DCIT, CENTRAL CIRCLE 8(4), MUMBAI, MUMBAI vs. AURUM PLATZ PRIVATE LIMITED, NAVI MUMBAI

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ITA 2333/MUM/2025Status: DisposedITAT Mumbai02 July 2025AY 2018-193 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 the Revenue's appeal should be dismissed on the preliminary ground that the quantum additions deleted by the Tribunal have been appealed before the Hon'ble High Court. The Tribunal noted that the Hon'ble High Court had neither stayed the operation of the Tribunal's order nor barred the Tribunal from deciding penalty issues. Therefore, the appeal was dismissed on this ground. On merits, the Tribunal found no error or infirmity in the CIT(A)'s findings, considering that the substantive additions were deleted and the disallowance under Section 14A was restricted to Rs.3,62,500/-. The CIT(A) had correctly deleted the penalty levied on such disallowance. The Tribunal did not expressly leave any issue undecided.

What were the facts?

The Revenue has appealed against the order of the CIT(A)-50, Mumbai, dated 06/02/2025, concerning Assessment Year 2018-19. The appeal challenges the deletion of penalty by the CIT(A). The penalty was levied by the Assessing Officer (AO) based on an assessment order dated 30/12/2019, which computed total taxable income at Rs.22,27,42,921/-. This included business income of Rs.20,10,52,047/-, an addition of Rs.20,00,000/- under Section 69C, and a disallowance of Rs.1,96,90,874/- under Section 14A. The ITAT had previously deleted the additions related to capital gains classified as business income and the Section 69C addition, and restricted the Section 14A disallowance to Rs.3,62,500/-. Consequently, the CIT(A) deleted the penalty.

What were the issues?

1. Whether, on the facts and circumstances of the case and in law, the CIT(A) erred in deleting the penalty levied by the AO, considering that the appeal against the deletion of quantum additions by the ITAT is pending before the Hon'ble High Court? The Revenue contended that the appeal against the deletion of quantum additions by the ITAT is pending before the Hon'ble High Court. The Revenue did not provide further arguments on this ground or on merits. The Assessee did not present any arguments as recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 69C,Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, MUMBAI

Before: SHRI NARENDRA KUMAR BILLAIYA, HONBLE & SHRI SANDEEP SINGH KARHAIL, HONBLE

For Appellant: Shri Meet Shah, A/R
For Respondent: Shri Rajesh Kumar Yadav, CIT, D/R
Hearing: 30/06/2025Pronounced: 02/07/2025

आदेश/O R D E R

PER NARENDRA KUMAR BILLAIYA, AM:

1.

This appeal by the revenue is preferred against the order of the ld. CIT(A)-50, Mumbai [hereinafter “the ld. CIT(A)”] dated 06/02/2025 pertaining to AY 2018-19.

2. The grievance of the revenue read as under:- “1. On facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the penalty levied by the Assessing Officer, as the appeal is pending before the Hon’ble High Court against the deletion of quantum addition by Hon’ble ITAT.

2.

The appellant craves leave to add to, alter, amend, modify and/or delete any or all of the above said grounds of appeal, the appellant reserves its right to file further submissions in the appeal.”

2 3. A bare perusal of the aforementioned grounds shows that this appeal by the revenue has to be dismissed for the simple reason that the quantum addition deleted by the Tribunal has been appealed before the Hon’ble High Court. The Hon’ble High Court has neither stayed the operation of the order of the Tribunal, nor barred the Tribunal to decide the issues relating to the penalty. Therefore, on the ground stated above, the appeal deserves to be dismissed.

4.

However, on merits of the case, the roots for the levy of penalty lie in the assessment order dated 30/12/2019 framed u/s 143(3) of the Act by which the AO computed the total taxable income at Rs. 22,27,42,921/- after computing the business income at Rs. 20,10,52,047/- , addition u/s 69C of the Act Rs. 20,00,000/- and disallowance u/s 14A Rs. 1,96,90,874/-. The additions travelled up to the Tribunal and the Tribunal in & 2005/Mum/2021 vide order dated 20/06/2023, has deleted the additions on account of classification of capital gains as business income of Rs. 20,10,52,047/- and also deleted the addition of Rs. 20,00,000/- made u/s 69C of the Act and further restricted the disallowance made u/s 14A of the Act amounting to Rs.1,96,90,874/- to Rs.3,62,500/-.

5.

Since the substantive additions have been deleted and the disallowance u/s 14A of the Act has been estimated at Rs. 3,62,500/-, the ld. CIT(A) deleted the penalty levied by the AO on such disallowance.

6.

Considering the facts of the case in totality as discussed hereinabove, we do not find any error or infirmity in the findings of the ld. CIT(A).

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