JASMINE INFRATECH PVT. LTD.,NEW DELHI vs. ITO WARD - 13(2), NEW DELHI

As per its grounds of appeal, the assessee has challenged the imposition of penalty of Rs.1,60,680/- on quantum additions of a sum of Rs.5,20,000/- representing capital work in progress.

When the matter was called for hearing, none appeared for the assessee. Accordingly, the matter was proceeded ex-parte.

On perusal of the orders of the lower authorities placed on record, it is noticed that an addition of Rs.5,20,000/- on account of unexplained credit was made under Section 69C of the Act towards amount appearing under capital work in progress brought forward as a balance of the previous year. The additions were made on the ground that source of expenditure was not given. A case was made out before the CIT(A) by the assessee that the assessee has not expended the expenditure during the year under consideration, and therefore, addition made in itself is opposed to the provision of Section 69C of the Act.

5. On these facts, we straightway notice that Section 69C cannot be attracted for the expenditure which has been admittedly recorded in the books; secondly, the expenditure recorded in the books in the earlier year and carried forward as an opening balance in the current year cannot be subject matter of Section 69C of the Act qua the assessment year in question. Therefore, where the basis for making addition itself is under cloud, there is no warrant to impose onerous under Section 271(1)(c) alleging any furnishing of inaccurate particulars of income. We thus find prima facie merit in the case of the assessee for absolving it from the rigours of penalty.

In the result, the appeal of the assessee is allowed ex-parte.