ITO WARD - 14(1), NEW DELHI vs. KALYANI FINVEST PVT LTD, NEW DELHI

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ITA 8698/DEL/2019Status: DisposedITAT Delhi12 September 2022AY 2013-146 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that Section 68 is applicable only to credits pertaining to the current assessment year. Since the share application money was a carried forward balance, the primary condition for invoking Section 68 was not met. Consequently, the penalty under Section 271(1)(c) was also not sustainable.

What were the facts?

The assessee received share application money, which was carried forward from previous years. The AO made an addition under Section 68 for this amount in the current assessment year. The CIT(A) deleted this addition.

What were the issues?

Whether Section 68 of the Income Tax Act can be invoked for share application money that is a carried forward balance from previous years. Whether penalty under Section 271(1)(c) is leviable when the primary addition is deleted.

Which sections of the Income-tax Act were involved?

Section 68,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, DELHI BENCH “C” NEW DELHI

Before: SHRI PRADIP KUMAR KEDIA & SHRI ANUBHAV SHARMA

For Appellant: CA यथ क ओर से /, Ms. Aabgina Chishti, Advocate
Hearing: 12.09.2022

आदेश/O R D E R PER PRADIP KUMAR KEDIA, AM:

1.

Both the captioned appeals have been filed at the instance of the assessee against the order of the Commissioner of Income Tax-5, New Delhi dated 29.08.2019 concerning AY 2013-14.

2.

Both the appeals have arisen from the same cause of action i.e. addition under section 68 of the Act in quantum proceedings in and imposition of penalty under section 271 (1) (c) of the Act thereon in A.Y.2013-14.

3.

We shall first take up appeal in ITA No.8690/Del/2019 concerning quantum additions under section 68 of the Act. 4. The revenue has challenged the relief granted by the CIT(A) on an addition of Rs.9,40,10,000/- made by the AO on account of receipt of share application money by invoking 68 of the Act. 5. The CIT(A) in the first appeal took note of the factual position and returned the finding in favour of the assessee as reproduced here under :-

6.

We have heard the rival submissions and perused the orders passed by the AO and the CIT(A). We straightaway notice the factual position that the share application money in question were not received or credited in the financial year 2012-13 relevant to A.Y. 2013-14 in question but such money were admittedly carried forward balance since last 3-4 years. This being so the primary condition for invoking the section 68 is not satisfied at the first instance Section 68 is applicable only qua the credit entries pertaining to the subject Assessment Year. The remedy, if any, lies with the revenue in the year in which the credit were actually received and not in the subsequent year as is the case in the present appeal. The issue is no longer res-integra including CIT Vs. Usha Stud Agriculture Farms Ltd. 301 ITR 384 (Del) (2009) and settled in favour of the assessee by plethora of decisions. We thus see no infirmity in the action of the CIT(A) in deleting the additions made by the AO towards entries not found credited in the previous year relevant to A.Y.2013- 14 in question. We thus see no warrant to interfere with the first appellate order.

7.

In the result, the appeal of the revenue in is dismissed. (A.Y.2013-14) 8. The revenue has challenged the deletion of penalty of Rs.3,05,01,668/- under Section 271 (1) (c) of the Act corresponding to the addition of Rs.9,40,10,000/- on account of share application money under Section 68 of the Act challenged in ITA No.8690/Del/2019 (supra). 9. In the light of the discussion in quantum proceedings where the action of the AO was not found tenable on the touchstone of section 68 of the Act, the foundation for imposition of penalty corresponding to such untenable addition could naturally not survive. The CIT(A) thus has rightly reversed and cancelled the penalty in question. We thus, see no reason to interfere with the order of the CIT(A) in the absence of any infirmity therein. We thus, see no merit in the appeal of the revenue. 10. In the result, the appeal of the revenue in ITA No.8698/Del/2019 is also dismissed. 11. In the combined result, both captioned appeals of revenue are dismissed.

This Order was pronounced in the open court on 12/09/2022

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