DCIT, CIRCLE-7(1), NEW DELHI V. DELHI TOURISM & TRANSPORTATION DEVELOPMENT CORPORATION LTD, NEW DELHI

ITA 4984/DEL/2024

AI Insights

The case involves an appeal by the Revenue against the order of the National Faceless Appeal Centre (NFAC), which had deleted a penalty of Rs. 2,72,65,417 levied by the Assessing Officer (AO) under section 271(1)(c) of the Income Tax Act. The penalty was initially imposed on the Delhi Tourism & Transportation Development Corporation Ltd. for what was considered a capital revenue issue. However, the ITAT had previously deleted the quantum addition related to this penalty, determining that the advance rent received by the assessee from government agencies was not accrued income for the assessment year in question, but for the subsequent year. This decision was based on the mercantile system of accounting followed by the assessee, which was not disputed.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312714 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Other Referred Cases: ITA Nos. 5167/Del/2019 & Ors.
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: PANCHAM SETHI; SAURABH
• Section: 271(1)(c)

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘B’, NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER, AND SHRI SUDHIR PAREEK, JUDICIAL MEMBER ITA NO. 4984/DEL/2024 A.YR. : 2015-16 DCIT, CIRCLE 7(1), NEW DELHI ROOM NO. 406, 4TH FLOOR, C.R. BUILDING, I.P. ESTATE, NEW DELHI – 2 (PAN: AAACD0169J) Vs. DELHI TOURISM & TRANSPORTATION DEVELOPMENT CORPORATION LTD., 18A, SCO COMPLEX, DEFENCE COLONY, NEW DELHI – 24 (Appellant) (Respondent) ORDER PER SHAMIM YAHYA: AM This appeal filed by the Revenue is directed against the order dated 06.09.2024 passed by the NFAC, Delhi in relation to assessment year 2015-16 on the following grounds:- i) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the appeal of the assessee by deleting the penalty levied by the AO u/s. 271(1)(c) of the Act amounting to Rs. 2,72,65,417/- on account of capital revenue. Assessee by Shri Pancham Sethi, CA & Shri Saurabh Gupta, CA Department by Shri Rajesh Kumar Dhanesta, Sr. DR 2 ii) The appellant craves leave to add, alter or amend any / all of the grounds of appeal before or during the course of the hearing of the appeal. 2. At the time of hearing, Ld. Counsel for the assessee stated that quantum addition has been deleted by the ITAT, Delhi vide its common order dated 14.08.2023 passed in ITA Nos. 5167/Del/2019 (AY 2015-16) & Ors. Thus, he submitted that there remains no quantum addition, accordingly, the penalty levied does not survive and needs to be deleted. Per contra, Ld. DR did not raise any objection. 3. Upon hearing both the representatives and perusing the records, we find that quantum addition has been deleted relating to penalty appeal, by the ITAT vide its order dated 14.08.2023 in assessee’s own case, by holding as under:- “61. We have heard both the parties and perused the material available on record. The assessee in the present case following mercantile system of accounting and there is no dispute on the said fact. Being so, the income accrued and received relating to the year under consideration has to be taxed. In the present case, the assessee received advance rent from the Government Agencies which is not accrued to the assessee and the same has to be taxed in the assessment year for which the same is related. Therefore, it cannot be taxed in the hands of the assessee in the year under consideration. The said advance rent is subject to taxation in the subsequent assessment year, being so, the same cannot be taxed in the year under consideration. Accordingly, we allow the Ground No. 1 in ITA No. 5167/Del/2019 (for assessment year 2015-16) and delete the addition.” 4. In view of above, we are of the considered opinion that once the quantum addition has been deleted, the penalty levied thereon is not sustainable in the eyes of law and thus deserves to be deleted. We hold and direct accordingly. In 3 the result, the Revenue’s ITA No. 4984/Del/2024 (AY 2015-16) stands dismissed. Order pronounced on 29/04/2025 upon conclusion of hearing. Sd/- (SUDHIR PAREEK) Sd/- (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER “SRBHATNAGAR” Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi "