22 May 2010
I have two issue relating to penalty levied by A.O.:
1. The assessee had made interest free advance. The A.O. had made addition @ 18% interest and imposed a penalty u/s 271(1)(c). I want case law in favour of assessee that penalty is not imposable to assessee.
23 May 2010
If the amount has been advanced as interest free, the A.O. cannot make addition of interest unless he has the evidence supporting that the advances are not interest free.
If it is proved that the advances are not interest free penalty proceedings certainly can be initiated u/s 271(1)(c) otherwise not.
23 May 2010
Dear Rajesh Ji I dont have ready reference of case law to provide. But to my understanding any addition in the income cannot be blind addition it must be proved and supported by evidence.
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