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2015 (9) TMI 1517 - ITAT MUMBAIPenalty u/s 271(1)(c) - accrual of income - year of assessment - difference of income due the re-computation of WIP - delay in filing appeal - Held that:- We find that the assessee had filed the death certificate of the accountant and we hold that there was a reasonable cause for not filing the appeal in time. We find that the FAA had dismissed the appeal not only because it was filed lat, but he had deliberated upon the issue on merits also. Therefore, in our opinion, the issue of delay in filing return is academic in nature. Coming to the merits as found that the AO had re-calculated the WIP and had taxed it in the year under appeal. The assessee has not proved, during the assessment and appellate proceedings, that the income had not accrued to it-even after receiving the OC and CC. It had to produce documentary evidence that even after getting the certificates the projects remained incomplete and it had to incur substantial expenditure for completing them. We do not find any such exercise was done by it. Therefore, if the AO and the FAA held that the assessee had completed the projects in the year under appeal and had not offered the corresponding income in the year in which it should have been offered, then they were not unjustified. While deciding the concealment penalty cases what is to be considered is the explanation filed by the assessee in response to the notice issued by the AO for levying penalty. During the course of survey proceedings and enquiries made by the Department, it was found that the projects undertaken by the assessee had already completed and were occupied by the purchasers. Thus in absence of any contrary evidence it could not be said that projects were in the stage of work in progress it is a fact that the assessee was following method of project completion. The FAA has given categorical finding of fact that after 31.3.2002 very little expenses was incurred by the assessee for completing the so called projects and that it had incorrectly claimed in the return of income that the projects were incomplete. - Decided against assessee.
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