ITA No. 1092/JPR/2026
Parties Involved
Facts Summary
The assessee, Popular India Vacations Pvt. Ltd., had advanced Rs. 91,50,000/- for the purchase of land for building parking space of its fleet of vehicles. However, the deal was abandoned, and the assessee asked for a refund of the advance. Interest expenses of Rs. 19,55,613/- were incurred on the bank overdraft facility used for the advance. The assessee claimed the interest expenses as revenue expenditure, but the Assessing Officer treated them as capital expenditure and disallowed the claim. The National Faceless Appeal Centre, Delhi confirmed the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961, for the alleged concealment of income. The assessee appealed against the penalty, arguing that the disallowance of the interest expenses did not automatically lead to the imposition of a penalty for concealment or furnishing inaccurate particulars of income.…
Decision in favour of
Partly Assessee / Partly Revenue
Legal Issues
- 1. Whether the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961, is sustainable?
Judgment Outcome
Decided in favour of Partly Assessee / Partly Revenue.
Precedents Relied Upon
2 precedents cited in this judgement.
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Mumbai bench