KUSHAL NAMO DEVELOPERS,PUNE vs. ACIT, CIRCLE-5, PUNE, PUNE

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ITA 1243/PUN/2023Status: DisposedITAT Pune11 January 2024AY 2013-14Bench: SHRI SATBEER SINGH GODARA (Judicial Member), DR. DIPAK P. RIPOTE (Accountant Member)3 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 a mere excessive claim of expenditure deduction does not automatically attract penalty proceedings. The penalty was deleted as it was not a case of an altogether incorrect provision but an excessive claim that was subsequently reversed.

What were the facts?

The assessee made a provision for expenses related to uncompleted work and amenities. The revenue found this provision to be excessive by Rs. 4,87,43,725/-, which was reversed in the subsequent assessment year. The assessee appealed the penalty levied for furnishing inaccurate particulars of income.

What were the issues?

Whether an excessive claim of expenditure, which is subsequently reversed, attracts penalty under Section 271(1)(c) for furnishing inaccurate particulars of income.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, PUNE “A” BENCH : PUNE

Before: SHRI SATBEER SINGH GODARA & DR. DIPAK P. RIPOTE

Hearing: 10.01.2024Pronounced: 11.01.2024

BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER I.T.A.No.1243/PUN./2023 Assessment Year 2013-2014 Kushal Namo Developers, The ACIT, Circle-5, 427/2, Poona Small Scale PMT Building Commercial Industries, Gultekdi, vs. Pune – 411 037. Complex, Shankar Sheth Maharashtra. Road, Swargate, Pune-411037 PAN AAKFK2918D (Applicant) (Respondent) For Assessee : -None- For Revenue : Shri Ramnath P Murkunde Date of Hearing : 10.01.2024 Date of Pronouncement : 11.01.2024 ORDER PER SATBEER SINGH GODARA, J.M. :

This assessee’s appeal for assessment year 2013- 2014, arises against the National Faceless Appeal Centre [in short “NFAC”] Delhi’s Din and Order No. ITBA/NFAC/S/250/2023-24/1056674663(1), dated 29.09.2023, involving proceedings u/s. 271(1)(c) of the Income Tax Act, 1961 (in short “the Act”).

Case called twice. None appears at assessee’s behest. It is accordingly proceeded ex-parte.

2.

Coming to the assessee’s sole substantive grievance challenging correctness of both the learned lower authorities

2 I.T.A.No.1243/PUN./2023 action levying sec. 271(1)(c) penalty of Rs.34,44,495/- thereby holding it to have furnished inaccurate particulars of income; Mr. Murkunde vehemently argued in light of the assessment findings dated 21.03.2016 as well as penalty order dated 26.09.2016 [latter uphold in the NFAC’s order before us] that it was found to have made an incorrect claim representing provision of Rs.11,40,30,000/- in the nature of several expenses to be incurred on account of un-completed work of stilled parking, amenities and developments, provision of electric transformer, fire fighting equipments etc. He accordingly pressed for upholding the impugned penalty levied by both the lower authorities.

3.

We have given our thoughtful consideration to assessee’s pleadings and Revenue’s vehement arguments. We find no reason to sustain the impugned penalty. This is for the precise reason that it is not a case of the assessee having found to have made an altogether incorrect provision of the foregoing expenses but excess amount to the tune of Rs.4,87,43,725/- only which duly stood reversed in the next assessment year 2014-2015. The Revenue could hardly dispute that although the assessee had given its due explanation in favour of the impugned excess provision by filing all the relevant details; the same could not be accepted for want of substantiation thereof. We are afraid that such a case of mere excessive claim of expenditure deduction would

3 I.T.A.No.1243/PUN./2023 not ipso facto attract the impugned penalty proceedings as held in CIT vs. Reliance Petro Products [2010] 322 ITR 158 (SC) wherein their lordships’ have duly quoted that quantum and penal actions are preliminary in nature where each and every disallowance does not call for levy of penalty. We follow the very principle herein as well to delete the impugned penalty of Rs.34,44,495/-. Ordered accordingly.

4.

This assessee’s appeal is allowed in above terms.

Order pronounced in the open Court on 11.01.2024.

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