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2015 (7) TMI 402 - ITAT MUMBAI

2015 (7) TMI 402 - ITAT MUMBAI - TMI - Penalty u/s. 271(1)(c) - disallowance made u/s. 40(a)(ia) - CIT(A) deleted the levy - Held that:- The conduct of the assessee speaks for itself. We, therefore, set aside the findings of the Ld. CIT(A) and uphold the levy of penalty u/s. 271(1)(c) of the Act in so far as it relates to the claim of capital expenditure as revenue expenditure. Since the levy of penalty is deleted in respect of disallowance made u/s. 40(a)(ia) of the Act, we restore this issue t .....

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is clear that the Ld. CIT(A) has decided the issue in favour of the assessee without understanding the facts of the case and without comparing it with the facts of the earlier assessment year. This make the order of the Ld. CIT(A) erroneous. In the interest of justice and fair play, we restore this issue to the file of the Ld. CIT(A) to be decided afresh - Decided in favour of assessee for statistical purpose. - I.T.A. Nos. 330 & 331/Mum/2013 - Dated:- 18-3-2015 - Shri D. Manmohan And Shri N.K. .....

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d by the AO amounting to ₹ 455. 34 crores u/s. 271(1)(c) of the Act. 3. Briefly stated the facts of the case are that during the course of the scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has paid a sum of ₹ 1351.62 crores to M/s. Power Grid Corpn. Of India Ltd. and M/s. Maharashtra State Electricity Distribution Co. Ltd. for use of their electricity transmission network, pursuant to a Bulk Power Transmission agreement executed between the parties. .....

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d any error in the findings of the Ld. CIT(A). The Ld. CIT(A) has correctly held that no penalty can be levied as the quantum additions have been deleted by the Tribunal. 4.1. Proceeding further, during the course of the assessment proceedings, the AO found that the assessee has claimed ₹ 1,15,07,000/- as Revenue expenditure on account of meter equipment. The assessee was asked to explain as to why the excess claim of expenditure as pointed out by the CAG in his report should not be disall .....

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ts therefore there is no question of any concealment. 4.3. After considering this explanation of the assessee, the AO observed that during the course of audit by the CAG party, it came to the notice that the assessee instead of capitalizing the expenditure incurred on cost of new meters claimed the same as revenue therefore there was overstatement of revenue expenditure . The AO was convinced that the assessee has claimed a wrong expenditure, therefore, liable for penalty u/s. 271(1)© of th .....

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ved by this, the Revenue is before us. 7. In so far as the deletion of penalty on disallowance made u/s. 40(a)(ia) is concerned, the Ld. Departmental Representative fairly conceded that the quantum additions have been deleted by the Tribunal, therefore there is no basis for the levy of penalty. In so far as the levy of penalty on overstatement of expenditure is concerned, the DR strongly supported the assessment order. It is the say of the Ld. DR that by claiming capital expenditure as revenue e .....

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any concealment of particulars. In support of his claim, the assessee relied upon the decision of the Tribunal in the case of Gurbux Kaur Sandhu Vs Inspecting ACIT 15 TTJ (CHD)128, Mumbai Bench in the case of Dena Bank in ITA Nos. 6336 to 6339/M/1983. The Ld. Counsel also relied upon the decision of the Hon ble Calcutta High Court in the case of Smt. Bani Roy Choudhary 131 ITR 578 and on the decision of the Hon ble Supreme Court in the case of Cement Marketing Co. 124 ITR 15. 9. We have careful .....

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see did not file any revised return of income but the assessee at the same time contested the disallowance made by the AO in the appeal filed before the Ld. CIT(A). The Ld. CIT(A) confirmed the disallowance made by the AO. 10. The assessee carried the matter before the Tribunal though did not press the ground relating to this disallowance but the fact of the matter is that the assessee did contested this disallowance before the Tribunal. This conduct of the assessee clearly distinguishes the fac .....

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sidered opinion, the conduct of the assessee speaks for itself. We, therefore, set aside the findings of the Ld. CIT(A) and uphold the levy of penalty u/s. 271(1)(c) of the Act in so far as it relates to the claim of capital expenditure as revenue expenditure. 11. Since the levy of penalty is deleted in respect of disallowance made u/s. 40(a)(ia) of the Act, we restore this issue to the file of the AO with a direction to recompute the penalty in respect of the claim of capital expenditure as rev .....

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venue. The Ld. Counsel for the assessee placed the order of the Tribunal for A.Y. 2007-08 and 2008-09 in ITA Nos. 2276 , 2405, 7539 & 8572/M/2011. 15. The Ld. Departmental Representative pointed out that the facts are totally different and therefore the issues cannot be taken as covered in favour of the assessee. 16. The Ld. Counsel for the assessee rebutting to the statement made by the Ld. DR, drew our attention to the findings of the Ld. CIT(A) pointing out that the Ld. CIT(A) has followe .....

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rder which reads as under: Addition on account of unbilled revenue The CAG in its comments on Revenue from sale of power has stated as under: The above is understated due to a) Non-accountal of supplementary bills on introduction of new tariff categopry HT-II commercial at Rastapeth- ₹ 644.71 lakhs b) Non-consideration of unbilled revenue for reliability charges for zero load shedding in Pune city at Rastapeth and at Ganesh Khind-Rs. 150.45 lakhs. In reply to the comment of the CAG, the as .....

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