AI Drafter 
TaxTMI 
TaxTMI 
2018 (5) TMI 1015
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.... "1. Whether on the facts and in the circumstances of the case in law, the CIT (A) is correct in accepting the contention of the assessee that the mistake was occurred due to error on the part of the Auditor. 2. Whether on the facts and in the circumstances of the case in law, the CIT(A) failed to appreciate that assessee reduced its claim of expenditure after specific show cause notice was issued to the assessee and admission was not on account of suo-motto. 3. The appellant prays that the order of the Ld. CIT(A) be set aside and the order of the AO he restored. 4. The appellant craves leave to amend or alter any ground or add any other grounds which may be necessary." 3. The issue raised in ground No.1 i....
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.... declared during the year during the year at Rs. 2,35,45,609/- thereby resulting into excess WIP to the tune of Rs. 1,76,68,864/- and the balance WIP of Rs. 6,04,96,020/- was carried forward. 5. In the assessment proceedings, the assessee admitted that it was an inadvertent mistake and the claim of the cost of construction be restricted to the revenue of Rs. 57,80,000/- and the balance of cost of construction as written off against the sales be of Rs. 1,76,68,705/- be treated as part of WIP and carried forward accordingly. The AO after considering the plea of the assessee estimated the income at Rs. 1,80,60,702/- and imposed a penalty of Rs. 60,19,632/- being 100% tax effect by issuing a show cause notice by rejecting the contentions of ....
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....ring the course of assessment proceedings as the time for filing the revised return was already over and the fact that it has not preferred any appeal on the addition made by the AC, clearly shows the bona fides of the appellant. It is pertinent to mention here that the income which should have been brought to tax can be taxed for tax purposes but penalty will not arise as the penalty proceedings are to be viewed independently as held by a catena of cases. Therefore, penalty levied under section 271(1)(c) on Rs. 1,76,68,864 is not in order and the same is deleted." 7. The Ld. D.R. prayed before the Bench that the order of Ld. CIT(A) deleting the penalty was incorrect as the assessee has claimed excessive loss by apportioning higher cost ....
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....he Ld. CIT(A) has passed a very speaking and detailed order. The Ld. A.R. relied on the following decisions in support of his contentions. "i) Price water Coopers (P) Ltd Vs CIT [25 Taxmann.com 400 (SC)]. ii) CIT Vs Reliance Petroproducts (P) Ltd [189 Taxman 322(SC)] iii) CIT Vs Somany Evergree Knits Ltd [ ITA No. 1332 of 2011(Bom)] iv) Nayan C Shah v. Income Tax Officer [69 Taxmann.com 256(Guj)] v) PCIT Vs. Rana Sugar Ltd [81 Taxmann.com 77(Punjab Haryana)] vi) Narindera Industries v. ACIT [85 Taxmann.com 241(Chandigarh Bench - SMC)]" 9. The Ld. A.R. during the course of assessment proceedings also filed a copy of notice issued under section 274 r.w.s. 271(1)(c) of the Act dated 21.02.14 pointing out that AO has not specified t....
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....e course of assessment proceedings, on being pointed out by the AO, filed a revised computation admitting the inadvertent mistake in claiming higher cost of construction during the year. The issue before us is whether the claiming higher cost of construction out of WIP which is resulted into lower WIP at the year end to be carried forward in the subsequent year would amount to concealment of income or not. Looking to the facts and circumstances of the case in totality, the whole restriction of cost of construction out of WIP in the current year to the tune of Rs. 57,80,000/- and carrying forward the excess cost of construction to the extent of Rs. 1,76,68,705/- is tax neutral as it is not a disallowance or excess claim but a reduction in th....