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2015 (9) TMI 1293 - ITAT DELHI

2015 (9) TMI 1293 - ITAT DELHI - TMI - Levy of penalty under section 271(1)(c) - appellant tendered an explanation saying that the additions were as a result of bona fide mistaken occurred at the time of preparation of return of income - Held that:- We are of the considered opinion that the appellant had no intention of concealing the particular of the claim made, having regard to the fact that full disclosure was made of the items written off in the schedule XI financial statement, and the appe .....

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ase under Section 271(1)(c) of the Act. Hence, the appeal filed by the assessee is allowed in full. - Decided in favour of assessee. - ITA No. 6115/Del/2013 - Dated:- 4-9-2015 - SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER For The Appellant by : Sh. Ajay Wadhwa, Adv. For The Respondent by : Sh. Vikram Sahay, Sr. DR ORDER PER INTURI RAMA RAO, A.M.: This appeal by the assessee is directed against the order of CIT(A), dated 03.09.2013 passed for the assessment year .....

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&L A/c, gross amount of ₹ 1,00,18,799/- was credited as other income. Out of the said amount of ₹ 1,00,18,799/-, a sum of ₹ 83,24,819/- was not taxable, however, inadvertently deduction of entire amount was claimed. 3. That on facts and circumstances of the case and in law, the CIT(A) erred in not appreciating that assessee had carried forward losses and depreciation of more than 1,00,00,000/- and the business of manufacturing of cement had already been stopped, therefore, .....

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Act ), at a total income of ₹ 2,70,99,249/- after making additions on the following three items: i. Expenses not allowed as no business done : ₹ 5,53,714/- ii. Addition on account of cash credit u/s 68 : ₹ 1,47,30,00/- iii. Disallowed claim of the assessee u/s 43B : ₹ 1,00,18,799/- On appeal before the CIT(A), the CIT(A) allowed the grounds relating to addition on account of cash credit under Section 68 of the Act and the interest claimed under Section 43B of ₹ 83, .....

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had incurred expenditure by way of interest payable to HFC in five years, which was written back in this year. However, in the earlier years, the admitted position is that the expenditure by way of interest was not claimed by the assessee in computing the income. In such a situation, the liabilities by way of interest did not constitute expenditure incurred in earlier years and, therefore, on writing back the amount in profit and loss account, they cannot be deemed to be the income of the asses .....

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Iyengar & Sons Ltd. (supra). This matter has not been considered by the learned CIT(Appeals). Therefore, this matter is restored to the file of the AO with a view to decide the same de-novo after hearing the assessee and keeping the aforesaid decision of the Hon ble Suprme Court in mind. Thus, this ground is partly allowed, as discussed above. 2.1 Pursuant to the above order of the Tribunal, a consequential order dated 23rd December, 2010 was passed assessing taxable income at ₹ 40,44, .....

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tating that in respect of these items, the penalty proceedings were not initiated at the time of original assessment. He further submitted that it is a bona fide mistake committed at the time of preparation of return of income by inadvertence in the amount of ₹ 1,00,18,799/- which was adopted in place of 83,24,819/-, while working out the deduction under Section 43B of the Act. The explanation of the appellant was not accepted by the Assessing Officer and he proceeded to levy of penalty of .....

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claim for deduction was withdrawn. It was further submitted that while claiming the deduction under Section 43B of the Act, the addition made earlier under the same section in respect of interest waived by Haryana Financial Corporation Bank. The sundry creditors for expenses of ₹ 16,93,980/- was inadvertently included and the sundry creditors written off were clearly disclosed in the financial statement prepared in the schedule XI of the balance-sheet and even in schedule XV of the balanc .....

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atio laid down by the Hon ble Supreme Court in the case of Price Water House Coopers (P.) Ltd. Vs. CIT [2012] 348 ITR 306 (SC) and also on the decision of coordinate bench of ITAT, Pune in the case of Amruta Organics Pvt. Ltd. Vs. DCIT, dt. 22nd March, 2013 and the Hon ble Andhra Pradesh High Court in the case of CIT Vs. Saniz Mirza, (2013) 259 CTR 386 (AP). 4. Learned Sr. DR placed reliance on the orders of the authorities below. 5. We heard the rival submission and perused the material on reco .....

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losure was made of the items written off in the schedule XI financial statement, and the appellant on its own before the detection of the same by the Assessing Officer had offered the same to tax. This goes to prove that mistake is bona fide and therefore no penalty can be levied under the provisions of Section 271(1)(c) of the Act. In this regard, we also place reliance on the decision of Hon ble Supreme Court in the case of Price Water House Coopers (P.) Ltd., 348 ITR 306. The relevant paragra .....

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eturn and that it unequivocally stated that the provision for payment was not allowable under Section 40A(7) of the Act indicates that the assessee made a computation error in its return of income. Apart from the fact that the assessee did not notice the error, it was not even noticed even by the Assessing Officer who framed the assessment order. In that sense, even the Assessing Officer seems to have made a mistake in overlooking the contents of the Tax Audit Report. 19. The contents of the Tax .....

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