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Tera Construction Pvt. Ltd. Versus ITO, Ward 16 (2) , New Delhi

2015 (10) TMI 1481 - ITAT DELHI

Penalty under section 271(1)(c) - claim for deduction of various expenses, etc., in the computation of income under the head "Income from house property" - Held that:- Here is a case in which the assessee earned rental income to the tune of ₹ 84 lakhs on which it claimed deduction under section 24(i) for a sum of ₹ 18.75 lakhs. Despite that, it further claimed deduction for various expenses and allowance in respect of let out property from which rental income was earned. Such claim f .....

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is patently inadmissible, we cannot, but, uphold penalty under section 271(1)(c) of the Act.

Our view is fortified by a recent judgment from the hon'ble jurisdictional High Court in CIT v. NG Technologies Ltd. [2014 (12) TMI 481 - DELHI HIGH COURT), in which the assessee claimed deduction for loss on sale of fixed assets in its profit and loss account. The hon'ble Delhi High Court upheld the penalty in respect of such patently inadmissible claim. The facts of the instant case are on .....

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l (Accountant Member).- This appeal by the assessee is directed against the order passed by the Commissioner of Income-tax (Appeals) on February 7, 2008 upholding the penalty of ₹ 17,49,622 imposed by the Assessing Officer under section 271(1)(c) of the Income-tax Act, 1961 (hereinafter also called "the Act") in relation to the assessment year 2001-02. 2. Before proceeding with the matter, we want to set out the relevant facts under which this appeal has again come up before the .....

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n deleting the penalty on the basis of lack of proper satisfaction. Accordingly, the matter has been remanded for deciding penalty on merits. 3. We have heard the learned Departmental representative and perused the relevant material on record. There is no appearance from the side of the assessee despite notice. We are, therefore, proceeding to dispose of this appeal ex parte qua the assessee. 4. Briefly stated, the facts of the case are that the assessee is a builder and promoter. No business ac .....

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on because the same were covered under the composite deduction allowable under the head "Income from house property". He, therefore, computed the total income by assessing the rental income under the head "Income from house property" as was declared by the assessee without allowing any separate deduction for the expenses which were claimed by the assessee. Penalty amounting to ₹ 17,49,622 was imposed in respect of the disallowance of deductions claimed by the assessee a .....

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n quantum proceedings that the assessee's contention for assessing rental income under the head "Profits and gains of business or profession" has been rejected and, resultantly, claim for depreciation amounting to ₹ 1,83,951, building maintenance expenses of ₹ 22,15,072 and commission paid for letting out building at ₹ 5,39,000 has been rejected. The assessee's further claim for deduction of ₹ 10 lakhs for getting the property vacated has also been found .....

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