DOSANI PROPERTIES LIMITED,MUMBAI vs. DCIT-3(3), MUMBAI

आदेश / O R D E R PER SHRI SAKTIJIT DEY, JAM:

- 2 - 2. Briefly the facts are, the assessee, a resident company, is engaged in the business of providing business support services, investments in shares and securities and share trading. For the assessment year under dispute, the assessee filed its return of income on 15.10.2010 declaring loss of Rs. 39,34,508/-. During the assessment proceeding the Assessing Officer noticed that the assessee has debited an amount of Rs. 8,76,706/- to the profit and loss account towards expenditure incurred for promotion and advertisement. Noticing the above, the Assessing Officer called upon the assessee to prove the genuineness of such expenditure through supporting evidences. Though, the assessee furnished the break-up of such expenses, however, the Assessing Officer rejecting the submissions made by the assessee disallowed the amount of Rs. 8,76,706/-. Further, he found that the assessee has claimed loss of Rs. 22,25,839/- on sale of motor car. Being of the view that such loss capital loss, hence, should have been disallowed by the assessee while computing his business income, the Assessing Officer disallowed the loss of Rs. 22,25,839/-, and added back to the income of the assessee. However, he allowed the short term capital loss M.M. Dosani Properties Ltd., Mumbai.

- 3 - on sale of motor car for an amount of Rs. 16,35,266/-. Admittedly, the couple of additions made by the Assessing Officer, as discussed above, were accepted by the assessee. On the basis of the aforesaid additions, the Assessing Officer initiated proceedings for imposition of penalty under Section 271(1)(c) of the Act alleging furnishing of inaccurate particulars of income and concealment of income. Though, the assessee furnished his explanation objecting to initiation of penalty proceedings and also stated that there is no contumacious conduct of the assessee to either furnish inaccurate particulars of income or concealment of income, however, rejecting the explanation of the assessee the Assessing Officer proceeded to impose penalty under Section 271(1)(c) of the Act for an amount of Rs. 4,53,389/-. Though, the assessee challenged the penalty order so passed before the First Appellate Authority, however, it was unsuccessful.

- 4 - the penalty order passed under Section 271(1)(c) of the Act cannot be sustained. In support, he relied upon the decision of the Tribunal in the case of HC Jahangeer Vs. ACIT in dated 17.05.2017. Without prejudice, he submitted, the additions on the basis of which the Assessing officer has imposed penalty under Section 271(1)(c) of the Act were not made as a result of any inaccurate particulars furnished by the assessee or concealment particulars by the assessee. He submitted, assessee has made a bonafide claim of deduction which has been rejected by the Assessing Officer. He submitted, merely because the assessee has accepted the disallowance / addition made by the Assessing Officer, it will not lead to the conclusion that the assessee has either furnished inaccurate particulars of income or has concealed its income. Thus, he submitted, no case of imposition of penalty u/s 271(1)(c) of the Act is made out.

- 5 - furnished inaccurate particulars of income. That being the case, imposition of penalty under Section 271(1)(c) of the Act is justified.

- 6 - inaccurate particulars of income or concealing income. In so far as claim of excess loss on account of sale of motor car, it is the claim of the assessee that such excess loss was claimed inadvertently due to ignorance. The learned Authorized Reprehensive has submitted, during the assessment proceeding the assessee has furnished a working of short term capital loss on sale of motor car and the Assessing Officer has accepted such loss and allowed carry forward of the same. In our view, the excess claim of loss was because of the fact that the assessee has debited it to his profit and loss account. The explanation of the assessee that, it is a bonafide and inadvertent mistake is acceptable. Therefore, even in respect of this addition also, there cannot be any allegation of either furnishing inaccurate particulars of income or concealment of income. In view of the aforesaid, we hold that the imposition of penalty under Section 271(1)(c) of the Act in the present case is uncalled for. Accordingly, we delete the penalty imposed of Rs. 4,53,389/- under Section 271(1)(c) of the Act. In view of our aforesaid decision on merit, we do not consider it necessary to deal with the submissions made by M.M. Dosani Properties Ltd., Mumbai.

- 7 - the learned Authorized representative regarding validity of the penalty order. 6. In the result, the appeal is allowed as indicated above. This Order is pronounced in Open Court on 05 .01.2020 Sd/– Sd/– (SAKTIJIT DEY) (G. MANJUNATHA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 05.02.2020 KRK, PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / The CIT(A) 4. आयकर आयु�त(अपील) / Concerned CIT �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Mumbai 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy//

उप/सहायक पंजीकार ( Asst. Registrar) आयकर अपील�य अ�धकरण, अहमदाबाद / ITAT, Mumbai