POPULAR INDIA VACATIONS PRIVATE LIMITED,JAIPUR vs. INCOME TAX OFFICER, JAIPUR

ITA 1092/JPR/2026Status: DisposedITAT Jaipur14 September 2026AY 2015-1610 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the interest expenditure incurred on an abandoned capital project should be treated as revenue expenditure. Therefore, the claim was not unsustainable, and penalty under Section 271(1)(c) was not leviable.

What were the facts?

The assessee claimed interest expenditure of Rs. 19 lacs as revenue expenditure. The AO disallowed this claim, treating it as capital expenditure, and levied a penalty under Section 271(1)(c) for concealment of income. The CIT(A) confirmed the penalty.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable when an expenditure claimed as revenue is disallowed as capital, especially when the issue is debatable. Whether interest expenditure on an abandoned capital project is revenue or capital in nature.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 275(3)(b),Section 37(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES, “SMC” BENCH, JAIPUR

Hearing: 09.09.2026Pronounced: 14.09.2026

Per Annapurna Gupta, AM:- The present appeal has been filed by the assessee against the order passed by the National Faceless Appeal Centre, Delhi(hereinafter referred to as “Ld. CIT(A)”), dated 23.03.2026 confirming the levy of penalty under Section 271(1)(c)of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).

P a g e | 2 Popular India Vacations Pvt. Ltd.

2.

Briefly stated penalty for concealing/furnishing inaccurate particulars of income in the present case was levied on the disallowance made of interest expenditure amounting to Rs.19 lacs, rejecting assessee’s claim of the same being revenue in nature, treating it as capital expenditure incurred by the assessee. The disallowance of

The order continues below.

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