THE DY. CIT, CIRCLE-4(1)(2), AHMEDABAD vs. M/S. TORRENT PVT. LTD., AHMEDABAD

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ITA 563/AHD/2017Status: DisposedITAT Ahmedabad29 November 2018AY 2003-042 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the quantum addition was deleted, the penalty levied under Section 271(1)(c) was also to be deleted. The assessee had followed the netting principle as per the jurisdictional High Court's judgment.

What were the facts?

The Revenue appealed the deletion of a penalty by the CIT(A). The ITAT had previously deleted the quantum addition for the assessment year 2003-04.

What were the issues?

Whether the penalty levied under Section 271(1)(c) is sustainable when the underlying quantum addition has been deleted. The applicability of the netting principle in determining the assessment.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH, AHMEDABAD

Before: SHRI MAHAVIR PRASAD & SHRI WASEEM AHMED

Hearing: 19.11.2018Pronounced: 29.11.2018

PER MAHAVIR PRASAD, JUDICIAL MEMBER:

This appeal has been preferred by the Revenue against order of ld. CIT(A) dated 19.12.2016 for the Assessment Year 2003-04. 2. The Revenue has taken the following ground of appeal :-

“Whether the ld. CIT(A) is right in law and on fact in deleting the penalty levied of Rs.4,84,75,000/- under section 271(1)(c) of the Act.”

3.

In this case quantum has been deleted by the ITAT in ITA No.1163/Ahd/2014 vide order dated 13.04.2018 and copy of the order has been filed by the assessee in Paper Book page nos.25 to 43 and relevant page is 42 paragraph no. 29, the same is reproduced as under :

29.

We have heard both the parties reiterating their respective stands. Case file perused. Learned senior counsel first of all takes us to page 24 in paper book. His case is that the assessee had shown investment amount in balance sheet of Rs.4,90,26,84,859/- as on 31.03.2003. He then refers to assessee’s P&L account creating provision for the impugned diminution amounting to Rs.13.85crores. This follows page 31(Schedule IV) indicating the assessee to have arrived at the above investment figure. Assessment Year: 2003-04 Lastly comes page 57 containing details of assessee’s provision in the impugned assessment order of Rs.69,46,73,244/- as well as similar provisions written back amounting to Rs.55,61,73,244/-. The assessee’s case accordingly is it has duly followed netting principle as per hon’ble juri ictional high court’s judgment in Vodafone Essar’s case (supra). These crucial facts evident from case record have gone unrebutted from Revenue side. We thus take into account all this cogent material as well as legal proposition settled by hon’ble juri ictional high court to accept assessee’s instant first substantive ground as it has duly followed the netting principle propounded in the hon’ble full bench decision. We make it clear that their lordships have already considered all the case laws including HCL Commet (supra). We thus accept assessee’s former substantive ground.

4.

Since the ITAT has given relief to the appellant in quantum proceedings, now nothing remains. Therefore, penalty imposed by the Revenue is deleted.

5.

In the result, appeal filed by the Revenue is dismissed. Order pronounced in the open Court on this 29th day of November, 2018. (WASEEM AHMED) Judicial Member Ahmedabad, the 29th day of November, 2018 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY

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