PRATHAMESH DEVELOPERS,PUNE vs. ITO, WARD-2(1), PUNE, PUNE

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ITA 1354/PUN/2026Status: DisposedITAT Pune16 October 2026AY 2015-168 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found merit in the assessee's arguments. It noted that the profit of Rs.28,35,750 on account of the sale of the flat was declared by the partner, Shri Kumarpal Roopchand Bora, in his return, instead of in the firm's name. While the addition was rightly taxed in the hands of the firm as per the Tribunal's earlier order, it was an admitted fact that the tax rates for the partner and the firm were the same. Since the partner inadvertently paid the tax in his hands instead of the firm's, there was no loss to the revenue. Citing the Supreme Court decision in CIT vs. Reliance Petroproducts (P) Ltd., the Tribunal held that a mere claim not sustainable in law does not amount to furnishing inaccurate particulars. Therefore, the Tribunal concluded that this was not a fit case for levying penalty under Section 271(1)(c). The order of the CIT(A)/NFAC was set aside, and the AO was directed to cancel the penalty. The grounds raised by the assessee were allowed.

What were the facts?

The assessee, Prathamesh Developers, a partnership firm engaged in construction, filed its return for AY 2015-16 declaring Rs.9,88,28,390. The Assessing Officer (AO) assessed total income at Rs.10,78,62,889, making an addition of Rs.90,34,500 on account of sale of a flat, treating it as business income. The CIT(A) reduced this addition to Rs.28,35,750. The assessee's appeal to the ITAT was dismissed. Subsequently, the AO initiated penalty proceedings under Section 271(1)(c) and levied a penalty of Rs.9,63,871. The CIT(A)/NFAC upheld this penalty. The assessee appealed to the ITAT against the penalty order.

What were the issues?

1. Whether the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961, is sustainable when the income addition of Rs.28,35,750, confirmed by the Tribunal, was already declared and taxed in the hands of a partner of the firm, with no loss to the revenue due to identical tax rates? Assessee's contentions: The assessee argued that the profit of Rs.28,35,750 was declared and taxed in the hands of partner Shri Kumarpal Roopchand Bora. Since the tax rates for the firm and partner are the same, there was no loss to the revenue. The assessee relied on the Supreme Court decision in CIT vs. Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158 (SC), stating that merely making a non-sustainable claim does not amount to furnishing inaccurate particulars. Other relied cases include K.C. Builders & Anr vs. ACIT (2004) 265 ITR 562 (SC), M/s. Carona Limited vs. DCIT & Ors, and CIT vs. S.M. Construction (2015) 233 Taxman 263 (Bom). Revenue's contentions: The Revenue relied on the orders of the Assessing Officer and the CIT(A)/NFAC.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 143(2),Section 142(1),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE

Before: SHRI R. K. PANDA & Ms. ASTHA CHANDRA

For Appellant: Shri Sharad Vaze and Amol Vaze
For Respondent: Ms. Bhavya I.V., Jt. CIT-DR

आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant; प्रत्यर्थी / The Respondent 2. 3. The concerned Pr.CIT, Pune 4. DR, ITAT, ‘B’ Bench, Pune ग र्ड फ ईल / Guard file. 5. आदेशानुसार/ BY ORDER, Sunil Kumar Digitally signed by Sunil Kumar More // True Copy // More Date: 2026.10.25 10:09:24 +05'30' Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune

8 ITA No.1354/PUN/2026

S.No. Details Date Initials Designation 1 Draft dictated on 13.10.2026 Sr. PS/PS 2 Draft placed before author 15.10.2026 Sr. PS/PS Draft proposed & placed before 3 JM/AM the Second Member Draft discussed/approved by 4 AM/AM Second Member Approved Draft comes to the 5 Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS Date on which the file goes to 9 the Office Superintendent Date on which file goes to the 10 A.R. 11 Date of Dispatch of order

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