MR. SHEKHAR DADARKAR , PROP. M/S. S.D CONSTRUCTION ,MUMBAI V. ASSTT. COMMISSIONER OF INCOME TAX 31(3), MUMBAI

ITA 3340/MUM/2024

AI Insights

The case involves Mr. Shekhar Dadarkar, the proprietor of M/s. S.D. Construction, who appealed against the penalty levied by the Assistant Commissioner of Income Tax, Mumbai, which was confirmed by the CIT(A). The penalty was imposed following the assessment of additional income due to non-genuine purchases and default in TDS deposits. The Tribunal examined the additions made by the Assessing Officer and the subsequent modifications by the CIT(A), ultimately deciding that the penalties were not warranted due to the lack of factual basis for the additions and the nature of the adjustments made.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 469881 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2008-2009
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHANGEPATIL PUSHKARAJ RAMESH DR
• Assessee Lawyers: ASHISH THAKUDESAI
• Keywords: TDS; Revision of order
• Section: 143(3); 263; 271(1)(c)

Judgement Text

"| आयकर अपीलीय अिधकरण \fा यपीठ, मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT & SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER I.T.A. No. 3340/Mum/2024 Assessment Year: 2008-09 Mr. Shekhar Dadarkar Prop. M/s. S.D. Construction Office No. 1 Poorti Vihar Co-op Hsg. Soc. Ltd. Opp. Guru Nanak Park Near Siddharth Hospital New Shastri Nagar Goregaon (W) Mumbai - 400104 [PAN: ADAPD8694G] Vs Asstt. Commissioner of Income Tax -31(3), Mumbai अपीला थ\u0016/ (Appellant) \u0017\u0018 यथ\u0016/ (Respondent) Assessee by : Shri Ashish Thakudesai, C.A. Revenue by : Shri Bhangepatil Pushkaraj Ramesh – Sr. D/R सुनवाई की तारीख/Date of Hearing : 30/01/2025 घोषणा की तारीख /Date of Pronouncement: 30/01/2025 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM: This appeal by the assessee is preferred against the order dated 27/04/2024 by NFAC, Delhi, [hereinafter ‘the ld. CIT(A)’] pertaining to AY 2008-09. 2. The solitary grievance of the assessee is that the ld. CIT(A) erred in confirming the levy of penalty u/s 271(1)(c) of the Act amounting to Rs. 3,52,380/-. 3. Briefly stated the facts of the case are that the assessee filed its return of income on 30/09/2008 declaring total income of Rs.54,16,070/- I.T.A. No. 3340/Mum/2024 2 which were subsequently revised on 29/09/2009 declaring total income of Rs.30,82,800/-. The return was assessed u/s 143(3) of the Act vide order dated 06/12/2020 determining the assessed income at Rs.38,01,670/-. Assuming the powers conferred upon him by the provisions u/s 263 of the Act, the PCIT, reviewed the order pursuant to which the AO assessed the total income at Rs.1,94,32,488/-after making the following additions:- a) nongenuine purchases – Rs. 2,09,547/- b) default in depositing TDS – Rs.77,55,361/- c) not deduction of TDs on payment of conducting charges – Rs.22,50,000/- d) proportionate disallowance of interest u/s 36(i)(iii) – Rs.54,15,910/- 4. The assessee preferred appeal before the ld. CIT(A) and the ld. CIT(A) confirmed the additions made by the AO on nongenuine purchases of Rs. 2,09,547/- and restricted the disallowance of interest to Rs.7,27,178/- and other additions where deleted. Penalty proceedings were separately initiated on the original additions though, subsequently it was pointed out to the AO that the ld. CIT(A) has deleted other additions and has restricted the addition on account of interest to Rs.7,27,178/- which is an ad hoc addition. The contention of the assessee did not find any favour with the AO who levied penalty on account of nongenuine purchases of Rs.2,09,547/- and addition of Rs.7,27,178/-. 4.1. Assessee preferred an appeal before the ld. CIT(A) but without any success. 5. Before us, the ld. Counsel drew our attention to the ledger account of M/s. Sally Décor to which the assessee credited Rs.2,09,547/- on I.T.A. No. 3340/Mum/2024 3 account of labour charges thought the AO has made addition as non- genuine purchases. The very basis of making the addition is incorrect though, the addition has been confirmed by the ld. CIT(A) but we are of the considered view that on such factual error, no penalty is leviable u/s 271(1)(c) of the Act. 6. Coming to the other addition of Rs. 7,27,128/-, the same has been restricted on adhoc basis without there being any concealment of income or filing of inaccurate particulars. Therefore, no penalty is leviable on this count also. Accordingly, we direct the AO to delete the penalty. 7. In the result, appeal of the assessee is allowed. Order pronounced in the Court on 30th January, 2025 at Mumbai. Sd/- Sd/- (SAKTIJIT DEY) (NARENDRA KUMAR BILLAIYA) VICE-PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 30/01/2025 *SC SrPs *SC SrPs *SC SrPs *SC SrPs आदेश की \u0015ितिलिप अ\u001aेिषत /Copy of the Order forwarded to : 1. अपीलाथ\u001c / The Appellant 2. \u0015\u001dथ\u001c / The Respondent 3. संबंिधत आयकर आयु\" / Concerned Pr. CIT 4. आयकर आयु\" ) अपील ( / The CIT(A)- 5. िवभागीय \u0015ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 6. गाड& फाई/ Guard file. आदेशानुसार/ BY ORDER, TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Mumbai "