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TMI Blog2023 (5) TMI 706X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be rejected. A legal claim or change of opinion cannot partake character of concealment. Section 43CB has been inserted w.e.f. 1/4/2017. Hence Section 43CB is not applicable to the year under consideration. Revenue has raised a ground that Assessee had violated law by not following AS-7 method of Accounting, however, it was never, a compulsory method for the year under consideration. Hence, there is no violation qua AS-7. We agree with the Ld. CIT(A) that Penalty u/s 271(1)(c) is not sustainable - Decided against revenue. - ITA No.667/PUN/2022 - - - Dated:- 15-5-2023 - Shri S.S. Viswanethra Ravi, Judicial Member And Dr. Dipak P. Ripote, Accountant Member For the Assessee : Shri Rajiv Thakkar, AR For the Revenue : Shri M.G.Jasnani, Jt.CIT ORDER PER DR. DIPAK P. RIPOTE, AM: This appeal filed by the Revenue is directed against the order of ld. Commissioner of Income Tax(Appeals), Pune-11, dated 30.06.2022 emanating from the order of the ACIT, dated 30.11.2018 under section 271(1)(c)of the Income Tax Act, 1961 for the A.Y. 2016-17. The Revenue has raised the following grounds of appeal: 1. The CIT(A) erred both on facts and in law in passing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Raviraj Pashankar Developers and Project Aurete is being constructed by Raviraj Ventures. We do maintain the books of accounts of both the firms on day to day basis. On going through the tentative Profit and Loss Account of the above said firms by FY 2015-16, it is clear that no revenue has been recognized by these firms w.r.t. aforesaid projects. Q.26) It is evident from the aforesaid certificates given by the architect w.r.t. projects Crossroad and Aurete that the aforesaid projects have crossed the threshold limit as prescribed in Accounting Standard notified by ICAI for recognizing the revenue. However, you have not recognized any revenue w.r.t. aforesaid projects. Please explain. Ans: Sir, we have been regularly following project completion method of accounting. We were not aware of the fact that the revenue w.r.t. aforesaid project should have been recognized after crossing the threshold limit as prescribe in the accounting standards notified by ICAI. However, after consulting our taxation experts, we realize that considering the stage of completion of the projects mentioned above, the revenue should have been booked. 2.1 The assessee had filed its origi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Aggrieved by the order of the ld.CIT(A), the Revenue is in appeal before this Tribunal. Submission of ld.DR:- 3. Ld.DR relied on the order of the AO. Ld.DR explained that assessee had not shown the income in original return filed u/s 139(1) of the Act. Only after the search, when specific document, i.e., certificate of the architect was found, the assessee admitted that assessee had not disclosed its correct income. The partner of the assessee admitted the same fact in statement recorded u/s. 132(4) of the Act. Till date, assessee has not retracted the said statement. Assessee filed return in response to notice u/s. 153A showing the total income at Rs.4,61,02,130/-. As per explanation 5A to s.271(1)(c), the concealment is deemed. Explanation-5A is a deeming provision. Once there is a difference in the income shown in the original return filed u/s.139(1) and income shown in response to notice u/s 153A, as per explanation 5A, the concealment is deemed. Therefore, in this case, as per explanation 5A there is deemed concealment. Ld.AR submissions:- 4. Ld.AR filed paper book. Ld.AR explained that assessee was following project completion method. Therefore, asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised return of Income u/s 139(5) on 17/10/2016, showing Total Income of Rs. 4,61,02,130/-, which was processed u/s 143(1) on 28/04/2017. It means the department has accepted the revised return of the assessee. Subsequently on receipt of notice u/s 153A, the assessee filed a return showing Total Income of Rs. 4,61,02,130/- on 31/05/2017. Thus, the Total Income shown in the revised return and Return filed in response to notice u/s 153A is same. The AO passed assessment order u/s 143(3) rws 153A on 04/05/2018 accepting the Total Income of the assessee of Rs.4,61,02,130/-. The AO initiated Penalty u/s 271(1)(c) of the Act. The AO levied Penalty u/s 271(1)(c) of the Act invoking explanation 5A . The AO levied Penalty only on one ground that the assessee offered additional income only because of search. Though the assessee had explained that assessee was following Project Completion Method. We are aware that explanation 5A to Section 271(1) has introduced the deeming fiction. However, in this case the difference in the return of Income is only because of Method of Accounting. It is not disputed that assessee was following Project Completion Method which was allowed for AY 2016-17. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X
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