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TMI Blog2016 (5) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of the hon'ble Supreme Court in the case of CIT v. Reliance Petroproducts P. Ltd. [2010 (3) TMI 80 - SUPREME COURT ]. In effect, we are of the view that the Assessing Officer was not justified in levying penalty on the amount disallowed since the said claim is supported by Accounting Standard-7 issued by the Institute of Chartered Accountants of India. Accordingly, we set aside the order of the learned Commissioner of Income-tax (Appeals) and direct the Assessing Officer to delete the penalty. - Decided in favour of assessee - I. T. A. No. 2641/Mum/2012 - - - Dated:- 18-11-2015 - B. R. Baskaran (Accountant Member) And Amarjit Singh (Judicial Member) For the Petitioner : Firoze Andhyarujina, M. N. Golvala For the Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued and pursuant to the penalty notice Shri Lalitha Vishwanathan, Manager (Taxation) appeared on behalf of the assessee-company and the Assessing Officer after providing opportunity of being heard to the assessee passed the order dated March 28, 2011 levying penalty of ₹ 3,16,48,949. Subsequently, the assessee filed an appeal before the learned Commissioner of Income-tax (Appeals), who confirmed the action of the Assessing Officer by his order dated January 27, 2012. Aggrieved by the order of the learned Commissioner of Income-tax (Appeals), the assessee is in appeal before us. 4. The learned authorised representative has argued that the notice dated February 28, 2006 was served on the assessee without explaining any reason for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 271(1)(c) is required to be taken. In support of this contention the learned authorised representative has placed reliance on the following case law : a) CIT v. Nayan Builders and Developers [2014] 368 ITR 722 (Bom) ; b) Schrader Duncan Ltd. v. Addl. CIT [2015] 37 ITR (Trib) 674 (Mum); c) Westin Hospitality Services P. Ltd. v. DCIT in I. T. A. Nos. 1274 and 1275/M/2013 (assessment years 2001-02 and 2002-03) order dated August 27, 2014 ; d) Advaita Estate Development P Ltd v. ITO [2013] 27 ITR (Trib) 112 (Mum) ; and e) CIT v. Reliance Petroproducts P. Ltd. [2010] 322 ITR 158 (SC). 5. On the other hand, the learned Departmental representative refuted the said contentions and argued that the assessee has mentioned in his r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer for the assessment year 2003-04, the Assessing Officer disallowed the claim, on incomplete contracts and added the amount of ₹ 8,61,19,588. In the instant case, it is to be seen as to whether the assessee has furnished inaccurate particulars of income or concealed the particulars of income to avoid tax liability or not. In view of the provisions of Accounting Standard-7, (revised-2002) it came to the notice that the assessee can recognise the expected loss. The said matter is hereby mentioned at page 118 of the paper book (Accounting Standard-7), i.e., recognition of expected losses, wherein it is stated at para 35 when it is probable that total contract costs will exceed total contract revenue, the expected loss should be reco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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