2023 (7) TMI 606

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....kata u/s. 271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as the "Act"), dated 28.06.2019 for AY 2016-17. 2. Sole issue involved in this appeal is against the action of the Ld. CIT(A) in confirming the action of the Ld. AO in respect of imposing penalty u/s. 271(1)(c) of the Act of Rs. 4,49,908/- 3. Briefly stated, facts are that assessee is engaged in retailing of petroleum and diesel under the proprietary concern as M/s. M.H. Filling Centre operating petrol pump. Assessee filed his return of income on 17.10.2016, reporting total income of Rs. 68,63,440/-. Case was selected for scrutiny under CASS and assessment was completed u/s. 143(3) by making certain additions and disallowances, at an assessed total income of Rs. ....

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....he oil supplying company. The oil supplying company has given permission to render the trading business of motor spirit and lubricants which are the produce of the oil supplying company. According to the assessee, the entire petrol pump premises is to be handed over to the oil supplying company if the dealership agreement is terminated any time in future and any other person or concern who is appointed as a dealer by the oil supplying company shall do the business in the same premise and the assessee will continue to receive the lease rent of the land. On these submissions, it was contended that assessee is required to regularly repair the building relevant to the set up of petrol pump and incur these expenses which are revenue in nature. A....

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....r any reason. The court held that this cannot be the intention of the legislature. (AY. 2001-02) (CA No. 2463 of 2010 dt. 17-3-2010)." 5. Per contra, Ld. Sr. DR submitted that Ld. AO has examined the case of the assessee and arrived at a conclusion that the expenses are in the nature of capital, considering the quantum of expenses claimed by the assessee and, therefore, the penalty has been rightly imposed since capital expenditure has been claimed as revenue by the assessee. 6. We have heard the rival contentions and perused the material available on record. We note that the quantum of expenditure is not in dispute. The only point for our consideration is in respect of nature of the expenses which has been claimed by the assessee as ....