TaxTMI 
TaxTMI 
2026 (5) TMI 1336
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....T, Mumbai Bench, vide its order dated 13.10.2025 for A.Y. 2018-19, has deleted the quantum additions on which the impugned penalty was levied. 2. The Id. CIT(A) failed to appreciate that once the additions giving rise to the alleged misreporting were deleted, the very foundation and substratum of the penalty ceased to exist. 3. The ld. CIT(A) erred in not appreciating that existence of assessed income is a sine qua non for levy of penalty u/s 270A and, in the absence of any legally assessable income, there remains neither under-reported income nor misreported income within the meaning of the Act. 4. The ld. CIT(A) further erred in sustaining the penalty without appreciating the settled legal position that where the foundation assessment does not survive, the superstructure of penalty automatically falls. 5. The Id. CIT(A) thus erred in confirming a penalty which is unsustainable in law and liable to be deleted. GROUND NO. 2: Issue involved was debatable and legal in nature 1. The ld. CIT(A) erred in law and on facts in sustaining the penalty despite the fact that the issue involved was a debatable legal issue relating to taxabil....
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....) vehemently relied upon the orders passed by the lower authorities. 6. We have considered the submissions of both sides and perused the material available on record. The brief facts of the case are that the assessee is an individual and, for the year under consideration, filed his return of income on 18.09.2018, declaring a total income of Rs. 1,68,420/-. The return filed by the assessee was selected for compulsory scrutiny on the basis of information received from the Sub-Registrar, Mumbai, that the assessee purchased an immovable property for a consideration substantially less than the value adopted by the Stamp Duty Authority. Accordingly, statutory notices under section 143(2) and section 142(1) were issued and served on the assessee. During the assessment proceedings, it was noticed from the details filed by the assessee that M/s. Sugee Four Developers LLP, Mumbai ("Developer") entered into an agreement that the assessee, being a tenant along with other tenants and the landlord of the property, namely Mahalaxmi Building No. 1, Dadar (East), Mumbai, agreed to develop the said property. The assessee was in the possession/occupation of Room No. 4, admeasuring a total area of ....
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....Coordinate Bench of the Tribunal vide order dated 13.10.2025, deleted all the additions made by the AO, by observing as follows: - "5. We have heard the submission of both the parties and have gone through the orders of lower authorities carefully. The Learned Authorized Representative (Ld. AR) of the assessee submits that the assessee and his wife were joint tenant in the property known as Mahalaxmi Building, Hindu Colony, Dadar (E), Mumbai. The landlord granted development right to redevelop the property wherein the assessee was tenant. The assessee, his wife, landlord and builder entered into an agreement. In lieu of surrender of tenancy right, the assessee was allotted alternate accommodation being flat No. 401, in the building constructed thereon. Copy of agreement of permanent alternate accommodation is filed on record at page No. 46 to 80 of paper book. The assessee in addition to allotment of alternative flat also given relocation charges. The detail of such relocation charges is given on page No. 84-87 of paper book. The stamp duty value of car parking and stamp duty registration for development agreement was paid by developer. The assessee and his wife were regul....
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....mbai tribunal in case of Dr. Jayesh K. Shah, ITA No. 6743/Mum/2017, 175 ITD 751 (Mum.). On other receipt which include hardship compensation, brokerage charges, shifting charges, transit rent and stamp duty, Ld. AR of the assessee submits that all charges were paid by builder with no such amount was received during the year under consideration. The stamp duty was paid by developer; transit rent was paid on three years and was paid to the landlord. The lower authority failed to appreciate the fact that assessee is owner of half of the share and taking the entire value of alternative assets is absolutely unjustified. The Id AR of the assessee prayed for deleting all the additions. 7. On the other hand, Learned Senior Department Representative (Ld. Sr. DR) for the revenue supported the order of CIT(A). The Ld. Sr. DR for revenue submits that matter may be restore back to the file of assessing officer to verifying the facts, if the assessee is owner of 50% of share in newly constructed alternative accommodation/ flat received by assessee in lieu of surrender of tenancy right. All remaining receipt and addition thereof may be reconsidered by assessing officer. 8. We ha....