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Case Law Details

Case Name : Gitanjali Ghate Vs. DCIT (ITAT Mumbai)
Appeal Number : ITA No. 6560/Mum/2010
Date of Judgement/Order : 23/05/2012
Related Assessment Year : 2006-07
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While scrutinizing the balance sheet of the assessee, during the course of assessment proceedings, it was noticed by the Assessing Officer that the assessee has taken loan of Rs. 3,57,428/- from M/s. Third Eye Qualitative Researchers Pvt. Ltd. of which she is a director having substantial interest.  Accordingly, the said loan of Rs. 3,57,428/- was added as deemed dividend u/s. 2(22)(e) of the I.T. Act. The AO sought explanation u/s. 271(1)(c) r.w. Explanation-1. The assessee furnished detailed reply dt. 6.3.2009. The explanation of the assessee was rejected by AO who levied minimum penalty of Rs. 1,20,310/-.

We have perused the orders of lower authorities. It is not in dispute that the fact of the loan taken by the assessee from the company came within the knowledge of AO from the balance sheet filed by the assessee which means that the assessee has disclosed the fact of borrowing in her balance sheet. We agree with the Counsel that assessee had no malafide intention to conceal the fact. So long as assessee has not concealed any material fact or any factual information given by her has not been found to be incorrect, she should not be liable to imposition of penalty u/s. 271(1)(c).

INCOME TAX APPELLATE TRIBUNAL, MUMBAI

ITA No. 6560/Mum/2010 – Assessment Year-2006-07

Gitanjali Ghate Vs.  DCIT 

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