M/S. PROTON EDUCATION TRUST,INDORE vs. THE ITO-EXEMPTION, INDORE

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ITA 364/IND/2017Status: DisposedITAT Indore25 May 2018AY 2010-116 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 held that since the quantum addition of Rs. 13,20,000/- was deleted by a previous order of the ITAT, the penalty levied on that addition would not survive. Therefore, the penalty was deleted.

What were the facts?

The assessee appealed against a penalty imposed under Section 271(1)(c) of the Income-tax Act. The penalty was based on a quantum addition of Rs. 13,20,000/- made by the Assessing Officer.

What were the issues?

Whether a penalty under Section 271(1)(c) can survive if the underlying addition is deleted. The validity of the quantum addition itself was also an issue.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI KUL BHARAT & SHRI MANISH BORAD

आदेश /O R D E R

PER KUL BHARAT, J.M. : This appeal has been filed by the assessee against the

imposition of penalty of Rs. 14,09,770/-u/s 271(1)(c) of

the Income-tax Act, 1961, imposed by the Assessing Officer

and confirmed by the Ld. CIT(A)-II, Indore, vide his order

dated 01.02.2017.

2.

The Ld. Counsel for the assessee contended that the

quantum addition of Rs. 13,20,000/- made by the AO is

deleted by the I.T.A.T., Indore Bench vide its order passed

in I.T.A.No. 83/Ind/2015 dated 30.05.2017. Since the

quantum addition is deleted, penalty will not survive.

3.

The Ld. Departmental Representative agreed to the

submission of the Ld. Counsel for the assessee.

-: 3 :- 4. We have considered the facts, rival submissions and

perused the material available on record. We have also

perused the order of the Tribunal passed in I.T.A.No.

83/Ind/2015 dated 30.05.2017, where the Tribunal has

held as under :-

“16. We have considered the facts, rival submissions and perused the material available on record and precedents relied upon. It is seen that AO disallowed the rent of Rs. 13,20,000/- paid in respect premises taken on rent from M/s P.T. Education P. Ltd. on the ground that it was more by Rs. 1,10,000/- per month as compared to the premises taken on rent by the assessee at Ahmedabad from M/s Anokhi Reality (3rd Party). The CIT(A) has also upheld the same by observing that the claim made regarding difference in area of 20000 sq. ft. vs. 6100 sq. ft. in respect of Indore premises and Ahmedabad premises, the copy of agreements were not filed by the assessee. However, we find that the assessee has duly field the copy of agreement entered into with M/s P.T. Education P. Ltd. and M/s Anokhi Reality as per the submissions made by the assessee vide letter dated 28.10.2010 (copy of agreement is placed at page no. 19-38 of paper book). This is also discernible from para1 of assessment order that

-: 4 :- rent agreements with Anokhi Reality P. Ltd. were also filed before the AO, however, it appears that the Ld. CIT(A) has lost sight of, to look into these evidences filed before him. It is seen from the copy of agreement that the assessee has taken space of 20000 sq. ft. at Indore at monthly rent of Rs. 4,30,000/- from P.T. Education P. Ltd. with deposit of Rs. 20 lacs. Similarly, the assessee has taken another space at Ahmedabad being area of 6100 sq. ft. at monthly rent of Rs. 3,20,000/- per month with deposit of Rs. 7 lacs. from Anokhi Reality. Thus, the rent of Indore property comes to Rs. 2.15 per sq. ft. (4,30,000/20,000) whereas rent for Ahmedabad property comes to Rs. 52.45 per sq. ft. (3,20,000/6100). Hence, the property taken by the assessee on rent from sister concern M/s P.T. Education P. Ltd. at much lesser rent in comparison to property at Ahmedabad. Therefore, we are of the view that there is no excess payment to sister concern on account of rent as held by the lower authorities. Therefore, the addition of Rs. 13,20,000/- made on this account is deleted. Accordingly, ground no. 2 is allowed.

Since the quantum addition has been deleted by the 5.

I.T.A.T. Indore Bench vide its order passed in I.T.A.No.

83/Ind/2015 dated 30.05.2017, the penalty will not

-: 5 :- survive. The penalty amounting to Rs. 14,09,770/- u/s 271(1)(c) imposed by the AO and confirmed by the Ld. CIT(A), is deleted. In the result, the appeal filed by the assessee is 6. allowed. The order pronounced in the open court on 25.05.2018.

Sd/- Sd/- (मनीष बोरड) (कुल भारत) लेखा सद�य �या�यक सद�य (KUL BHARAT) (MANISH BORAD) ACCOUNTANT MEMBER JUDICIAL MEMBER

Indore; �दनांक Dated : 25/05/2018 CPU*/SPS Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order

-: 6 :- Private Secretary/DDO, Indore

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