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Income Tax Appellate Tribunal, “D”, BENCH MUMBAI
Before: SHRI R.C.SHARMA, AM & SHRI SAKTIJIT DEY, JM Shri
PER R.C.SHARMA (A.M): This is an appeal filed by the assessee against the order of CIT(A)—26, Mumbai dated 28/03/2016 for the A.Y.2009-10 in the matter of penalty imposed u/s.271(1)(c) of the IT Act.
Rival contentions have been heard and record perused.
AO has levied penalty vide its order dated 25/06/2012 with respect to the following additions:-
Prior Period Expenses Rs. 3,18,466/-
Cessation of liability U/s. 41(1) Rs. 2,58,216/-
Addition u/s.40A(3) Rs. 12,505/-
Interest paid on loans Rs. 1,89,205/-
Unverified loans and advances Rs.61,95,692/- Total Rs.69,74,084/-
2 Shri Rama Sahebro Waghmare
In an appeal filed before the CIT(A) vide order dated 22/12/2015, the CIT(A) deleted all the additions except addition made on account of Prior Period Expenses amounting to Rs.3,18,466/-.
In view of the quantum additions being deleted by CIT(A), penalty do not survive in respect of addition so made except Prior Period Expenses. We found that issue of prior period expenses is debatable in so far as assessee has genuinely claimed the expenditure incurred during the year, but the AO disallowed the same by presuming that it is related to the earlier year. As per our considered view, penalty u/s.271(1)(c) is not imposable in respect of such debatable issue. Accordingly AO is directed to delete penalty imposed for disallowance of prior period expenses of Rs.3,18,466/-.
In the result, appeal of the assessee is allowed. Order pronounced in the open court on this 12/04/2017 (SAKTIJIT DEY) JUDICIAL MEMBER Mumbai; Dated 12/04/2017 Karuna Sr.PS Copy of the Order forwarded to : The Appellant
The Respondent.
The CIT(A), Mumbai.
CIT
DR, ITAT, Mumbai
BY ORDER,
Guard file. सत्यापित प्रतत //// (Asstt.