Save Rs 588 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Concealment of Income in case of loss

Save Share

This query is : Resolved

Maqbulhusen Malaiwala (Querist)
Follow

28 July 2010 I have one query.

A person is having business income. during the income his sales return Rs.1.25 lacs as compared to his sales of Rs.1.00 Lacs & having loss of Rs.7.50 lacs.

The assessee has borrowed huge amount from various institutions & paid hafty interest. It is not possible to identify whether the money is used for the purpose of business or for personal.

Can assessing officer disallow such interest expenditure & can assessing officer treat such disallowance as concealment of income.

If possible pls. quote judgement/case law on the same.

Regards & Thanks in Advance
Maqbulhusen Malaiwala

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

28 July 2010 Disallowance of expenses will not per se amount to furnishing inaccurate particulars of income so as to attract penalty under section 271(1)(c).
Citation : -CIT Vs. Ajaib Singh & Co. (2002) 253 ITR 630 (P&H)

Message likes : 1 times

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now