MR. SHEKHAR DADARKAR , PROP. M/S. S.D CONSTRUCTION ,MUMBAI vs. ASSTT. COMMISSIONER OF INCOME TAX 31(3), MUMBAI

This appeal by the assessee is preferred against the order dated 27/04/2024 by NFAC, Delhi, [hereinafter ‘the ld. CIT(A)’] pertaining to AY 2008-09.

The solitary grievance of the assessee is that the ld. CIT(A) erred in confirming the levy of penalty u/s 271(1)(c) of the Act amounting to Rs. 3,52,380/-. 3. Briefly stated the facts of the case are that the assessee filed its return of income on 30/09/2008 declaring total income of Rs.54,16,070/- 2 which were subsequently revised on 29/09/2009 declaring total income of Rs.30,82,800/-. The return was assessed u/s 143(3) of the Act vide order dated 06/12/2020 determining the assessed income at Rs.38,01,670/-. Assuming the powers conferred upon him by the provisions u/s 263 of the Act, the PCIT, reviewed the order pursuant to which the AO assessed the total income at Rs.1,94,32,488/-after making the following additions:- a) nongenuine purchases – Rs. 2,09,547/- b) default in depositing TDS – Rs.77,55,361/- c) not deduction of TDs on payment of conducting charges – Rs.22,50,000/- d) proportionate disallowance of interest u/s 36(i)(iii) – Rs.54,15,910/- 4. The assessee preferred appeal before the ld. CIT(A) and the ld. CIT(A) confirmed the additions made by the AO on nongenuine purchases of Rs. 2,09,547/- and restricted the disallowance of interest to Rs.7,27,178/- and other additions where deleted. Penalty proceedings were separately initiated on the original additions though, subsequently it was pointed out to the AO that the ld. CIT(A) has deleted other additions and has restricted the addition on account of interest to Rs.7,27,178/- which is an ad hoc addition. The contention of the assessee did not find any favour with the AO who levied penalty on account of nongenuine purchases of Rs.2,09,547/- and addition of Rs.7,27,178/-. 4.1. Assessee preferred an appeal before the ld. CIT(A) but without any success. 5. Before us, the ld. Counsel drew our attention to the ledger account of M/s. Sally Décor to which the assessee credited Rs.2,09,547/- on 3