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2016 (11) TMI 1052 - ITAT MUMBAI

2016 (11) TMI 1052 - ITAT MUMBAI - TMI - Penalty u/s 271(1)(c) - income from other sources - as per assessee reimbursements do not constitute the income of the assessee - Held that:- It is an undisputed fact that the assessee received the said amount of ₹ 14 lakhs from M/s. Deesha and the same was spent towards painting of the entire building spending a sum of ₹ 10,58,629/-. Some of the amount was spent for erecting the scaffolding for bearing the display boards. It is the claim of t .....

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eceived towards bimonthly rent when the BMC fees itself is exceeded the sum of ₹ 3.75 lakhs (rounded off). Further unable to appreciate the fact of M/s. Deesha reimbursed the expenditure on the painting of the entire building amounting to more than ₹ 10.5 lakhs when the scaffolding for display of the advertisement is only in the area of 80 X 120 sq ft. I am absolutely convinced on the fact that the affairs are not well so far as the accounting of the amount of ₹ 14 lakhs is con .....

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ORDER PER D. KARUNAKARA RAO, AM: This appeal filed by the assessee on 27.1.2015 is against the order of the CIT (A)-27, Mumbai dated 25.9.2014 for the assessment year 2006-07. In this appeal, assessee raised the following grounds which read as under:- 1. On the facts and circumstances of the case and in law, the Ld CIT (A) erred in partly confirming the penalty under the provisions of section 271(1)(c) of the Act. 2. On the facts and in the circumstances of the case and in law, Ld CIT (A) failed .....

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he assessee is a Co-operative Housing Society (CHS) and filed the return of income declaring the total income of ₹ 68,784/-. AO completed the assessment u/s 143(3) of the Act after making addition of ₹ 15 lakhs and the assessed income was determined at ₹ 19,61,280/-. In the assessment, AO noticed that the assessee received ₹ 15 lakhs from one M/s. Deesha Leasecon Pvt Ltd (Deesha). The assessee allowed Deesha to erect a scaffolding for a display against the receipt of S .....

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ts under the maintenance account and the same was not offered to tax. The CIT (A) confirmed the addition and the matter went to the Tribunal vide ITA No.3758/M/2011, dated 15.3.2013, wherein the Tribunal confirmed the addition. Subsequently, AO levied the penalty and the said amount of ₹ 15 lakhs and ₹ 5,01,230/- was the demand raised. In the penalty proceedings, assessee submitted that M/s. Deesha was given right to display the banner of 80 X 120 size on the scaffolding erected for .....

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laimed to have spent ₹ 2,64,000/- for erection of scaffolding; ₹ 10,58,629/- towards painting two layers of painting on the society building and ₹ 77,370/- being cost of material and other accessories. AO also perused the two agreements ie one for the sum of ₹ 1 lakh and the other for the sum of ₹ 14 lakhs and noticed that the said agreements constitute self serving document to suite the assessee s attempt to not to disclose ₹ 14 lakhs for taxation. On perusal .....

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erefore, AO levied the penalty of ₹ 5,01,230/- was levied relatable to the addition of ₹ 15 lakhs. 3. During the first appellate proceedings, assessee reiterated the above reasons and also filed written submissions which are extracted in para 2.3.1 of the CIT (A) s order. Referring to the finding of the Tribunal on the quantum additions, CIT (A) extracted the relevant paras of the Tribunal s order in para 2.4.3 of his order. Referring to paras 6 to 8 of the order of the Tribunal, CIT .....

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only for 2 months. He also underlined that the finding of the Tribunal on the commission, where the Tribunal held as under:- The affairs are so arranged that the cost to be incurred by the society for their regular maintenance was borne by the said company and receipts were bifurcated into two agreements. 4. Tribunal also noted that the maintenance of the scaffolding and the relate structures are part and parcel of the regular maintenance and therefore, incurring of the expenditure on painting, .....

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h the same, assessee is in appeal before the Tribunal. 5. During the proceedings before the Tribunal, none appeared to represent the assessee s case. With the help of the Ld DR, I proceed to adjudicate this appeal on merits. It is the case of the assessee that the issue relating to the levy of penalty on the sum of ₹ 14 lakhs which was disclosed in the return of income under maintenance account but the same was not offered to tax on the ground of reimbursements. Without prejudice, assessee .....

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ed in the maintenance account, it is the submission of the assessee that there is no penalty with regard to the disclosure of the particulars and on this ground alone, penalty should not be sustained. As per the record available before the Tribunal, assessee could not justify why the entire building has to be painted at the cost of M/s. Deesha s expenditure without offering the said receipts to tax. No evidence is brought forth on record / before me as the specific expenditure incurred for the a .....

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d, I find, it is an undisputed fact that the assessee received the said amount of ₹ 14 lakhs from M/s. Deesha and the same was spent towards painting of the entire building spending a sum of ₹ 10,58,629/-. Some of the amount was spent for erecting the scaffolding for bearing the display boards. It is the claim of the assessee that these amounts constitute reimbursements by M/s. Deesha and reimbursements are outside the scope of chargeability to tax. These arguments were dismissed by .....

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377; 1 lakh was received towards bimonthly rent when the BMC fees itself is exceeded the sum of ₹ 3.75 lakhs (rounded off). Further, I am unable to appreciate the fact of M/s. Deesha reimbursed the expenditure on the painting of the entire building amounting to more than ₹ 10.5 lakhs when the scaffolding for display of the advertisement is only in the area of 80 X 120 sq ft. I am absolutely convinced on the fact that the affairs are not well so far as the accounting of the amount of .....

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