ACIT, CIRCLE- 27(1), NEW DELHI vs. UNITECH LTD., NEW DELHI
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Income Tax Appellate Tribunal, DELHI BENCH: ‘H’ NEW DELHI
Before: SHRI SAKTIJIT DEY & SHRI PRADIP KUMAR KEDIA
PER SAKTIJIT DEY, JM:
Captioned appeals by the Revenue are against two separate
orders of learned first appellate authority deleting the penalty
imposed under section 271(1)(c) of the Income-tax Act, 1961 (for
short ‘the Act’) pertaining to assessment years 2007-08 and 2013-
14.
ITA No.8913/Del/2019 & 8915/Del/2019
When the appeals were called for hearing none appeared on
behalf of the assessee. Even, there is no application seeking
adjournment. Considering the fact that the assessee has failed to
avail multiple opportunities of hearing, we proceed to dispose of
the appeals ex-parte qua the assessee after hearing learned
Departmental Representative and based on the materials
available on record.
Briefly the facts are, the assessee, a resident corporate
entity, is stated to be engaged in the business of construction and
development of real estate projects. For both the assessment
years under dispute, the assessee had filed its return of income
voluntarily under section 139(1) of the Act. For the assessment
year 2007-08, the assessee offered income of
Rs.1218,53,37,410/-. Subsequently, the assessment was
reopened under section 147 of the Act and completed vide order
dated 30.03.2015 determining the total income at
Rs.1234,95,60,960/-. The variation in total income was due to
the following additions:
i Capital gains treated as Business Rs.153,98,17,883 Income ii Loan from BUUIPL Treated as Deemed Rs.11,07,40,708 Dividend iii Notional Interest disallowance on Share Rs.1,85,35,549 2 | P a g e
ITA No.8913/Del/2019 & 8915/Del/2019
Application Money iv Notional Interest disallowance on Rs.2,13,38,368 Unsecured Loans Total Rs.169,04,32,508
Similarly, for assessment year 2013-14, the assessee
declared income of Rs.236,66,03,027/-. Whereas, while
completing assessment under section 143(3) of the Act, the
Assessing Officer determined the total income at Rs.
401,61,03,311/-. The variation in total income was due to the
following additions:
i Notional Interest on Share Application Rs.19,76,99,227 Money ii Notional Interest on Unsecured Loans Rs.115,09,67,769 iii Rental Income treated as business income Rs.4,56,54,716 iv Advertising & Promotional expenses Rs.52,06,423 v Prior Period Expenses Rs.5,62,317 vi Expenses u/s 14A Rs.24,06,00,155 vii Late Deposit of PF employee contribution Rs.4,85,65,343 Less: Depreciation on Rented Properties Rs.77,97,364 Total Business Income Rs.168,14,58,586
Based on all the additions made in assessment years 2007-
08, couple of additions, viz., Rs.19,76,99,227/- and
Rs.115,09,67,769/- in assessment year 2013-14, the Assessing
Officer initiated proceedings for imposition of penalty under
section 271(1)(c) of the Act and ultimately pass orders imposing
penalty under the said provision.
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ITA No.8913/Del/2019 & 8915/Del/2019
Against the penalty orders so passed, the assessee preferred
appeals before learned Commissioner (Appeals). While deciding
the appeals, learned Commissioner (Appeals) having found that
the additions subjected to the imposition of penalty under section
271(1)(c) of the Act were deleted by the Tribunal while deciding
quantum appeals of the assessee, deleted the penalty imposed
under section 271(1)(c) of the Act, in both the assessment years
under dispute.
Before us, learned CIT(DR) fairly agreed with the factual
finding of learned Commissioner (Appeals) that additions giving
rise to the penalty imposed under section 271(1)(c) of the Act have
been deleted by the Tribunal. Thus, from the facts on record, it is
evident, the additions giving rise to the penalty proceeding under
section 271(1)(c) of the Act are not in existence in view of the
order dated 24.07.2019 passed by the Tribunal in ITA
No.1905/Del/2017 and Ors. That being the undisputed factual
position emerging on record, the penalty imposed under section
271(1)(c) of the Act cannot survive. Accordingly, we uphold the
decision of learned Commissioner (Appeals) in deleting the
penalty imposed in both the assessment years under dispute.
Grounds are dismissed. 4 | P a g e
ITA No.8913/Del/2019 & 8915/Del/2019
In the result, both the appeals are dismissed.
Order pronounced in the open court on 26th December, 2022
Sd/- Sd/- (PRADIP KUMAR KEDIA) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 26th December, 2022. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi
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