ANGAD & SONS REALCON PRIVATE LIMITED,FARIDABAD V. ACIT, RANGE-2, DELHI

ITA 6681/DEL/2025

AI Insights

The case involves two appeals by M/S Angad & Sons Realcon Private Limited against penalties imposed for the assessment years 2009-10 and 2013-14. The first appeal (ITA 6681) contested a penalty under section 271D for alleged cash loans taken in violation of section 269SS, which the AO claimed were not supported by bank accounts of the lenders. The second appeal (ITA 6682) challenged a penalty under section 271(1)(c) related to an unsubstantiated business loss claim. The ITAT found that the penalties were incorrectly imposed, as the financial transactions were properly documented and the business loss, although contested, did not warrant a penalty under the cited section.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 848552 (ITAT-NEW DELHI)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Delhi
• Assessment Year: 2009-2010
• Appeal Filed On: 24-10-2025
• Other Referred Cases: Reliance Petro Products Pvt. Ltd. vs. 322 ITR 158 (SC), MAK Data Private Limited vs. 358 ITR 593 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: NEERAJ JAIN; ANDSHRI P.K. MISHRA
• Section: 271(1)(c)

Judgement Text

"ITA Nos.6681 & 6682/Del/2025 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B”NEW DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER AND SHRISANJAY AWASTHI, ACCOUNTANT MEMBER आ.अ.सं/.I.T.A Nos.6681 & 6682/Del/2025 िनधा रणवष /Assessment Years:2009-10 & 2013-14 M/S ANGAD & SONS REALCON PRIVATE LIMITED, H.No.129, Ward No.10, Palwal, Faridabad – 122001. PAN No.AAHCA3630L बनाम Vs. ADDL. CIT, Range-2, New Delhi. अपीलाथ\u0014 Appellant \u0016\u0017यथ\u0014/Respondent Assessee by Shri Neeraj Jain, CA andShri P.K. Mishra, Adv. Revenue by Shri Rajesh Kumar Dhanesta, Sr. DR सुनवाईक\bतारीख/ Date of hearing: 18.03.2026 उ\u000eोषणाक\bतारीख/Pronouncement on 25.03.2026 आदेश /O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER: 1. This is a batch of two appeals pertaining to the same assessee for AY 2009-10 (ITA 6681) and AY 2013-14 (ITA 6682). While ITA 6681 pertains to a penalty levied u/s 271D of the Income Tax Act, 1961 (hereafter as “the Act”), the ITA 6682 pertains to a penalty levied u/s 271(1)(c) of the Act. 2. ITA No.6681/Del/2025: In this case the AO has levied the impugned penalty on the ground that the assessee has taken cash loans amounting to Rs.8.5 lakhs each from Printed from counselvise.com ITA Nos.6681 & 6682/Del/2025 2 two persons. The Ld. AO has recorded a finding that the two loan givers were allegedly not having any bank account during the relevant financial year.This led the Ld. AO to conclude that the loans were taken in contravention of section 269SS of the Act. It is pertinent to mention that while the Ld. AO has recorded the dates of receipt of cheques from the two persons as 20.08.2016, 25.08.2016 and 30.10.2016; it was brought to notice that actually the year was not 2016 but 2008. 2.1 The assessee could not succeed at first appellate stage also since the Ld. CIT(A) went by the finding of Ld. AO to the extent that the cheques amounting to Rs.17 lakhs had been credited to Citi Bank at Faridabad in the year 2016 relevant for AY 2017-18. Needless to say, the penalty was confirmed. 2.2 The assessee has approached the ITAT with grounds challenging the impugned penalty. 2.3 Before us the Ld. AR filed bank accounts relevant for FY 2009-10 and demonstrated that indeed three cheques totaling Rs.17 lakhs on 20.08.2008 (Rs.1lakh), 25.08.2008 (Rs.14 lakhs) and 03.10.2008 (Rs.2 lakhs) were received from the loan givers through cheque. It was pointed out that the Ld. AO had fallen in error in presuming that these transactions pertained to the year 2016 and not 2008. 2.4 The Ld. DR relied on the orders of the authorities below. Printed from counselvise.com ITA Nos.6681 & 6682/Del/2025 3 3. We have carefully considered the rival submissions and have gone through the record before us. It is clearly visible that the impugned transaction was undertaken through banking channels on the dates mentioned by the assessee. Accordingly, there is no reason why there should be a presumption that such transactions took place in violation of section 269SS of the Act. Accordingly, the penalty levied is hereby directed to be deleted. 4. ITA No.6682/Del/2025: In this case a penalty u/s 271(1)(c) of the Act has been levied on account of a business loss claimed amounting to Rs.16,72,228/-. The Ld. AO has given a finding that even though the assessee had not carried out any business activity during the year but had still claimed this figure of loss. Furthermore, the Ld. AO has mentioned that the assessee had agreed to this loss being disallowed apparently to buy peace of mind. Thereafter, the Ld. AO held that it was a case of furnishing inaccurate particulars of income and thus, a penalty of Rs.5,16,718/- was levied. 4.1 The aggrieved assessee carried this matter before the Ld. CIT(A) where also he could not succeed on the basis of finding that the figure of loss was admitted as an inadmissible claim by the assessee only after the Ld. AO had pointed out that it was not admissible. Furthermore, it has also been held that the assessee could not seek immunity from penalty Printed from counselvise.com ITA Nos.6681 & 6682/Del/2025 4 on the basis of the fact that the impugned loss had been voluntarily surrendered. 4.2 Aggrieved with this action of Ld. CIT(A) the assessee has approached the ITAT with grounds challenging the impugned penalty. 4.3 Before us the Ld. AR argued that in the financial statements filed with the returned income the business loss of Rs.16,72,228/- was claimed on the basis of audited financial statements showing income from bank interest at Rs.9,75,728/- and other income of Rs.2,15,300/-. Against such income expenses amounting to Rs.28,63,256/- had been claimed mainly under the head Financial Cost, preliminarily expenses, insurance expenses, audit fees, processing fee and other expenses. It was argued that the claim of loss was justified on the basis of financial statements filed with the return of income. It was submitted by the Ld. AR that since not much difference would have resulted if the losses claimed were allowed or not, hence, the assessee decided to not contest the claim of the AO and accept the Ld. AO’s version. It was the submission that this was not a case of providing inaccurate particulars and the matter was covered in favour of the assessee by the case of Reliance Petro Products Pvt. Ltd. reported in 322 ITR 158 (SC). The Ld. AR read out from the relevant portion of this judgment, whereby it is clearly directed that merely because the assessee had claimed some expenditure which was not accepted by the Revenue then that by itself would not attract the Printed from counselvise.com ITA Nos.6681 & 6682/Del/2025 5 penalty u/s 271(1)(c) of the Act (Paras 10 & 11 of this order were specifically referred to). 4.4 Per contra, the Ld. DR argued with the help of written submissions and read out from the same. The Ld. DR relied on the case of MAK Data Private Limited reported in 358 ITR 593 (SC). In light of this case law it was argued that merely because the assessee had chosen to surrender a particular amount before the AO then on that basis alone there could be no relief from penalty u/s 271(1)(c) of the Act. 5. We have carefully considered the arguments of Ld. AR/DR and have gone through the documents before us. It is seen that in this case the audited accounts have clearly depicted the statement of affairs whereby against some income there is excess of expenditure and the same has been claimed as a loss. The items of expense clearly relate to the business of the company since a company is required under law to get its accounts audited and there would also be some costs on account of financing etc. Accordingly, even if the assessee has not chosen to contest the Ld. AO’s version regarding the proposed inadmissibility of the loss, it is clear that there is no case whereby the penalty is exigible u/s 271(1)(c) of the Act for filing inaccurate particulars of income. In this regard, the case of Reliance Petro Products (supra) is absolutely relevant for the facts of this case and we deem it fit to follow the same. The penalty is hereby directed to be deleted. Printed from counselvise.com ITA Nos.6681 & 6682/Del/2025 6 6. In the result, both the appeals are allowed. Order pronounced in the open court on 25.03.2026 Sd/- Sd/- (CHALLA NAGENDRA PRASAD) (SANJAY AWASTHI) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 25.03.2026 *Kavita Arora, Sr. P.S. Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "