Itxa/1344/2016 Of Pr. Commissioner Of Income Tax, Central-1 v. Parinee Developers Pvt Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 1344 OF 2016 Pr. Commissioner of Income Tax-1 .. Appellant v/s. Parinee Developers Pvt. Ltd. .. Respondent Mr. Suresh Kumar for the appellant Mr. Nishant Thakkar a/w Mr. Hiten Chande I/b PDS Legal for therespondent CORAM : AKIL KURESHI & M.S. SANKLECHA, J.J. P.C. DATED : 30[th] JANUARY, 2019 1.This appeal is filed by the Revenue to challenge the judgment ofthe Income Tax Appellate Tribunal ("the Tribunal" for short) raisingfollowing question for our consideration :- “(i)Whether on the facts and in the circumstances of the caseand in law, the Tribunal is justified in deleting the penalty leviedu/s 271(1)(c) of the Act without appreciating the fact that thepenalty was levied on enhancement made by CIT(A) on accountof admitted under reporting of profits by filing wrong estimate ofincome of expenditure?” 2.The respondent assessee is a private limited company. The issueinvolved is one of imposition of penalty under Section 271(1)(c) of theIncome Tax Act,1961 ("the Act" for short) in relation to assessee's returnof income for Assessment Year 2009-10. Having heard learned Counselfor the parties and having perused the documents on record, whatemerges is that the CIT(A) had made certain additions and therebyenhanced the taxable income of the assessee and also initiated penaltyproceedings. Ultimately, the penalty that was imposed under Section271(1)(c) of the Act came to be deleted by the Tribunal by theimpugned judgment. The Tribunal pressed in service several groundsfor deleting the penalty. However, it is not necessary to examine suchgrounds since only on the first ground recorded by the Tribunal, it ispossible to sustain the judgment. The Tribunal noted that the additionof Rs.28.62 crores made by the CIT(A) was on account of reworking ofthe estimated project cost based on actual cost incurred upto31.03.2013. The Tribunal noted that against the cost of estimated costRs.1628.02 crores, the CIT(A) adopted a sum of Rs.1425.19 crores asthe actual expenditure incurred on the project till the year end. TheTribunal noted that rest of the calculations made by the CIT(A) weredirectly related to the change in method of accounting rejecting theassessee's figures and the method of accounting in this regard. The Tribunal, therefore, observed that whatever be the better method ofaccounting, this was not a case of concealment of income leading topenalty. The Tribunal noted that the addition of Rs.28.62 crores hadthe genesis in the estimation on one side and preponement of theexpenditure on the other, based on change of method of accounting.Thus, in clear terms the Tribunal found that the assessee had neitherconcealed the income nor concealing the particulars of such income.The penalty was, therefore, correctly deleted. We may also record thatthe penalty was based on other additions with respect to which also theTribunal adopted the same principles. No question of law arises. 3.The tax appeal is dismissed. (M.S. SANKLECHA, J.) (AKIL KURESHI, J.)