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2017 (2) TMI 550 - ITAT MUMBAI

2017 (2) TMI 550 - ITAT MUMBAI - TMI - Penalty u/s. 271(1)(c) - allowability of project development expenses - Held that:- Respectfully following the judgments of Nayan Builders and Developers and Liquid Investment and Trading Company (2014 (7) TMI 1150 - BOMBAY HIGH COURT ),we hold that after admission of substantial question of law by the Hon’ble Bombay High Court the issue has become debatable and that penalty u/s. 271(1)(c) cannot be imposed in such cases. Reversing the order of the FAA, we .....

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service.Return of income was filed on 27/10/2004, declaring Loss of ₹ 3.41 corrodes.A revised return was filed on 22/06/205,declaring Loss at ₹ 4.12 crores.The Assessing Officer(AO)completed the assessment u/s. 143 (3) on 22/12/2006 determining the income of the assessee at Rs.(-) 1.36 crores. While computing the assessment, the AO held that claim of the assessee with regard to project development expenses to the tune of ₹ 2.21 crores was not admissible. He disallowed and amou .....

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the assessee preferred an appeal before the FAA.Before him it made elaborate submissions. After considering the assessment order, penalty order and the submissions of the assessee, the FAA referred to the cases of Zoom Communication Private Ltd.(40 DTR 249) NathuLal Agarwal and Sons (150 ITR 292)and Durga Prasad More (82 ITR 540) and confirmed the levy of penalty. 3. During the course of hearing before us,the Authorised Representative (AR) stated that the Hon ble Bombay High Court had admitted a .....

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ber 415 of 2012) of the Hon ble Bombay High Court and Liquid Investment and Trading Company (ITA 240 of 2009,dtd.05/10/2010 of the Hon ble Delhi High Court.The Departmental Representative (DR) contended that Tribunal had upheld the order in the quantum proceedings, that the AO was justified in levying penalty. 4. We have heard the rival submissions and perused the material before us. We find that while deciding the quantum appeal the Tribunal had dismissed the Ground raised by the assessee with .....

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e case of Aditya Birla Nuvo Ltd. (supra)as follow: 2. Brief facts of the case are that the assessee in the had claimed depreciation on Power Plant Install Rajshree Cement Ltd. and on the boiler it had claimed depreciation for full year at normal rate of 100% amounting to ₹ 6,52,24,546/-. AO disallowed the claim of depreciation for full year on the ground that boiler was not use for more than 180 days, accordingly allowed only 50% of the claim. The order of AO was confirmed by CIT(A) and su .....

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ount of the tax sought to be evaded. Aggrieved by the order of AO assessee filed appeal before CIT(A), wherein it was contended that Hon ble High Court has admitted the substantial question of law in respect of order passed by Tribunal pertaining to the ground related with the depreciation of boiler and also made submission on the merit of the case. The ld. CIT(A) after considering the contention of assessee hold as under: I hold that the appellant had not made conscious efforts to conceal the p .....

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ssee filed C.O. We have heard ld. DR for Revenue and AR for assessee and perused the material available on record. Ld. DR for Revenue argued that assessee was conscious since filing of return of income that depreciation on the boiler is not allowable and concealed the material date when the same was put to use. Ld. DR further argued that the disallowance was confirmed by CIT(A) as well as Co-ordinate Bench of ITAT. Ld. DR further relied upon the order of ITAT, Delhi in ACIT vs. M/s Khanna & .....

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A No. 240/09), order of Co-ordinate Bench of ITAT in ACIT vs. Aditya Birla Centre (ITA No. 5931/Mum/2010(T Mum) and judgment of Hon ble jurisdictional High Court in CIT vs. Nayan Builders & Developer in ITA No. 415/2012. 5. We have considered the rival contentions of the parties and gone through the record of the case and the law cited by ld. representative of the parties. The law cited by ld. DR in ACIT vs. Khanna & Annandhanam is not applicable as the fact of this case is in difference .....

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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 admittin .....

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