DCIT CENT. CIR. 4(1), MUMBAI vs. OBEROI CONSTRUCTIONS, MUMBAI

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ITA 5998/MUM/2016Status: DisposedITAT Mumbai31 July 2018AY 2011-123 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal confirmed the order of the CIT(A) in deleting the penalty. This was based on the fact that the addition on which the penalty was levied had already been deleted by the ITAT in the assessee's own case for the same assessment year.

What were the facts?

The revenue appealed against the deletion of penalty by the CIT(A) concerning penalty paid to BMC for unauthorized construction and fine paid for importing marbles without a license. The penalty was levied on an addition of Rs. 32,66,990/-.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable when the underlying addition on which it was based has been deleted. Whether penalty payments for unauthorized construction and import violations are allowable expenses.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 37(1)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: SHRI G. S. PANNU, AM & SHRI AMARJIT SINGH, JM

Hearing: 08.05.2018Pronounced: 31.07.2018

O R D E R

PER AMARJIT SINGH, JM:

1.

The revenue has filed the present appeal against the order dated 22.07.2016 passed by the Commissioner of Income Tax (Appeals) -52, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2011- 12.

2.

The revenue has raised the following grounds: - "1. "Whether on the facts and in the circumstances of the case and in law, the Ld. CLT1A} has erred in deleting penalty u/s 27l(l)(c) on account of penalty payment made to BMC for unauthorized construction and fine paid to Custom Authorities for importing marbles without

ITA No. 5998/M/2016 A.Y.2011-12

License as it is not allowable as per explanation to Section 37(1) of the Income Tax Act, 1961 and penalty is leviable for producing inaccurate information and concealment of income?" 2. "The Appellant craves to leave, to add, to amend and / or to alter any of the ground of appeal

, if need be." The Appellant, therefore, prays that on the ground stated above, the order of the Ld CIT(A)-52, Mumbai may be set aside grid that of the Assessing Officer restored.”

3. The present appeal is time barred for 20 days which is not so delayed therefore, on seeing the circumstances that the matter of controversy is required to be decided on merits, therefore, we condone the delay. We have heard the argument advanced by the Ld. Representative of the parties and perused the record. At the very outset, the Ld. Representative of the assessee has argued that the CIT(A) has deleted the penalty on merits by relying upon the law settled by the different authorities of law, therefore, there is no need to interfere with the order of the CIT(A) in accordance with law. It is also argued that the addition on the basis of which the penalty has been levied, has been deleted by Hon’ble ITAT in the assessee’s own case for the A.Y. 2012-13 in dated 19.05.2017, therefore, the penalty has no leg to stand hence the CIT(A) has rightly deleted the penalty. However, on the other hand, the Ld. Representative of the Department has refuted the said contention. On appraisal of the order, we noticed that the penalty has been levied by the AO upon the amount of Rs.32,66,990/- paid as penalty to the BMC Mumbai. Undoubtedly, the CIT(A) has deleted the penalty on the basis of the law settled in Price Waterhouse Coopers Pvt. Ltd. Vs. CIT- (2012) 348 ITR 0306 (SC), Kanbay Software India Pvt. Ltd. (122 TTJ 721) & CIT Vs. Reliance Petroproducts Pvt. Ltd.(supra), CIT Vs.Caplin Point Laboratories Ltd. (293 ITR 254), CIT Vs. Harshvardhan Chemicals & Mineral Ltd. (259

ITA No. 5998/M/2016 A.Y.2011-12 ITR 212 (2003), CIT Vs. S.M. Construction (ITA. No. 412 of 2013 etc. Anyhow, at the stage, there is no need to interfere in the finding of the CIT(A) because the addition on which the penalty has been levied, has been deleted by Hon’ble ITAT by virtue of order dated 19.05.2017 in for the A.Y.2011-12. Since the addition has been deleted, therefore, in the said circumstances, the penalty has no leg to stand hence the penalty has been rightly deleted by the CIT(A). Accordingly, we confirm the order of the CIT(A) on this issue and dismissed the appeal of the revenue.

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