Rushi Builders And Developers , Mumbai vs Assessee

ी बी. आर. भा करन, लेखा सद य एवं ी संजय गग , या यक सद य के सम । BEFORE SHRI B. R. BASKARAN, AM AND SHRI SANJAY GARG, JM

आयकर अपील सं./I.T.A. No. 6684/Mum/2012 ( नधा रण वष / Assessment Year: 2007-08)

Rushi Builders and Developers Asst. CIT-15(3), Hotel Bay View, Gorai Khadi, Mumbai L. T. Road, Borivali (W), बनाम/ Mumbai-400 091 Vs.

थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. AAHFR 4343 J (अपीलाथ# /Appellant) : ($%यथ# / Respondent)

अपीलाथ# क& ओर से / Appellant by : None

$%यथ# क& ओर से/Respondent by : Shri Love Kumar

ु वाई क& तार,ख / सन : 04.03.2015 Date of Hearing घोषणा क& तार,ख / : 04.03.2015 Date of Pronouncement

आदे श / O R D E R Per Sanjay Garg, Judicial Member :

The present appeal has been preferred by the assessee against the order of the ld. CIT(A)-26 dated 13.08.2012. The assessee has agitated the sustaining of the levy of penalty at Rs.3,83,890/-.

2. The brief facts of the case are that during the assessment proceedings it was observed by the A.O. that the assessee had claimed deduction of interest expenses of Rs.11,40,492/- without deducting TDS. He, therefore, made a disallowance of the said 2 ITA No. 6684/Mum/2012 (A.Y. 2007-08) Rushi Builders and Developers vs. Asst. CIT

expenditure as per the provision of section 40(a)(ia) of the Act. The penalty proceedings u/s.271(1)(c) of the Act were also initiated. In the penalty proceedings, the assessee submitted before the A.O. that there was only a technical lapse on the part of the assessee in non production of proof of Forms No. 15G, which were misplaced and not traceable. The assessee also submitted that certain payments of interest were made to HUF's and the assessee was under bona fide belief that the payments of interest to HUF did not call for any deduction of tax at source. The A.O., however, did not agree with the submissions of the assessee and held that the assessee had furnished wrong particulars of income and thereby had concealed its income. He, therefore, levied the impugned penalty u/s.271(1)(c) of the Act.

3. In the first appeal, the ld. CIT(A) confirmed the penalty so levied by the A.O. The assessee is thus in appeal before us.

4. We have heard the rival contentions and have also gone through the records. In this case, the penalty has been levied for disallowance of expenditure u/s.40(a)(ia) of the Act. It is not a case of furnishing of inaccurate particulars of income or concealment of income. The failure to deduct the TDS on the part of the assessee has resulted in disallowance of expenditure. The assessee had not furnished any inaccurate particulars of income or expenditure. The assessee has already faced the consequences by way of disallowance of expenditure for non-deduction of TDS as per the provisions of section 194C of the Act. It is not the case of the Revenue that the assessee had not incurred the expenditure claimed or that the claim of expenditure was bogus or incorrect. The disallowance of expenditure was attracted due to non-deduction of TDS and it cannot be said to be a case of concealment of income or furnishing of inaccurate particulars of income. The levy of penalty u/s.271(1)(c) of the Act is not attracted in this case and the same is accordingly ordered to be deleted.

3 ITA No. 6684/Mum/2012 (A.Y. 2007-08) Rushi Builders and Developers vs. Asst. CIT

5. In the result, the assessee's appeal is hereby allowed.

प2रणामतः नधा 2रती क& अपील वीकृत क& जाती है ।

Order pronounced in the open court on March 4, 2015

Sd/- Sd/-

(B. R. Baskaran) (Sanjay Garg) लेखा सद य / Accountant Member या यक सद य / Judicial Member मुंबई Mumbai; 8दनांक Dated : 04.03.2015 व. न.स./Roshani, Sr. PS

आदे श क" # त%ल&प अ'े&षत/Copy of the Order forwarded to :

1. अपीलाथ# / The Appellant

2. $%यथ# / The Respondent

3. आयकर आय9 ु त(अपील) / The CIT(A)

4. आयकर आय9 ु त / CIT - concerned

5. <वभागीय $ त न=ध, आयकर अपील,य अ=धकरण, मंब ु ई / DR, ITAT, Mumbai

6. गाड फाईल / Guard File आदे शानस ु ार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई / ITAT, Mumbai