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TMI Blog2019 (9) TMI 1236X X X X Extracts X X X X X X X X Extracts X X X X ..... he CIT(A) failed to appreciate that assessee company had made false claim of deduction under section10(20A) being fully aware that it was not an "Authority" constituted under any law and merely a company registered under 'The Companies Act." (ii) The CIT(A) failed to appreciate that inaccurate particulars had been shown by the assessee company by claiming expenses which were disallowed by Assessing Officer, addition made has been sustained by the CIT(A) and had the same not been detected in assessment this income would have escaped assessment. (iii) The CIT(A) failed to appreciate that inaccurate particulars have been shown by the assessee company to the extent of disallowance of interest expenses at Rs. 18,27,449 by the Assessing Officer and addition has been sustained in the quantum appeal by the CIT(A) because had the case not been selected for scrutiny, this amount would have escaped assessment." The appellant craves to be allowed to amend, delete or add any other ground of appeals during the course of hearing of this appeal." ITA No. 4433/Del/2005 (A.Y. 2001-02) "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modify any grounds of appeal either before or at the time of hearing of the appeal." 3. The facts of A.Y. 2000-01 and 2001-02 are identical therefore, we are taking up the facts of A.Y. 2000-01. The assessee company is a joint venture undertaking of the Government of India and Government of Delhi, engaged, inter alia, in the business of planning, designing, development, construction, maintenance, operation and financing of mass rapid transport and other urban transport and people mover system of all types in the National Capital Region of Delhi. In the I. T. Return, for this Assessment Year 2000-01 interest income on bank deposits at Rs. 59,57,94,430/- was declared. Subsequently, a revised return was filed showing nil income. In the revised return after claiming deduction of expenses for earning of interest income, the income was worked out at Rs. 45,10,06,672/-, which was claimed exempt u/s 10(20A). While completing the assessment, the Assessing Officer did not allowed any deduction of expenses for earning of interest income. Claim for exemption u/s 10(20A) was also rejected and the assessment was completed at an income of Rs. 59,57,94,426/-. In first appeal, the CIT(A) allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilable on record. It has been held in a number of cases that 'in the absence of non-recording of satisfaction note by the Assessing Officer during the course of assessment proceedings regarding concealment or furnishing of inaccurate particulars of income, penalty u/s 271(1)(c) is not impossible. It can be seen from the records that since Assessment Year 1996-97 (first year for which Income-Tax return was filed by the assessee company) exemption u/s 10(20A) was being claimed which was denied at the level of Assessing Officer and CIT(A). Against this decision, the assessee company has filed second appeals before the ITAT, right from Assessment Year 1996-97 onwards which are pending for adjudication before the ITAT. Since it is a matter of legal opinion whether exemption u/s 10(20A) is allowable or not, it cannot be said that the assessee company concealed its income or furnishing inaccurate particulars of its income. Hence Penalty u/s 271(1)(c) was not leviable. The Ld. AR also pointed out that there is no satisfaction note regarding concealment or furnishing of inaccurate particulars of income was recorded by the Assessing Officer during the course of assessment proceedings. The qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Y. 2003-04 and ordered for fresh adjudication and decision as per the law. The assessee could not appeal against the order passed u/s 263 by the CIT, Delhi - IV because of oversight by the consultant to whom the order u/s 263 of the Act was given for filing in appeal. Therefore, the assessee filed application for condonation of delay of 301 days. The Ld. DR opposed the condonation of delay. 9. We are of the opinion that the assessee and its consultant through the affidavit explained the delay and it appears to be genuine reason for the delay in filing the appeal before the Tribunal. Hence we are condoning the delay. Now we are taking up the contentions of both the parties in respect of merits of the case. 10. The Ld. AR submitted that the assessee came to be constituted on 03.05.1995 as a Joint Venture Company having two shareholders namely 'Government of India' and 'Government of Delhi' each having 50% of shareholding. It had been incorporated with the objective of planning, development, construction, maintenance, operation and financing of mass transit and urban transport system in the National Capital Territory for the purpose of development and improvement of the city of Del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be set off from the purported income from other sources. The Ld. AR relied upon CIT vs. Rajendra Prasad Moody 115 ITR 519 (SC). 11. The Ld. DR submitted that the assessee has earned huge amount of interest income in years under consideration. The surplus funds have been deposit as fixed deposit/flexi deposit. The business of the assessee is planning, development, construction, maintenance, operation and financing of mass transit and urban transport system in national capital territory. The receipts & expenses of the assessee are as follows: A.Y. Total Receipts Receipts from Interest Earned Expenses 1997-98 38,16,684 38,02,921 74,19,134 1998-99 15,44,65,452 15,26,70,209 5,95,61,700 1999-00 36,58,38,682 36,58,38,183 9,18,25,170 2000-01 59,67,94,426 59,67,94,426 14,67,87,754 2001-02 88,11,43,805 88,11,43,805 21,47,87,281 The Ld. DR submitted that from the perusal of above receipts & expenses, it is evident that there were hardly any business receipts apart from interest earned. Thus, the business had neither been set up nor commenced. The assessee commenced operations on 24.12.2002. In earlier years, it was in the process of setting up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry provisions of section 56 in respect of income to the extent of Rs. 603.81 Lakhs in the A.Y. 2003-04. In view of these facts the assessment order dated 27/3/2006 u/s 143(3) for the A.Y. 2003-04 is held to be erroneous and prejudicial to the interest of revenue." In assessee's own case for A.Y. 1996-97 to 2002-03 (ITA Nos. 1346/DEL/2018, 2398/DEL/2001, 1144/DEL/2002, 3356/DEL/2002, 1874/DEL/2004, 4553/DEL/2003, 5095/DEL/2004, 2081/DEL/2003, 2082/DEL/2003) order dated 28.06.2019 held as under: "25. We have considered rival submission of the parties on the issue in dispute and perused the material on record. 25.1 We are of the considered view that under the provisions of section 57(iii) of the Act, any expenditure (not being in the nature of capital expenditure) laid out or expended wholly and exclusively for the purpose of making or earning such income is deductible against the said income assessed under section 56 of the Act i.e under the head "Income from other sources". The Assessing Officer estimated the expenditure incurred on the basis of number of employees. The Ld. CIT(A) however has followed the estimation made by the Ld. CIT while passing order under section 263 for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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