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TMI Blog2018 (10) TMI 723X X X X Extracts X X X X X X X X Extracts X X X X ..... R Per G Manjunatha, AM : This appeal filed by the revenue is directed against the order of the CIT(A)-33, Mumbai dated 05-02-2017 and it pertains to AY 2010-11. The revenue has raised the following grounds of appeal:- 1. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred on facts and in law in deleting the penalty Levied u/s. 271(l)(c) of the Income tax Act, 1,961, amounting to ₹ 80,4,044/-, without appreciating the view taken .by the AO. 2. The brief facts of the case are that the assessee firm is engaged in the business of builders filed its return of income for AY 2010-11 on 31- 07-2010 declaring total income of ₹ 2,49,96,730. The case was selected for scrutiny and the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adlapur under the head, Income from business or profession . The Ld.CIT(A), after considering relevant submissions of the assessee and also by considering the order passed by the ITAT held that once the addition based on which penalty u/s 271(1)(c) was imposed, has been deleted, there remains no ground for levy of penalty to survive. Accordingly, he deleted penalty levied by the AO u/s 271(1)(c) of the Act. The relevant observations of the Ld.CIT(A) is extracted below:- 9. I have carefully considered the above submssions of the AR of the appellant and I intend to agree with the contention made during appellate proceedings. The Hon'ble ITAT, Mumbai Bench G . in the assessee's own case for A..Y. 2010-11 in !TA No.6692/Mumn/2013 v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has capitalised the interest cost and other expenses to the Cost of Badlapur Land, which is inconsistence with treatment to a Capita! Asset. c) The capitalization of interest cost is also in conformity with Provisions of Income Tax Act applicable to a Capital Asset. d) Capitalisation of interest cost is neither in conformity with the accounting of inventories prescribed in AS-2 nor incompliance to the provisions of Income Tax Act as laid down by the Hon'bte Bombay High Court in the case of Lokhanawala Construction (supra) and other decisions. e) The Badlapur Land was vested as Capital Asset by the assessee through MOU dt. 4.04.7 998 entered into between the partners of the assessee firm which was executed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above facts and circumstances as well as legal position, we direct the AO to is treat the gains on sale of Badlapur Land as LTCG in place of business income. 10. Once the addition based on which penalty u/s. 271(1)(c) of the Act was imposed, has been deleted, there remains no ground for penalty to survive. Hence penalty of ₹ 84,49,0447- imposed by the AO u/s.271(1)(c) is deleted. 4. None appeared for the assessee. Therefore, we heard the Ld.DR and dispose of the appeal on the basis of material available on record. 5. We have heard the Ld.DR and considered the material available on record. The ITAT, Mumbai Bench G in ITA No.6692/Mum/2013, vide order dated 25-05-2016 has considered the issue of surplus from sale of land at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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