Case Law Details
Sunrise Broking P. Ltd. Vs ITO (ITAT Ahmedabad)
In the case of Sunrise Broking P. Ltd. Vs ITO, the ITAT Ahmedabad has ruled in favor of the appellant, deleting a penalty levied due to additions made to interest on income tax refund. The ITAT concluded that there was no concealment or inaccuracy in the reported income particulars, leading to the abolition of the penalty.
The initial penalty under section 271(1)(c) of the Act was charged due to two main additions to the income of the appellant: Expenses incurred in relation to the earning of exempt income as per the provisions of Rs.14A of the Act, and interest on an income tax refund of Rs.77,176.
Upon review, the ITAT found that the disallowed expenses had been determined through computational provisions provided in the rules, not any actual finding of expenses incurred for earning exempt income. Given this context, the ITAT concluded that the appellant had not concealed or furnished inaccurate particulars of income in regard to the disallowed expenses.
Similarly, the ITAT noted that the non-disclosure of the interest on income tax refund was made under a mistaken belief and was later acknowledged by the appellant. Considering the appellant’s usual vigilance in returning interest received on refunds, the ITAT found no evidence of intentional concealment or inaccurate furnishing of income particulars.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
