TMI Blog2018 (1) TMI 792X X X X Extracts X X X X X X X X Extracts X X X X ..... e as regards not accounting for the amount of ₹ 4 lac stands proved, therefore, saddling the assessee with penalty under Sec. 271(1)(c) as regards the said amount would not be justified. We thus for the aforesaid reasons vacate the penalty imposed by the A.O under Sc. 271(1)(c) in the hands of the assessee as regards the suppressed contract receipts of ₹ 4 lac. The Ground of appeal is allowed in favour of assessee. - ITA No. 631/Mum/2016 - - - Dated:- 8-1-2018 - SHRI P.K BANSAL, VICE PRESIDENT AND SHRI RAVISH SOOD, JM For The Appellant : Ms. Chandni Patel And Sh. D. Sriram., A.Rs. For The Respondent : Shri Purshotam Kumar, D.R. ORDER PER RAVISH SOOD, JUDICIAL MEMBER: The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals)-41, Mumbai, dated 19.11.2015, which in itself arises from the order passed by the A.O under Sec. 271(1)(c) of the Income-tax act, 1961 (for short Act ), dated 02.03.2012. The assessee assailing the order of the CIT(A) had raised before us the following grounds of appeal:- 1. The order of the Commissioner of Income-tax (Appeals) [CIT(A)] in affirmi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in its balance sheet, therefore, the claim of the assessee that the said respective properties were being exploited for its business purposes could not be accepted. The A.O in the backdrop of his aforesaid observations worked out the Annual Lettable Value (for short ALV ) of the property under Sec. 22 r.w.s 23 of the Act at ₹ 6,34,831/- and after allowing statutory deduction of 30% under Sec. 24 made an addition of ₹ 4,44,382/- under the head Income from house property in the hands of the assessee. 5. The A.O further observed that though a perusal of the AIR information revealed that the assessee had received an amount of ₹ 6,50,000/- from M/s Siddhivinayak Construction company, as under: Date Amount 04.10.2005 ₹ 6,50,000/- 31.10.2005 ₹ 4,00,000/- Total ₹ 6,50,000/- but however, the assessee had accounted for receipt of only ₹ 2,50,000/- in the contract receipts for the year under consideration in context of the said client. The assessee reconciling the varian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the matter in appeal before us. The ld. authorised representative (for short A.R ) for the assessee took us through the facts of the case. The ld. A.R submitted that the order of the CIT(A) dismissing the quantum appeal of the assessee was not further carried in appeal before the Tribunal. The ld. A.R adverting to the addition of ₹ 4 lac made by the A.O towards suppressed contract receipts, took us through the copy of the ledger account of its client, viz. M/s Siddhivinayak Construction as appearing in the books of account of the assessee for the year under consideration (Page 77) of the assesses paper book (for short APB ). The ld. A.R submitted that the assessee who had undertaken certain construction work for M/s Sidhivinayak Construction had though raised an invoice of ₹ 6,50,000/- for the same, but however, before recording of the same in the books of account the said client disputed the payment of the amount. It was submitted by the assessee that it was thereafter agreed that M/s Sidhivinayak Construction would in discharge of its liability pay only an amount of ₹ 2,50,000/-. The ld. A.R submitted that as M/s Sidhivinayak Construction had agreed for a pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re in dispute, therein took us through Page 35 of the APB , which is a letter dated 01.09.2006 addressed by the society, viz. God s Gift Cooperative Housing Society to the assessee, wherein the society had refused to enrol the assessee as a member of the society with respect to the Shop nos. 3 to 7. Alternatively, it was submitted by the ld. A.R that even otherwise as the addition in respect of the ALV of the property was made by the A.O on an adhoc basis, the same was thus not maintainable. That in the backdrop of the aforesaid facts it was vehemently submitted by the ld. A.R that no penalty under Sec. 271(1)(c) of the Act was called for in the hands of the assessee. Per contra, the ld. Departmental representative (for short D.R ) relied on the orders of the lower authorities. 12. We have heard the ld. authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record. We find that our indulgence in the present appeal is sought for adjudicating the validity of the penalty imposed by the A.O under Sec. 271(1)(c) in respect of additions made in the hands of the assessee on two grounds, viz. (i). addition under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecorded hereinabove are only in context of the validity of the penalty imposed under Sec. 271(1)(c) in the hands of the assessee and would in no way prejudice the quantum addition made in the hands of the assessee, which as conceded by the ld A.R had attained finality. 14. We shall now advert to the penalty under Sec. 271(1)(c) imposed in respect of the ALV of the Flat Nos. 502 and 203 at Kent Estate, which had been assessed in the hands of the assessee. We find that the ld. A.R had claimed that the aforesaid respective flats were being used for the business purposes by the assessee, viz. Flat No. 203 was being used as additional office premises, while for Flat no. 502 was being used as storage space for books, stationery etc. We are of the considered view that as the assessee had failed to substantiate its aforesaid contention of using the flats for its business purposes, therefore, the ALV of the same had been brought to tax under the head house property. We are of the considered view that though the aforesaid claim of the assessee had remained unproved, but not disproved, therefore, the same though may justify an addition in its hands in the course of the assessment proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted for the contract receipt from the said client only to the said extent and raised the claim for the credit of the TDS corresponding to the said amount only. We find that though M/s Sidhivinayak Construction had during the year under consideration accounted an amount of ₹ 6,50,000/- as payable to the assessee, but however, had thereafter written back an amount of ₹ 4 lac in the Financial year 2007-08. We find that the aforesaid claim of the assessee stands duly fortified on a perusal of the ledger account of the assessee as appearing in the books of account of M/s Siddhivinayak Construction for the F.Y. 2007-08 (Page 79 of APB ). We are of the considered view that now when the assessee in the backdrop of the aforesaid facts was in actual receipt of an amount of ₹ 2,50,000/- from its aforesaid client, viz. M/s Siddhivinayak Construction Co., and had also claimed the credit as regards the TDS corresponding to the said amount only, therefore, the bonafides of the assessee as regards not accounting for the contract receipts of ₹ 4 lac stands duly established. We thus are of the considered view that as the bonafides of the explanation of the assessee as re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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