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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
Before: SHRI D. KARUNAKARA RAO, AM & SHRI AMARJIT SINGH, JM
PER AMARJIT SINGH, JM:
The assessee has challenged the order dated 05.10.2012 passed by the learned Commissioner of Income Tax (Appeals) 35, Mumbai [hereinafter referred to as the learned “CIT(A)”] relevant to the A.Y.2006-07 wherein the learned CIT(A) confirmed the penalty to the tune of Rs.4,17,220/- u/s. 271(1)(c) of the Income Tax Act, 1961. Assessment Year: 2006-07
The assessee has raised the following ground:-
That the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in sustaining the penalty Rs.4,17,220/- levied under Section 271(1)(c) of the Income Tax Act, 1961 (the Act) by the learned Assessing Officer on account of disallowance of Rs.10,59,230/- in respect of Project Vrindavan Complex on the ground that the appellant has furnished inaccurate particulars and concealed income.
The learned Authorities failed to discharge the burden cast on them to prove that the assessee has furnished inaccurate particulars or concealed particulars of income before levying penalty u/s. 271(1)(c) of the Act.
The learned Authorities ought not to have levied penalty in the absence of a finding of malafide conduct on the part of the assessee.
The appellant is a firm and its assessment was completed on 26.12.2008 determining total income to the tune of Rs.15,04,694/- as against the returned loss to the tune of Rs.9,57,605/-. After the scrutiny assessment the Assessing Officer made the following additions:-
Rs.10,59,230/- in respect of Project Vrindavan Complex
Rs.5,00,000/- in respect of Project Sai Ashirwad
Rs.13,77,556/- under section 40(a)(ia) of the Income Tax Act, 1961
2 Assessment Year: 2006-07
1 After the above said addition the appellant went in the appeal before the learned CIT(A) and the learned CIT(A) deleted the addition no.2 and 3 and upheld the addition in connection with the Vrindavan complex mentioned above. Thereafter, Assessing Officer initiated the penalty proceeding and imposed the penalty to the tune of Rs.4,17,220/-. Thereafter, under appeal the learned CIT(A) upheld the penalty order passed by the Assessing Officer. Feeling aggrieved the assessee is before us.
We have heard the arguments advanced by the learned representative of the parties and have gone through the file. In the instant case penalty has been imposed on the ground of addition sustained by the learned CIT(A). The finding of the learned CIT(A) in this connection is reproduced as under:-
(i) a sum of INR 5,39,514/- represents sale proceeds of Flat No. C-403 was to be adjusted against deposit of INR 21,00,000/- to be received from M/s. Kalaria Construction, but the same was inadvertently included in the sale of flats during A.Y. 2005-06 and was offered to tax and such mistake was rectified during the year in the books of the Appellant.
(ii) similarly, the appellant wrongly treated the repayment of deposit of INR 7,00,000 out of the total deposit of INR 21,00,000 by M/s. Kalaria Constructions by reducing the 3 Assessment Year: 2006-07
construction cost during the period of A.Y. 2005-06. As a result higher income was offered in A.Y.2005-06, however the Appellant rectified such mistake during this year.
iii) Rs.1,80,284/- being liability payable to M/s. Kalaria Construction in respect of the above project was not longer payable hence written off and reduced from the expenses in respect of the said project.
1 It is argued that the claiming of expenses by rectifying their accounting mistake or error added in earlier year accounts is not the case of furnishing inaccurate particulars of his income and the concealment of particulars of his income. It is also argued that the facts and circumstances of the present case leads to the facts and circumstances that the assessee was not liable to be pay the tax and was eligible to deduction u/s.80IB(10). The ground to levy the penalty are the above said three additions vide which two have been deleted and one addition regarding the Vrindavan Project has been sustained. The learned CIT(A) in the appeal of assessment order gave the above mentioned finding which speaks about the mistake of assessee and got rectified lateron. No doubt when this fact have enumerated in the judgement passed by the learned CIT(A) then in the said circumstances apparently the case of the appeal does not fall within the ambit of concealment of income or furnishing of inaccurate particular of his income. In this regard
4 Assessment Year: 2006-07
there are catina of judgements passed by the courts of law out of which some are mentioned below i.e. T.Ashok Pai Vs. Commissioner of Income Tax [2007] 292 ITR 11 (SC), [2013] 352 ITR 592 (Bombay High Court), Commissioner of Income Tax Vs. Sidhartha Enterprises [2010] 322 ITR 80 (P&H लेखा सद"य / ACCOUNTANT MEMBER "या"यक सद"य/JUDICIAL MEMBER मुंबई Mumbai; "दनांक Dated : 16th March, 2016 MP MP MP MP
5 Assessment Year: 2006-07
आदेश क" ""त"ल"प अ"े"षत/Copy of the Order forwarded to : 1. अपीलाथ" / The Appellant
""यथ" / The Respondent. 3. आयकर आयु"त(अपील) / The CIT(A)- 4. आयकर आयु"त / CIT
"वभागीय ""त"न"ध, आयकर अपील"य अ"धकरण, मुंबई / DR, ITAT, Mumbai 6. गाड" फाईल / Guard file. आदेशानुसार/ BY ORDER, स"या"पत ""त //// उप/सहायक पंजीकार (Dy./Asstt.