COMMISSIONER OF INCOME TAX Vs. PRAKASH CHANDRA YADAV

JUDGEMENT

(1.) BY the Income -tax Appellate Tribunal ('Tribunal'), Delhi Bench 'E' in ITA No. 4694/Del/2000 relevant for the asst. yr. 1997 -98, relating to penalty p. 1/4 proceedings.

(2.) THE facts leading to the filing of this appeal are that in the block assessment proceedings, preceding the assessment year out of which the present appeal arises the assessee had claimed deduction for interest in the amount of loans taken for the purposes of purchasing house property. In the block assessment proceedings the AO had not accepted the contention of the assessee that it had taken a loan. For the asst. yr. 1997 -98 with which we are concerned the assessee claimed deduction in the sum of Rs. 10,99,650 towards interest on the loans taken. The AO then asked the assessee why the claim of interest should not be disallowed to which the assessee apparently did not give any satisfactory answer. In view of this, the AO disallowed the claim of interest and decided to initiate penalty proceedings against the assessee under s. 271(1)(c) of the Act.

(3.) BY an order dt. nil the AO levied a penalty of Rs. 4,12,860 on the assessee which was challenged by him before the ITA No. 874 of 2005 p. 2/4 Commissioner of Income -tax (Appeals) ['CIT(A)']. The appeal was rejected by the CIT(A) but the Tribunal accepted the second appeal filed by the assessee.