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Income Tax Appellate Tribunal, MUMBAI BENCH “B” MUMBAI
Before: SHRI MAHAVIR SINGH & SHRI N.K. PRADHAN
ORDER
PER N.K. PRADHAN, AM
This is an appeal filed by the Revenue. The relevant assessment year is 2009-10. The appeal is directed against the order of the Commissioner of Income Tax (Appeals)-26, Mumbai [in short ‘CIT(A)’] and arises out of the penalty levied u/s 271 (1) (c) of the Income Tax Act 1961, (the ‘Act’).
Broadly stated, the grounds of appeal are against the order of the Ld. CIT (A) directing the Assessing Officer (AO) to delete the penalty of Rs. 48,65,940/- on the basis that the assessment order which formed the basis on which penalty was levied, has been set aside by the ITAT with the direction to reframe the assessment by estimating profit @ 10% on work- in-progress (WIP).
3. The brief facts are that the assessee, a builder and developer filed its return of income for the assessment year (AY) 2009-10 on 30.09.2009 declaring total income of Rs. 75,43,056/-. In the assessment completed u/s 143 (3) dated 29.12.2011, the AO made an addition of Rs. 96,40,093/-. This amount of addition was arrived at by determining the taxable profit at Rs. 1,94,65,164/- which was stated to be 10% of WIP and stock-in-trade of Rs. 19,46,51,638/- from various projects. As the assessee had already offered Rs. 98,25,071/- as per the profit & loss account, the AO made an addition of the balance amount of Rs. 96,40,093/- to the total income of the assessee. Thereafter, the AO vide order dated 26.03.2014 levied a penalty of Rs. 48,65,940/- u/s 271 (1) (c) on the ground that the assessee has concealed the particulars of its income and furnished inaccurate particulars of such income by not offering to tax 10% of WIP in respect of incomplete Costarica project, which was consistently being followed by the assessee in his other projects.
In appeal, the Ld. CIT (A) followed the order dated 11.12.2014 of the Tribunal in assessee’s own case for the impugned assessment year and deleted the penalty of Rs. 48,65,940/- on the reason that the assessment order which formed the basis on which penalty was levied has been set aside by the ITAT with the direction to reframe the assessment by estimating profit @ 10% on WIP. 5. Before us, the Ld. DR reiterates the grounds of appeal
and supports order of the AO. On the other hand, the Ld. counsel for the assessee relies on the order of the Ld. CIT (A).
6. We have heard the rival submissions and perused the relevant material on record. It is pertinent to refer here to the order of the Tribunal 2 for the impugned assessment year. In the said order, the Tribunal has set aside the order of the lower authorities for making addition by estimating 10% profit on WIP for both the assessment years 2009-10 and 2010-11 and directed the AO to reframe the assessment keeping in view their observation in the order. The relevant paras 8 to 11 of the order of the Tribunal have been extracted by the Ld. CIT (A) at para 4.4 (page 5-7) of his order dated 19.12.2017. As the quantum order on the basis of which the penalty has been levied by the AO has been set aside by the ITAT, we uphold the order of the Ld. CIT (A).
7. In the result, appeal filed by the revenue is dismissed. Order pronounced in the open Court on 20.06.2019.