2018 (4) TMI 1562 - AT - Income Tax

Penalty u/s 271(1)(c) - Disallowance of claim of deduction u/s 80IA - Addition of unexplained cash transactions - Disallowance of expenses u/ s 37(1) - Held that - Since the additions have been deleted or restored to the file of the AO. The Revenue has not rebutted the facts stated in the chart. Thus the penalty levied on these amount amounts would not be sustained. Therefore, we direct the AO to delete the penalty.

Summary

Issues:
Appeal against penalty confirmation for concealment of income and inaccurate particulars for assessment years 2005-06, 2006-07, and 2007-08.

Analysis:
1. The appeal for assessment year 2005-06 challenged the penalty of ?3,11,87,961 for alleged concealment/inaccurate particulars of income. The Tribunal noted that the penalty was imposed based on various disallowances and additions, including rejection of deduction claim u/s 80IA and other transactions. However, since the Tribunal had deleted the additions in the quantum proceedings, the penalty was deemed unsustainable. The AO was directed to delete the penalty.

2. The appeal for assessment year 2006-07 presented similar grounds as the previous year. The Tribunal reviewed the disallowances and additions, such as project consultancy expenses and site expenses, and found that they were either deleted or restored to the AO's file. As the Revenue did not contest the facts presented, and in line with the Tribunal's decision in a related case, the penalty was directed to be deleted.

3. In the appeal for assessment year 2007-08, the Tribunal examined disallowances of site expenses, project consultancy, technical support expenses, and adhoc disallowance of site labor expenses. Once again, the Tribunal observed that these additions were either deleted or restored to the AO's file. The penalty was deemed unsustainable, and the AO was instructed to delete it.

In conclusion, the Tribunal allowed all three appeals, directing the deletion of penalties imposed for concealment of income and inaccurate particulars. The judgments were pronounced on the 4th day of April 2018.