Deputy Commissioner of Income-tax, Central Circle - 1, Nashik V. M/s. Rajendra M. Developers & Builders Pvt.Ltd, Mumbai

ITA 297/PUN/2022

AI Insights

The case involves an appeal by the Revenue against the order of the ld.Commissioner of Income Tax (Appeals), Pune-12, which had deleted a penalty imposed on M/s. Rajendra M. Developers and Builders Pvt. Ltd. The penalty was originally levied following an addition made by the AO, which was based on entries in seized records indicating undisclosed income from 'on-money' transactions. However, the ITAT Pune Bench later deleted this addition, leading to the deletion of the penalty by the CIT(A). The Revenue's appeal contested the deletion of the penalty, but the ITAT upheld the CIT(A)'s decision, noting that the penalty was contingent on the now-deleted addition.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134309 (ITAT-PUNE)
• Duration Of Justice: 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 19-12-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 03-05-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Corroborative evidences; Set aside
• Section: 271(1)(c)

Judgement Text

आयकर अपीलीय अिधकरण “बी” Ɋायपीठ पुणेमŐ। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B” :: PUNE BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.297/PUN/2022 िनधाᭅरण वषᭅ / Assessment Year :2014-15 The Deputy Commissioner of Income Tax, Central Circle-1, Nashik. Vs M/s.Rajendra M. Developers and Builders Pvt. Ltd., 37-39, Kantol Niwas, Modi Street Fort, Mumbai – 400001. PAN: AAACR 2040 N Appellant/ Revenue Respondent / Assessee Assessee by None. Revenue by Shri M.G.Jasnani – DR Date of hearing 20/12/2022 Date of pronouncement 30/01/2023 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This appeal filed by the Revenue is directed against the order of ld.Commissioner of Income Tax(Appeals), Pune-12 dated 10.02.2022 emanating from the penalty order dated 26.03.2019 under section 271(1)(c) of the I.T.Act, 1961 for the A.Y.2014-15. The Revenue has raised the following grounds of appeal: “1. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in deleting the penalty of Rs. 1,72,47,242/- levied u/s.271(l)(c) of the Act for A.Y.2014-15, without appreciating the fact that the addition made by the AO was based on specific corroborative evidences in the form of entries in the seized records, with logical and justifiable reasons to arrive at the addition made during the assessment. ITA No.29/PUN/2022 M/s. Rajendra M. Developers and Builders Pvt. Ltd. [A] 2 2. The Ld.CIT(A) has erred in deleting the penalty, without appreciating the fact that M/s. Surya Properties Pvt. Ltd. has not only accepted that the on-money amounting to Rs.5,31,58,400/- was paid to the assessee - Rajendra M. Developers & Builders Pvt. Ltd., but has also offered the income of Rs.5,31,58,400/- paying tax thereon, which conclusively proves that the assessee has received on-money of Rs.5,31,58,400/- for the sale of the said land. 3. The appellant craves leave to add, alter, modify, delete and amend any of the grounds, as per the circumstances of the case. 4. The appellant prays to adduce such further evidence to substantiate its case, as the occasion may demand and evidence gathered during the course of search on assessee.” 2. No one appeared on behalf of the assessee. 3. The ld.Departmental Representative(ld.DR) for the Revenue relied on the orders of the Assessing Officer. 4. In this case, the ld.CIT(A) has deleted the penalty on the ground that the addition on which penalty has been levied, had been deleted by ITAT Pune Bench. The relevant part of the dl.CIT(A)’s order is reproduced here as under: “4. I have considered the submission of the appellant and facts of the case. It is seen that the AO made addition of Rs. 5,31,58,400/- as appellant’s undisclosed income received in the form of “On Money” for sale of land of Makhmalabad from M/s. SPPL of Nashik vide order dated 30.12.2016. Against this order, the appellant filed appeal before the CIT(A)-12, Pune, who sustained this addition. Accordingly, the AO levied penalty of Rs.1,72,47,242/- u/s 271(1)(c) of the Act on the addition sustained by the CIT(A) vide the impugned ITA No.29/PUN/2022 M/s. Rajendra M. Developers and Builders Pvt. Ltd. [A] 3 order, against which this appeal is filed. However, against the order of the CIT(A)-12, the appellant filed further appeal before the Hon’ble ITAT, who has allowed the appeal of the appellant vide order dated 05.08.2021 in IT(SS)A NO.05/PUN/2018. The relevant part of the order of the Hon’ble ITAT is reproduced as under: "12. Thus, we are of the considered opinion that the Id. CIT(A) had merely confirmed the assessment order without looking into the substance of the terms and conditions entered between the appellant and SPP, confirmed addition merely based on the uncorroborated notings on assumptions and conjunctures. The lower authorities had failed to note that the notings does not clearly indicate that the amount was paid only to the appellant herein. Therefore, the orders of both the Assessing Officer and Id. CIT(A) were set aside and directed the Assessing Officer to deleted the addition. Thus, the appeal of the assessee is allowed." 5. Therefore, since the addition made by the AO, on which penalty under consideration was levied, is deleted, the penalty thereon also does not survive. The AO is directed to delete the penalty levied. Theses grounds are decided accordingly.” 5. The ld.DR has not disputed this fact. The addition has been deleted by ITAT, therefore, there are no legs for the penalty to stand. Accordingly, we uphold the order of the ld.CIT(A). 6. In the result, appeal of the Revenue is dismissed. Order pronounced in the open Court on 30 th January, 2023. Sd/- Sd/- (S.S.GODARA) (DR. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 30 th Jan, 2023/ SGR* ITA No.29/PUN/2022 M/s. Rajendra M. Developers and Builders Pvt. Ltd. [A] 4 आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “बी” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.