2016 (3) TMI 1493

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....NO JAIN, A.M. : This appeal filed by the assessee is directed against the order of learned Commissioner of Income Tax (Appeals)-I, Ludhiana dated 31.8.2015. 2. Briefly, the facts of the case are that the Assessing Officer made disallowance of an amount of Rs. 1,77,538/- on account of capitalization of interest on plant & machinery under proviso to section 36(1)(iii) of the Income Tax Ac....

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....een borrowed for acquisition of an asset for extension of existing business or profession, interest paid shall not be allowed for the period from the date on which the capital was borrowed till the date on which such asset has been put to use. The onus was on the assessee to prove that the asset is not for extension of existing business. Since no such case was made out by the assessee, the proviso....

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....ed that the disallowance made under section 36(1)(iii) of the Act, does not lead to levy of penalty under section 271(1)(c) of the Act. In this regard, reliance was placed on the judgment of the Hon'ble Apex Court in the case of CIT Vs. Reliance Petroproducts Private Limited (2010) 322 ITR 158. It was stated that the disallowance was sustained only because of difference of opinion between the ....

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....that it is a case of concealment of income or furnishing of inaccurate particulars since the assessee had disclosed all facts and figures accurately in its return of income. In fact, the disallowance has been made by the Assessing Officer on the basis of information provided by the assessee itself. This is only assessee's bonafide belief under which he did not capitalize the said interest on loan ....