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TMI Blog2013 (10) TMI 597X X X X Extracts X X X X X X X X Extracts X X X X ..... el and donation because the assessee itself has disallowed the said expenditure from the cost of the construction and the Assessing Officer has also agreed to the same. On these facts, the levy of penalty under section 271(1)(c) by the Assessing Officer as well as confirmation thereof by the learned Commissioner (Appeals) on such disallowance of foreign travel and donation, has no legs to stand and, consequently, penalty is hereby deleted - Decided in favour of assessee. - ITA No.7634/Mum./2011 - - - Dated:- 24-5-2013 - Sanjay Arora and Amit Shukla, JJ. For the Appellant : Mr Snehal Shah For the Respondent : Mr Pankaj Kumar ORDER:- PER : Amit Shukla The present appeal is preferred by the assessee challenging the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture exclusively related to A and B wings and in response, the assessee submitted following computation: Total cost of construction upto 31.3.2001 12,78,13,088.00 Less: Expenses Relating to C Wing 40,19,370.00 Foreign Travel (A.Y. 97 98) 5,51,167.00 Donation 8,91,000.00 54,61,537.00 Less: Proportionate cost of land (@ 30% of Rs. 1,92,23,412) 57,67,023.60 Interest thereon @ 15% p.a. (for 7 years from 1.4.1997 to 31.3.2004) 60,55,374.78 1,18,22,398.38 Net construction cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st of construction upto 31.3.04 12,78,13,088.00 Less: Expenses Relating to C Wing 40,19,370.00 Foreign Travel (A.Y. 97 98) 5,51,167.00 Donation 8,91,000.00 54,61,537.00 Less: Proportionate cost of land (@ 30% of Rs. 1,92,23,412) 88,42,769.52 Interest thereon @ 15% p.a. (for 7 years from 1.4.1997 to 31.3.04) 92,84,908.00 1,18,27,677.52 Net construction cost of A B wing 10,42,23,873.48 The income from sale of A B wing is computed as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... travelling expenses or donation in the assessment order. This order of the Assessing Officer has attained finality as the assessee had not challenged the assessment order before the first appellate authority. 6. In the penalty order, the Assessing Officer proceeded with the premise that the addition has been made on the following grounds which is evident from Para 2 of the penalty order which is reproduced herein below: In the assessment order, the addition was made on the following grounds: i) Foreign Travel Expenses Rs. 5,51,167 ii) Donation Rs. 8,91,000 iii) Balance Profit as assessed after Consideration of FSI utilised Rs. 17,19,196 2.1 The additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order, for which, the Revenue is not in appeal. However, the learned Commissioner (Appeals) has confirmed the penalty on account of disallowance of foreign travel expenses and donation of Rs. 5,51,167 and Rs. 8,91,000 respectively. Such a finding of the learned Commissioner (Appeals) is again wholly erroneous on the facts as the Assessing Officer has not made any addition on this score in the quantum order. 9. After hearing both the parties, we find that not only the levy of penalty on the issue of disallowance of the above expenditure is erroneous but also the findings of the learned Commissioner (Appeals) are also untenable because, as stated above, no addition has been made on account of these two additions in the assessment order, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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