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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
(A.Y.2012-13) A and A Hotels Pvt. Ltd. Vs. Jt. CIT (OSD), Circle-1(1) 6/A Sindhu House, Aaykar Bhavan Naanbhoy Lane, Fort, Mumbai- 400020 Mumbai 400001 स्थायी लेखा सं./जीआइआर सं./ PAN/GIR No: AAFCA8628J Appellant .. Respondent Appellant by : Prakash Jotwani Respondent by : Avneesh Tiwari Date of Hearing 29.11.2022 Date of Pronouncement 30.11.2022 आदेश / O R D E R Per Amarjit Singh (AM):
The present appeal filed by the assessee is directed against the order passed the NFAC, Delhi dated 15.09.2022 for A.Y. 2012-13. The assessee has raised the following grounds before us: “Ground No.1: Penalty u/s 271(1)(c) of Rs.17,71,580/-: The ld. CIT(A) while passing the order dated 15.09.2022 erred in holding in para 9 that the appeal is dismissed for statistical purposes, although in para 8.4 of the same order the CIT(A) stated “Consequently, the present penalty becomes infructuous and is accordingly deleted.”
2. The fact in brief is that assessment u/s 143(3) of the Act was completed on 25.03.2015 determining the total loss in the case of the 2 A and A Hotels Pvt. Ltd. Vs. Jt. CIT(OSD), Circle-1(1) assessee of Rs.20,67,004/-. Subsequently, assessment u/s 143(3) r.w.s 147 of the Act was completed on 31.10.2017 determining loss at Rs.1,62,31,225/-. During the course of assessment the assessee was asked to furnish detail of pre-operating expenses of Rs.44,38,779/- claimed in the return of income. The A.O stated that assessee could not submit any documentary evidences to justify the claim of deduction u/s 35D of the Act. Therefore, the amount of Rs.44,38,779/- claimed as pre- operating expenses was disallowed and added to the total income of the assessee. Thereafter vide penalty order u/s 271(1)(c) of the Act dated 26.04.2018 the A.O has levied penalty of Rs. 13,71,580/- of concealment of income.
The assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) after following the decision of ITAT, Mumbai on the identical issue on similar fact has partly allowed the appeal of the assessee and held that penalty proceeding become infructuous and same has been deleted. The relevant operating part of the decision of CIT(A) is reproduced as under: “8. I have carefully considered the action of the Assessing Officer and the submissions of the appellant 8.1 In the quantum appeal, the AO had disallowed claim of pre-operative expenses amount is Rs.44,38,779/-, by holding that these are not allowable u/s 35D The Assessing Officer had compared the expenses allowable u/s 35D and the nature of expenses incurred by the appellant and held that the expenses incurred by the appellant are not in the nature of expenses allowable u/s 35D. 8.2 I find that in quantum appeal, in the case of the appellant for AY 2012-13, Hon. ITAT has directed as under:- “We have earlier held that the preoperative expenses should have been capitalized against the value of all assets Accordingly, we hold that the pre- operative expenses should be capitalized in the year of commencement of business. There should not be any dispute that the assessee shall be eligible to claim depreciation on the amount of capitalized Accordingly, we direct the Assessing Officer to allow depreciation applicable to the year under