TMI Blog2020 (9) TMI 462X X X X Extracts X X X X X X X X Extracts X X X X ..... allowance of provisions for gratuity u/s 43B - Commissioner - A deleted the penalty on the above sum holding that the assessee has furnished the details in the income tax return, in the books of account, in the work in progress - HELD THAT:- The penalty on this sum was deleted. DR could not show us any reason that penalty on the above sum is leviable. Further, it is also not free from doubt whether such disallowance can be made u/s 43B of the income tax act or not when the assessee itself is not claim the above deduction in the computation of total income. Merely because the disallowance has been confirmed by the higher forum, it cannot automatically result into penalty. Further for the reasons given by us, relying upon the decision of the jurisdictional High Court in case of principal Commissioner of income tax versus Sahara India life insurance Co Ltd [ 2019 (8) TMI 409 - DELHI HIGH COURT ] we do not find any infirmity in the order of the learned some is CIT A in deleting the penalty on the above disallowance. No infirmity in the order of the learned CIT A in cancelling the penalty levied u/s 271 (1) (C) of the act. - Decided in favour of assessee. - ITA No. 4205/Del/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of income tax A are also revenue neutral or having a time gap only. It was also submitted that mere this allowance of expenditure cannot result into penalty automatically. Assessee also claimed that it is bona fide claim are rejected. It has neither concealed any income nor furnished inaccurate particulars of its income. Therefore, it was submitted that there is a merely difference of opinion and not the concealment of income and therefore the penalty u/s 271 (1) (C) cannot be imposed. Assessee also submitted that it has submitted complete details before the lower authorities and there is no concealment of income at any stage. Assessee further relied upon the several judicial precedents submitting the penalty should not be levied. 05. However, the learned assessing officer considered the explanation of the assessee. He held that in the present case the various additions/disallowances are sustained by the learned CIT A were detected by the Department after conducting an elaborate enquiry in as much as special audit was conducted u/s 142 (2A) of the act. Additions so made are virtually the outcome of detailed investigation. On the plea of the assessee that it had discl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... off any of the twin charges, with respect to the concealment of income or furnishing of inaccurate particulars of such income in terms of explanation 1,2,3,4 and 5 of the above Section. He therefore submitted that even otherwise the penalty levied by the learned assessing officer does not survive. He relied up on decision of Honourable Jurisdictional High court in Case of PCT V Sahara India Life Insurance Company limited dated 2-8-2019. He submitted that this issue has been decided against the assessee as per ground number 1 of the appeal before the learned Commissioner A where the jurisdictional facts were contested. 11. We have carefully considered the rival contention and perused the orders of the lower authorities. In the present case the learned assessing officer has levied the penalty with respect to the following additions/disallowance confirmed by the learned CIT A. Assessee and the AO both carried matter before the coordinate bench. Further, assessee preferred appeal before the coordinate bench and coordinate bench has also deleted the certain addition, set aside certain additions to the file of the learned assessing officer for further verification as per order da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 Addition on account of enhancement of the revenue from constructed properties 42,86,06,986 Coordinate bench has set aside the issue and directed the AO to decide again after verification of facts as per paragraph number 58 62 and page number 72 73 of the order. Subsequently the AO as per appeal effect order dated 30 December 2017 has deleted the above addition. 7 Withdrawal of claim of deduction u/s 24 of 30% deduction 35,09,870 This issue is not pressed by the assessee and assessee s appeal is dismissed by coordinate bench holding that income is not assessable Under the head house property as per paragraph number 63 64 at page number 73 of the order 8 Disallowance of provision of gratuity u/s 40 A (7) 14,49,123 This issue is not pressed by the assessee before the coordinate bench and appeal of the assessee is dismissed by coordinate bench at paragraph number 65 66 at page number 73 of the order 9 Capitalizatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income or for furnishing of inaccurate particulars of income, the penalty order cannot be sustained. 15. Therefore, now only following additions/disallowances remain on which penalty levied survived, which has been deleted by the learned CIT A. a. Disallowance of brokerage paid for Amex building of ₹ 6,439,262/ b. Withdrawal of deduction u/s 24 of 30% of standard deduction of ₹ 3,509,870/ c. disallowance of provisions for gratuity u/s 40 A (7) of ₹ 14,49,123/-. 16. Now we first come to issue with respect to the allowance of brokerage paid for AMEX building of ₹ 6,439,262/ . Assessee has submitted that it has two AMEX buildings one is Amex tower- I and another is AMEX tower II. Tower 1 was completed in earlier years however, tower 2 was still under construction during the year under assessment. It is completed in subsequent years. Assessee has submitted that during the year under consideration an agreement was executive with M/s C B Elliss Richards South Asia private limited on 28th of April 2005. In terms of the above agreement services were rendered by that company and 50% of the total amount payable to that party as per the bill w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts have been brought to the notice of the assessing officer as well as special auditors by the assessee. The assessee filed return of income a company in the balance sheet and produced all the account books and the supporting vouchers along with relevant documents before the assessing officer the revenue could not discover any facts to hold that the appellant had suppressed anything, which they found out in the course of the assessment proceedings. The assessee has claimed deduction under the bona fide belief to its allowability and merely because in expenditure is been disallowed it does not result into the penalty for concealment of income automatically. 17. The learned departmental representative could not controvert the above finding of the learned Commissioner of income tax appeals. Further, the first ground of appeal before the learned Commissioner of income tax appeal which was dismissed considering the same is general in nature. Before us the assessee has produced the notice dated sixth may 2009 issued u/s 274 read with Section 271 of the income tax act wherein none of the twin charges was cancelled by the assessing officer. In view of this, penalty has rightly been del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the statutory claim when the assessee has been taxed under the head income from house property will result into penalty u/s 271 (1) (C) of the act. However, for the reason that the penalty notice does not show any of the twin charges, on which the penalty has been levied by the learned assessing officer, as none of them has been struck off, on this ground, we do not find any infirmity in the order of the learned Commissioner of is in deleting the penalty on above disallowance. 19. With respect to the disallowance of provisions for gratuity of ₹ 1,449,123/ , the facts noted that the learned assessing officer has made the disallowance of ₹ 4,981,625/ on account of disallowance on the basis of the report of special auditors whereas the learned Commissioner of income tax A confirmed the disallowance to the extent of ₹ 14,49,123/ . The assessee submitted that the provision for gratuity debited in head office books in the profit and loss account has already been added back to the income of the assessee by applying the provisions of Section 43B. However, ₹ 29,81,625 is a provision for gratuity liability in the books of account in the construction division ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
