TaxTMI 
TaxTMI 
2019 (3) TMI 475
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....alty u/s 271(1)(c) of the I.T. Act 1961 of Rs. 1,27,50,670/- imposed by the AO. 2. The Ld. Commissioner of Income Tax (Appeal) has erred in law and on the facts in ignoring the fact that the Ld. CIT(A) has confirmed the addition of Rs. 3,75,13,010/- made by AO in assessment order dated 21.12.2011. 3. The Ld. Commissioner of Income Tax (Appeal) has erred in law and on the facts in stating / deciding on issues like the assessee is a developer and not contractor without appreciating the fact that this issue has already been decided by the earlier CIT(A) and this issue is not open for adjudication at CIT(A) level again. 4. That the Ld. CIT(A) has erred on facts and on law in ignoring the fact that the companies which have provided unsecur....
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....as been estimated under deeming provisions, there is not merit imposing the penalty. In view of the fact that the appellant is consistently following the principles AS-9, there cannot be a standalone year where principles AS-7 could be applied. Hence, in view of the facts and the case laws the penalty under section 271(1)(c) of Rs. 1,27,50,670/- deserves to be deleted. The ground raised in appeal is allowed." (2.1) The present appeal before Income Tax Appellate Tribunal ("ITAT", for short) has been filed by Revenue against the aforesaid order dated 11.03.2016 wherein the Ld. CIT(A) deleted the penalty. At the time of hearing before use, the Learned Authorized Representative ("AR", for short) submitted that vide order dated 27.09.2016, ITAT....
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....r the assessee that the assessee has Declared huge income in the subsequent year after completion of the said project as against meagre income estimated by the AO. The project completion method is an accepted method of accounting for builders. The assessee is regularly following this method of accounting which has been accepted by the AO in the preceding as well as in the subsequent assessment year. Further the AS-7 as discussed by the AO and the CIT(A) is applicable only for contractors engaged, in the civil construction business and the same does not apply to builders/developers. It is an established legal proposition that an assessee can follow any recognized method of accounting and the condition is that the same method has to be foll....
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....ready reference and perusal. 4. The very basis of imposition of penalty has been deleted by the tribunal, hence there cannot be any case for levy of penalty for concealment of income and therefore, the order of the CIT(A) does not suffer from any infirmity." (2.2) On the other side, the Ld. Sr. Departmental Representative ("DR", for short) appearing for Revenue relied on the orders of the authorities below. (3) We have heard both sides patiently and we have also carefully perused the materials available on record. We are of the view that penalty U/s 271(1)(c) I.T. Act of Rs. 1,27,50,670/- levied by AO, and already deleted by the Ld. CIT(A); has no legs to stand when the corresponding additions made by the AO have already been deleted by....