TMI Blog2022 (11) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... of accounting of such expenses in the earlier years, etc. Therefore, we find the decision of the Ld.CIT(A) in sustaining the penalty is not justified. Accordingly, we direct the Assessing Officer to delete the penalty levied. - ITA 466/Mum/2021 - - - Dated:- 16-11-2022 - Shri Vikasw Awasthy (Judicial Member) And Shri Amarjit Singh (Accountant Member) For the Assessee : Shri Vijay Mehta For the Department : Shri J Saravanan, Sr.AR ORDER PER : Shri Amarjit Singh (Accountant Member): This is an appeal filed by the assessee against the order passed by the Learned Commissioner of Income-tax (Appeals)-8, Mumbai (hereinafter Ld.CIT(A)) dated 13/03/2020 against the penalty order passed by the Assessing Officer under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 271(1) (c) by the learned Assessing Officer and! confirmed by the learned CIT(A) may be deleted. I 4. On the facts circumstances of the case, appellant has disclosed complete details of administrative and general expense in the financial statement and provided party-wise details of each expense before the Learned Assessing Officer. The appellant prays that they have not furnished any inaccurate particulars of income and it was not guilty of any contumacious conduct or any gross or wilful neglect, hence penalty levied u/s 271(1) by the learned Assessing officer and confirmed by the learned CIT(A) (c) may be deleted. 5. The penalty u/s 271(l)(c) is levied only on the ground that the addition was made while passing the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses. On verification of material obtained during the course of assessment, the Assessing Officer noticed that assessee was engaged in the business of real estate development and it had undertaken a project under MHADA e-development scheme and was developing two societies, viz. Society No.69 during the year under consideration. The Assessing Officer observed that the aforesaid project of developing the society was still under consideration and assessee has not yet started recognizing the cost or revenue in the books of account. However, the assessee had transferred all the expenses to the capital work in progress except aforesaid administrative and general expenses which has been claimed as revenue expenses. On query, the assessee expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cepted by the Assessing Officer under section 143(1) of the Act. After referring to the aforesaid facts and circumstances, the Ld.Counsel contended that assessee has not furnished any inaccurate particulars of income. 4. On the other hand, the Ld.Departmental Representative has supported the order of lower authorities. 5. Heard both the sides and perused the material on record. During the course of assessment, the Assessing Officer observed that project undertaken by the assessee was still under construction. Therefore, assessee should have also shown the administrative and general expenses as a part of capital work in progress like other expenses. During the course of penalty proceedings, the assessee submitted that it had accounted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd development costs - These would include costs that relate directly to the specific project and costs that may be attributable to project activity in general and can be allocated to the project. 2.3 Construction costs and development costs that relate directly to a specific project include: (a) land conversion costs, betterment charges, municipal sanction fee and other charges for obtaining building permissions; (b) site labour costs, including site supervision; (c) costs of materials used in construction or development of property; (d) depreciation of plant and equipment used for the project; (e) costs of moving plant, equipment and materials to and from the project site; (f) costs of hiring plant and equipment; ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee and, further, imposed penalty under section 271(1)(c) upon it - It was noted that expenditures disallowed during relevant assessment years were otherwise eligible and same were allowed in next assessment years - Further, full details with regard to these expenses was disclosed by assessee in return of income and figures given in columns and heads were not disturbed by Assessing Officer and no addition was made by doubting and disturbing figures and amounts mentioned - Whether, on facts, impugned imposition of penalty under section 271(1)(c) was to be set aside - Held, yes We have also gone through the decision of ITAT, Mumbai Bench B in the case of Macrotech Construction (P) Ltd vs Assistant Commissioner of Income-tax, Circle 6( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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