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Income Tax Appellate Tribunal, DELHI BENCH: ‘D’ NEW DELHI
Before: SHRI I.C. SUDHIR & SHRI L.P. SAHU
ORDER PER I.C. SUDHIR, JM
The assessee has questioned the levy of penalty u/s 271(1)(c) of the Act at Rs. 4,92,817/- sustained by the ld. CIT(A). The assessee has raised several grounds in this regard involving the sole issue regarding the validity of the levy of penalty in question.
We have heard and considered the arguments advanced by the parties in view of the orders of the authorities below, material available on record and the decisions relied upon.
Assessment year 2009-10 3. The relevant facts are that the Assessing Officer had made additions of Rs.14,53,737/- consisting of Rs. 1,71,000/- on account of income from interest, Rs.44,008/- on account of difference in income and Rs.12,38,729 on account of loss on fixed assets claimed as revenue expenditure. The Assessing Officer imposed penalty of Rs.4,92,817/- u/s 271(1) (c) of the Act on the said addition of Rs. 14,53,737. Ld. CIT(A) held that so far as explanation with regard to interest income amounting to Rs.1,71,000/- is concerned, there was no concealment. With regard to the addition of Rs. 44,008/- being difference on account of clerical error, the ld. CIT(A) found that there was no malafide intention to conceal the income. So far as the addition of Rs.12,38,729 is concerned, the ld. CIT(A) found that assessee had claimed revenue expenditure of loss on capital assets which was a patently wrong claim and not allowable as revenue expenditure. He held that loss on capital expenditure cannot be claimed as revenue expenditure and it is not a debatable issue. Ld. CIT(A) has accordingly sustained the penalty levied on the addition of Rs.12,38,729/- and deleted the penalty levied on remaining additions of Rs.1,71,000 and Rs.44,008/-.
Ld. AR submitted that the loss on sale of fixed assets amounting to Rs.12,38,729/- has been erroneously claimed as revenue expenditure and the same was thus not allowed. There was no mala fide behind the same but it was a bona fide mistake without any intention to deprive the revenue of any Assessment year 2009-10 legitimate tax. He submitted that the assessee has been suffering heavy losses and erroneously reported the capital loss under the head ‘business and profession’. The omission was purely unintentional and occurred due to a clerical error on the part of the assessee. There is no loss to the revenue on account of this clerical mistake. The assessee had placed all facts on record at the time of assessment and there was no concealment of any material fact by the assessee. He placed reliance on the following decisions:-
i) CIT vs Reliance Petroproducts Pvt. Ltd. (2010) 322 ITR 158(S.C.) ii) Price Water Coopers Pvt. Ltd. vs CIT (2010) 348 ITR 306 (S.C.) iii) CIT vs Harshwardhan Chemicals & Minerals Ltd. 259 ITR 112
(Raj.)
Ld. DR, on the other hand, placed reliance on the orders of the authorities below. He submitted that the assessee had made a wrong claim on the loss on sale of fixed assets amounting to Rs.12,38,729/-, thus, there was concealment of particulars of income or furnishing of inaccurate particulars thereof in this regard on the part of the assessee to justify levy of penalty.
Considering the above submissions, we find that all the necessary information relating to the addition of Rs.12,38,729/- made on account of loss of fixed assets claimed as revenue expenditure by the assessee was undisputedly made available on record on the basis of which the addition was made, hence, it cannot be said beyond doubt that there was concealment of particulars of 3 Assessment year 2009-10 income or furnishing of inaccurate particulars thereof on the part of the assessee towards the addition in question. In this regard, we also find strength from the ratio of the above cited decisions. We, thus, while setting aside the orders of the authorities below, direct the Assessing Officer to delete the penalty levied u/s 271(1)(c) of the Act at Rs.4,92,817/-. The ground is accordingly allowed.
In the result, the appeal is allowed.
Order pronounced in the open court on 11.12.2015.