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ITA 6524/DEL/2017

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 5983 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 29-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “DELHI” ‘E’ BENCH, DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER आयकर अपील सं./I. T. A . N o. 6524 / D E L/ 2 0 1 7) ( नधा रण वष / A s s e s s m e n t Y e a r : 2 0 1 0 - 1 1 ) M a g n u m A v i a t i o n P v t. L td. S -2 4 1 , Pa n c h s h e e l P a rk , N e w D e l h i . बनाम/ V s . I n c o me T a x O f fi c e r , W ar d 16 ( 1 ) N e w D e l hi . थायी लेखा सं./जीआइआर सं./P A N / G IR N o . : A A D C M 8 6 6 8 C (अपीलाथ /Appellant) . . ( यथ / Respondent) अपीलाथ ओर से /Appellant by : None यथ क ओर से/Respondent by : M s . Pr in c y Si n gl a , S r. D R स ु नवाई क तार ख / D a t e o f H e a r i ng 02/12/2021 घोषणा क तार ख /D a te o f P r o n o u nc e me n t 21/12/2021 आदेश/O R D E R PER PRADIP KUMAR KEDIA - AM: T he c a p t i o n ed a pp ea l h as be e n fi l e d a ga i ns t t he order o f t h e Co mmi s s i on e r o f I nc o m e T ax ( A p pe a l s ) ( ‘C IT (A ) ’ in sh ort ), da t e d 25 . 0 8. 2 01 7 a ri s i n g fr o m t he pe na lt y o rde r p a s s e d b y t he A s s ess i ng O ff ic e r u/ s 27 1( 1) ( c ) d a t e d 22. 03 . 2 01 6 . 2. A s pe r it s g r ou n ds o f a ppe al , t h e a s s es s e e, i n es s e nc e, ha s c ha ll e n ge d t he l ev y o f pe na l t y o f R s . 2, 40, 7 94/ - i mp o s e d by t h e A s s es s i ng O f fi c e r a nd c o n f ir me d by t h e CIT (A ). I T A N o . 6 5 2 4 / D E L / 2 0 1 7 [ M a g n u m A v i a t i o n P v t . L t d . v s. I T O ] A . Y . 2 0 1 0 - 1 1 - 2 - 3. Br i e fl y s ta t e d i n th e s cr ut in y a s s es s me n t, t he As ses s i ng O ff ic e r ma de c e r t ai n a dd i t io ns / d i sa l l o w anc e s a s under : - ( 1 ) D is a l l o w a n c e o n a c c o u n t o f l e g a l a n d p r o f e s s i o n a l R s . 1 5 , 0 0 0 /- ( 2 ) L e g a l a n d p r o f e s s i o n a l e x p e n s e s c a p i t a l i z e d R s . 6 , 0 5 , 4 7 0 / - ( 3 ) D is a l l o w a n c e u / s 4 0 A (3 ) R s . 1 , 5 8 , 8 0 0 / - 4. A s a s e que l t he re t o , t he A ss es s i ng O ffi c e r i mp ose d pe na l t y o f Rs . 2, 40 , 79 4/ - o n t h e a fo re s ai d a ddi t i o n a g gr e g a t i ng t o R s . 7, 79 , 27 0/ -. In t h e fi rs t a p p e a l t h e a s s e ss ee di d not ge t a n y r e l i e f fr o m t h e CI T (A ) a g a in s t t he i m p os i t i o n of t he pe n a lt y. 5. A ggr i e v e d, t h e a s s es s e e pre fe rre d a pp ea l be for e t h e T ri b una l . N one ap pe ar e d fo r th e a s s es s e e a t t he ti me o f he a r in g. A c c o rd i n g l y , m at t e r w a s proc e ed ed e x p ar t e. 6. We ha ve t a k e n n o t e o f t he v ar i o us ord er s i n t he q ua nt u m pr o c e e d i n gs a nd th e p en al t y pr oc ee di ngs p as s e d b y the A O and t h e CI T( A ) a n d a l s o t h e m at e r i al p l a c e d i n th e c as e re co rds . 6. 1 T he A s s e s s in g O ffi c e r h as , i n t er a l i a, i mpo s e d p en a l t y for di s a l l ow a nc e u nd e r t he he a d “ l e ga l a n d p r o fe s s io na l e x pe ns e s a mou nt i n g t o Rs . 6, 05 , 47 0/ -“ . I t i s n ot ic e d th a t th e c or r o b or a t i on o f e xp e n di t u re h a s n ot bee n d i s pu te d pe r s e. Wh at h a s b ee n di s pu t e d i s t he ch ar ac t er i z at i o n o f e xp e ns e s . A s per t he as s e ss ee , t he e xp e n di t u re i s Re v e nu e i n n at ur e as a t tr i b ut ab le t o t he p ro fe s s i on a l fe e s pa i d f o r A r ts c an for bu i l di n g, de s ig ni ng a nd in t e ri o r. T he Re ve n ue on t h e ot h e r ha nd, be l i e ve s t h e s a me t o be c a pi ta l e xp e n di t u re an d t h u s , not de du c ti bl e fr o m t h e t a xa ble i nc o me . 6. 2 In t h e b ac kd ro p, w e t a k e no te o f t he j ud g me nt r e n d er ed i n t h e c as e o f CI T V s . R el i an c e P e t r o P r o d uc t s P v t . Lt d. (2 01 0) 32 2 I T R 15 8 ( S C), w h e re i n it w a s o bs er v e d t ha t b e c aus e th e as s e s s ee h a d c la i me d t h e e xp en d it ur e, w hi c h c a me w as no t a c ce pt ed o r w as n o t I T A N o . 6 5 2 4 / D E L / 2 0 1 7 [ M a g n u m A v i a t i o n P v t . L t d . v s. I T O ] A . Y . 2 0 1 0 - 1 1 - 3 - a cc e p t a bl e t o t he Re v en u e, t ha t by i t s el f c o ul d no t a tt r a c t p e na l t y u/ s 27 1( 1) ( c) . It w as e s se nt i a l l y h el d t ha t i m p os it io n o f pe n al t y fo r s uc h ty p es o f di sa l lo w a nc e s i s not t he i n t e nd me nt of l e gi s l a t u re . T h us , te s t ed o n t h e a fo r es a i d ju di c i a l v i e w , t he pen a l t y u/ s 27 1( 1 )( c) i s c le a r l y no t j us t i fi ed me r e l y on a c co u nt o f di s a ll ow a n ce . T he a ct i o n o f A O i s th u s ca nc e l l e d . 7. T he d is a l lo w a nc e ou t o f le ga l a nd p r o fe s s i on a l ex pe ns e s R s . 15 , 0 0 0/ - i s s t at e d t o b e w i th ou t an y c or r o bo r at i v e ev i d e n c e w a rra nt in g i mp o s it i on o f pe nal t y. Wh en w e no t e ci rc u ms t a n t i a l ly , t he t o t al l e ga l e x p e ns e s s t a nd a t Rs . 2 5 , 98, 88 0/ - . T he a s s es s e e ha s l ar ge a mo un t o f b ro u gh t fo r w a r d l o s s e s o f Rs . 6 0 , 20, 18 8 /- a nd re t ur n e d a ‘ N I L ’ I n c o me . Th us , w he n s e en c o nt ex tu al l y, s u ch s ma l l di s a l l ow a nc es s ho u ld n o t l e a d t o i m p os i ti on o f o ne rou s p e n a l ty m er el y a ll e gi ng a b s e nc e o f a n y c o nc r e te e v i d e nc e . T h e p en al t y o f t hi s di s a l l o w anc e is t hus , de l et e d. 8. T he p e na l t y h as b ee n a l s o i mp o s ed on d is a l lo w a nce o f Rs . 1, 58 , 80 0/ - u /s 40 A ( 3) o f t he A ct . Th e di s al l ow a n c e ha s b ee n c ar ri ed ou t on t h e g ro un d t ha t e xp e ns e s a m ou nt i ng t o Rs . 1,5 8, 800 / - w a s i nc ur r e d i n c a s h w hi c h a re a b ov e 2 0 , 0 0 0/ - u n de r t he h e a d “ re pa ir s a nd ma i n te na nc e o f ve hi cl e ”. T h e d e e mi n g p ro vi s i o ns o f s e c ti on 40 A ( 3) w a s t h us i n vo k ed a nd p e n a l t y w as i mp os ed an d c o n fi r m e d . T he b o na f i d es o f e xp e n se s i n cu r re d h a s n ot be e n qu es t i on e d b y A O. T he d is a l l o w a nc e h as be en c a r r i e d out me re l y be c a use th e c as h e xp e ns e s ex c e e d s p ec i fi ed l i mi t . 9. We s e e n o ju st i fi c a t i o n i n th e i mp os i t i o n o f pe nal t y o n s u ch di s a l l ow a nc es un d e r t he d e e mi n g pr o vi s io ns . T he pena lt y i s t hu s de l et e d. I T A N o . 6 5 2 4 / D E L / 2 0 1 7 [ M a g n u m A v i a t i o n P v t . L t d . v s. I T O ] A . Y . 2 0 1 0 - 1 1 - 4 - 10 . T he a p pe l la t e o rd e r o f t he C IT ( A ) is t hus s et as i d e a n d t h e A s s es s i ng O ffi c er i s di r ec te d to d e l e t e t he p e n a lt y i m pos e d in qu es t i o n. 11 . In th e re s ul t , t he ap pe a l o f t h e as s e s s ee is a llo w e d. Sd/- Sd/- (KUL BH AR AT) (PRADIP K UM A R KED IA) J UDICI AL M EMB ER ACCOU NTA NT MEM BER D e l h i : D a t e d 2 1 / 1 2 / 2 0 2 1 True Copy KAVITA ARORA, SPS आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. राज व / Revenue 2. आवेदक / Assessee 3. संबं*धत आयकर आय ु ,त / Concerned CIT 4. आयकर आय ु ,त- अपील / CIT (A) 5. 0वभागीय 3त3न*ध, आयकर अपील य अ*धकरण, DELHI / DR, ITAT, DELHI 6. गाड7 फाइल / Guard file. By order, ASSISTANT REGISTRAR ITAT, Delhi This Order pronounced in Open Court on 21/12/2021 I T A N o . 6 5 2 4 / D E L / 2 0 1 7 [ M a g n u m A v i a t i o n P v t . L t d . v s. I T O ] A . Y . 2 0 1 0 - 1 1 - 5 - Date of dictation 07.12.2021 Date on which the typed draft is placed before the dictating Member 08.12.2021/ 09.12.2021 Date on which the typed draft is placed before the Other Member Date on which the approved draft comes to the Sr. PS/PS Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr. PS/PS Date on which the final order is uploaded on the website of ITAT 23.12.2021 Date on which the file goes to the Bench Clerk Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order