TMI Blog2015 (9) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... SHRI N. K. SAINI AND SHRI H. S. SIDHU, JJ. For The Appellant : Shri R. S. Singhvi, CA For The Respondent : Ms. Kesang Y. Sherpr, Sr. DR ORDER PER H. S. SIDHU, JM: The assessee by filling present appeals sought to set aside the common order dated 25.10.2012 passed by Ld. CIT(A) upholding penalty of ₹ 54,85,590/- and ₹ 56,60,190/- imposed by the A.O. u/s 271(1)(c) of the I. T. Act, 1961 (hereinafter referred as Act ) for the Assessment Years 2005-06 and 2006-07. Since, the issue involved in both these appeals is identical and both these appeals were heard together, therefore, for the sake of convenience, both these appeals are being disposed of by way of this common order. The grounds taken by the assessee in both these appeals are identical and hence, grounds taken in I.T.A. No. 61/Del/2013 are reproduced as under: 1. That on the facts and in the circumstances of the case, the CIT(A) erred in law in not holding that penalty of ₹ 54,85,590 imposed by the assessing officer under section 271(1)(c) of the Income-tax Act, 1961 ( the Act ) is without jurisdiction and barred by limitation. 1.1 That on the facts and in the circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sultancy charges, legal charges and technical assistance charges. 3.3 That on the facts and in the circumstances of the case, the CIT(A) erred in law in 'upholding the penalty levied by the assessing officer, without appreciating that the assessing officer had made disallowance thereof on the incorrect assumption that (a) expenditure incurred in relation to Umaid Bhawan Palace represented project costs and (b) at the time of incurring thereof, the assessee was not carrying on any business. 4. That without prejudice to above, on the facts and in the circumstances of the case, the CIT(A) erred in law in hurriedly upholding the penalty order, without waiting for the decision of the quantum appeal pending before Hon'ble Delhi High Court. 2. Briefly stated the facts of the case are that the assessee filed return of income for the Assessment Year 2005-06 and during processing, the case of assessee was picked up for scrutiny and consequently, notices dated 30.10.2006 and 19.06.2007, u/s 143(2), were issued. In response, Ld. A.R. appeared from time to time and submitted the documents relied upon by the assessee. During the course of assessment proceedings, the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on difference of opinion between the appellant assessee and the A.O. The Ld. counsel for the assessee further submitted that Ld. CIT(A) vide impugned order has erred in law in upholding the penalty levied by A.O. without appreciating that the A.O. had made disallowance merely on the assumptions and surmises that expenditure incurred in relation to Umaid Bhawan Palace Project under the head project cost at the time of incurring thereof and the assessee was not carrying on any business; that since the disallowances made in the quantum proceedings were debatable in nature and were disputed on bona fide difference of opinion. Ld. CIT(A) has erred in up[holding the order of A.O. and relied upon the judgement cited by Ld. A.R. as noted below: i) CIT Vs Liquid Investors Trading Co. (Del.) ii) CIT Vs Nayan Builders Developers (P) Ltd. 368 ITR 722 iii) CIT Vs Reliance Petroproducts (P) Ltd. 322 ITR 158 (S. C.) iv) Karan Raghav Exports (P) Ltd Vs CIT 349 ITR 112 (Del.) v) New Holland Tractors (P) Ltd. Vs CIT (Del) vi) Carefour WC and C India P. Ltd. Vs DCIT 368 ITR 692. vii) CIT Vs Samsung India Electronics Ltd. 356 ITR 354 (Del.) 8. On the other hand, Ld . D. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R. prayed for dismissal of appeal of the assessee. 9. We have heard both the parties, considered rival contentions and perused the material on record and the orders of authorities below as well as order of ITAT dated 21.07.2011. Undisputedly, the assessee has claimed expenses to the tune of ₹ 1,49,91,020/- during the Assessment Year 2005- 06 on account of fee paid to ROC, depreciation, Umaid Bhawan Palace Project cost written off and other expenses in Assessment Year 2005-06, and ₹ 1,68,15,772/- on account of claim of depreciation and other expenses in Assessment Year 2006-07, which have been disallowed by the A.O. being not sustainable. Ld. A.R. relied upon Hon ble Apex Court s judgement in the case of CIT Vs Reliance Petroproducts Pvt. Ltd. 322 ITR 158 (S. C.) wherein it is held that mere making a claim which is not sustainable in law, by itself does not amount to furnishing of inaccurate particulars of income of the assessee. For ready reference the operative portion of the above judgement is reproduced below: Words and Phrases Particulars , meaning of. A glance at the provisions of Section 271(1)(c) of the Income ax Act, 1961, suggests that in ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f CIT Vs Nayan Builders and Developers, which reads as under: Having head Mr. Ahuja, Ld. Counsel appearing on behalf of the appellant, we find that this appeal cannot be entertained as it does not raise any substantial question of law. The imposition of penalty was found not to be justified and the appeal was allowed. As a proof that the penalty was debatable and arguable issue, the Tribunal referred to the order on assessee s appeal in quantum proceedings and the substantial questions of law which have been framed therein. We have also perused that order dated 27th September 2010 admitting income tax appeal No.2368 of 2009. In our view, there was no case made out for imposition of penalty and the same was rightly set side. The appeal raises no substantial question of law, it is dismissed. No costs. 11. Ld. Counsel for the assessee further stated that against the order of ITAT, assessee has filed appeal before Hon ble Delhi High Court, which his pending for adjudication. He has also filed a copy of order dated 24.07.2014 of Hon ble High Court to support this contention: In the High Court of Delhi at New Delhi I.T.A.278/2012 I.T.A.279/2012 I.T.A.280/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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