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TMI Blog2024 (6) TMI 407X X X X Extracts X X X X X X X X Extracts X X X X ..... sentation or suppression of facts. In our opinion, even if he wants to change the head of levying of penalty u/s 270A of the Act after agreeing with the contention of the assessee that it not falls under the limb for which the ld. AO has levied the penalty, he should give a fresh notice to the assessee, so as to give an opportunity of hearing to explain the case of the assessee under the limb which the CIT(A) has invoked. Admittedly, the NFAC has not carried out this exercise. On this count, the penalty cannot be levied. Disallowance of expenditure made by ld. AO on estimate basis though the assessee has filed all the necessary details of expenditure, which is not accepted by the ld. AO for the reason best known to him and as such, this case is not fit for levy of penalty u/s 270A(9)(a) or 270A(9)(c) of the Act. Authorities proceeded merely on the basis of findings in the quantum proceedings and have not independently examined the matter for levy of impugned penalty. Disallowance of expenditure by itself cannot be the reason to levy the penalty u/s 270A(9)(a) or 270(9)(c) of the Act. The addition is only on estimate basis and the ld. AO could not prove that there was non- incurring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve grounds are with regard to levy of penalty u/s 271A of the Act. 2.1 Facts of the case are that t he assessee is carrying on real estate development business. During the previous year it has converted its own 2 acres prime Bangalore site into 117 flats (18 floors high rise building with 3 floors underground parking) and achieved a turnover of Rs. 50,85,11,249/-. It claimed various expenditure of Rs. 49,51,98,852/- including depreciation, incurred wholly and exclusively for business. This was subjected to Tax audit u/s 44AB and the audit report was filed along with the return of income. The case was selected for scrutiny. During the course of scrutiny assessment, the ld.AO asked the assessee to produce bills for Rs. 6,52,936/- claimed as Farm work expenses paid to individuals. All the payments are through Bank and were subject to TDS. As the assessee has not produced the bills this was added to the returned income. Further, the AO found expenses for the installation charges of Rs. 99,55,404/- was paid to various entities. All the payments are through Bank and were subject to TDS. AO has asked for the bills of the same. However, assessee was unable to provide all the bills in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that levy of penalty u/s 270A(9)(c) of the Act. The ld. CIT(A) has confirmed the penalty u/s 270A(9)(a) of the Act, which was not the case of ld. AO. On the other hand, case of the ld. AO was the levy of penalty u/s 270A(9)(c) of the Act. According to the assessee, all expenses are supported by vouchers recorded in the books of accounts of the assessee and payment through banking channels and due TDS has been made and the books of accounts of the assessee were duly audited by statutory/tax auditors. According to the ld. A.R., adhoc disallowance was made by ld. AO for the reason best known to him cannot qualify for levy of penalty u/s 270A(9)(a) or (c) of the Act. He submitted that all the details for the purpose of assessment i.e. bills, vouchers, receipts, etc. were produced by the assessee. At the time of assessment, the ld. AO without specifying the specific discrepancies in the books of accounts of the assessee, he disallowed 10% of the expenditure mentioning that assessee was unable to provide all details in respect of expenses claimed. The assessee has furnished full details of expenses i.e. Form Fire Safety Expenses at Rs. 6,52,936/- and Tor Steel Rolling expenses at Rs. 9,9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses with ledger and breakup along with the TDS reconciliation if any. Assessee has furnished the details for the same. On verification it is found that Expenses for the form work of Rs. 6529S6/- was paid to individual, however no details submitted for the genuineness for the same. Hence an amount of Rs. 652936A- is disallowed and added to the income of the assessee. (Addition : Rs. 6,52,936/-) 5: Disallowance on the Torsteel Rolling etc Expenses: It was noticed from the submission filed by the assessee that assessee has claimed a sum of Rs. 48307977/- as expenses on the various heads i.e (Torsteel Rolling etc Expenses) for the construction purpose. Assessee was asked to substantiate the said expenses with ledger and breakup along with the TDS reconciliation if any. Assessee has furnished the details for the same. On verification it is found that Expenses for the installation charges of Rs. 9955404- was paid to various entity, however assessee was unable to provide the all details in respect of the expenses claimed. Hence 10% of the said amount/ expenses i.e Rs. 9,95,541/- (10% of Rs. 9955404) is disallowed and added to the income of the assessee. (Addition: Rs. 9,95,541/-) Penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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