has incurred certain expenditure as a guarantor in connection with the settlement of loan availed by its sister concern. Undoubtedly, the assessee has debited the amount to its profit and loss account towards expenditure. The assessee's claim was disallowed by the A.O. and such disallowance was also sustained by ld. first appellate ....