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TMI Blog2016 (11) TMI 1052X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal in the quantum proceedings and the Tribunal held that the assessee resorted to create agreement for self-serving and the assessee arrange itself affairs to not to bring the said receipts of ₹ 14 lakhs to tax. As noticed by the Tribunal in its order unable to understand as to how ₹ 1 lakh was received towards bimonthly rent when the BMC fees itself is exceeded the sum of ₹ 3.75 lakhs (rounded off). Further unable to appreciate the fact of M/s. Deesha reimbursed the expenditure on the painting of the entire building amounting to more than ₹ 10.5 lakhs when the scaffolding for display of the advertisement is only in the area of 80 X 120 sq ft. I am absolutely convinced on the fact that the affairs are not wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) failed to appreciate that the claim was bonafide and debatable. 2. Briefly stated relevant facts of the case are that the assessee is a Co-operative Housing Society (CHS) and filed the return of income declaring the total income of ₹ 68,784/-. AO completed the assessment u/s 143(3) of the Act after making addition of ₹ 15 lakhs and the assessed income was determined at ₹ 19,61,280/-. In the assessment, AO noticed that the assessee received ₹ 15 lakhs from one M/s. Deesha Leasecon Pvt Ltd (Deesha). The assessee allowed Deesha to erect a scaffolding for a display against the receipt of ₹ 15 lakhs. ₹ 1 lakh was received towards the advertisement rights @ ₹ 15,000/- per month. In addition, ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of painting on the society building and ₹ 77,370/- being cost of material and other accessories. AO also perused the two agreements ie one for the sum of ₹ 1 lakh and the other for the sum of ₹ 14 lakhs and noticed that the said agreements constitute self serving document to suite the assessee s attempt to not to disclose ₹ 14 lakhs for taxation. On perusal of the said agreements, AO noticed that the said second agreement does not refer the area of the building before painting and came to the conclusion that the painting of the entire building was not borne within the facts. AO further reasoned that M/s. Deesha never agreed to reimburse the expenditure incurred for painting of the entire building. As per the AO, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of the scaffolding and the relate structures are part and parcel of the regular maintenance and therefore, incurring of the expenditure on painting, watch and ward etc has no relevance on advertisement. Therefore, these cannot be allowed u/s 37(1) or section 57 of the Act. Tribunal dismissed the alternative contentions also. Relying on the various decisions discussed in para 2.4.14 to 2.4.20, CIT (A) confirmed the penalty levied u/s 271(1)(c) of the Act relatable to the addition of ₹ 14 lakhs. The penalty relatable to the sum of ₹ 1 lakh, which was already offered by the assessee in the return of income was deleted. Aggrieved with the same, assessee is in appeal before the Tribunal. 5. During the proceedings before the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to why the fees to BMC amounting to ₹ 3,75,360/- was paid when the rental income received by the assessee is only ₹ 50,000/-. 6. On the other hand, Ld DR for the Revenue relied heavily on the order of the ITAT, CIT (A) and the AO for facts and legal propositions. 7. After hearing the Ld DR and on perusal of the orders of the Revenue Authorities as well as the relevant material placed on record, I find, it is an undisputed fact that the assessee received the said amount of ₹ 14 lakhs from M/s. Deesha and the same was spent towards painting of the entire building spending a sum of ₹ 10,58,629/-. Some of the amount was spent for erecting the scaffolding for bearing the display boards. It is the claim of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We have also perused the contents of paras 2.4.20 and 2.4.21 of the CIT (A) s order and find they are relevant. Considering the importance of the said paras for the sake of completeness of this order, the same are extracted as under:- 2.4.20. In view of the above factual and legal analysis, I do not find any infirmity in the action of the Ld AO and accordingly, confirm the act of imposition of penalty by the Ld AO especially keeping in view the following case laws:- i) Sharma Alloys (I) Ltd (2013) 37 Taxmann.com 51 (Mad.) penalty leviable for deliberate deception of the claim. In the garb of bona fide claim the assessee cannot escape levy of penalty. The object behind the enactment of section 271(1)(c) read with Explanations ..... X X X X Extracts X X X X X X X X Extracts X X X X
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