Brief of the case
Assesse’s claim for exemption u/s 10B was denied. A.O. also passed a penalty order u/s 271(1)(c) for raising a false claim for exemption. Tribunal found that assesse had not even challenged rejection of claim in appeal. Moreover, judgments relied upon by assesse for raising such a claim were found distinguished on facts. Tribunal, thus concluded that assesse deliberately furnished false particulars of income. Accordingly, impugned penalty order was confirmed.
Facts of the case
- The assessee claimed benefit u/s.10B on the interest income earned on deposits placed with the bank/s for fixed term/s (FDRs) and inter-corporate deposits (ICDs).
- It was found that the interest income has no nexus with the assessee’s business activity. Therefore on raising false claim by assesse, AO passed penalty order u/s 271 (1) (c).
- Before Tribunal, the assesse relied on various judgments to its case. The Tribunal found that assesse had not even challenged rejection of claim in appeal. Moreover, judgments relied upon by assesse for raising such a claim were found distinguished on facts.
Contention of Revenue
There is nothing on record to suggest otherwise, i.e., of the interest bearing deposits as occasioned by the assessee’s business requirements, of a clear nexus with business, much less an intimate relationship, denoting one of first degree, as contemplated by law, which thus is with the said deposits.
HELD by ITAT
