THE DCIT, CIRCLE-6, AHMEDABAD vs. THE NARODA NAGRIK CO.OP. BANK LTD., AHMEDABAD

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ITA 1226/AHD/2015Status: DisposedITAT Ahmedabad15 January 2018AY 2009-102 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the loss claimed by the assessee was later confirmed by the Tribunal itself as an allowable business loss, the foundation for the penalty levy was removed. Therefore, the penalty was not sustainable.

What were the facts?

The Revenue appealed against the deletion of penalty levied under Section 271(1)(c). The penalty was based on a disallowance of a provision for loss on Central Government Securities claimed by the assessee bank.

What were the issues?

Whether penalty under Section 271(1)(c) can be levied when the underlying disallowance, which formed the basis for the penalty, was subsequently held to be an allowable business loss by the Tribunal.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “D” BENCH

Before: SHRI N.K. BILLAIYA & SHRI MAHAVIR PRASAD

For Appellant: Shri V.K. Singh, Sr. D.R

PER N.K. BILLAIYA, ACCOUNTANT MEMBER

1.

This appeal by the Revenue is directed against the order of the Ld. CIT(A)-3, Ahmedabad dated 13.02.2015 pertaining to A.Y. 2009-10.

ITA No. 1226/Ahd/2015 2 . A.Y. 2009-10 2. The only grievance of the revenue is that the ld. CIT(A) erred in deleting the penalty levied u/s. 271(1)(c) of the act amounting to Rs. 12,60,357/-.

3.

The roots for the levy of penalty lie in the assessment order dated 26.12.2011 framed u/s.143(3) of the Act.

4.

During the course of the scrutiny assessment proceedings, the A.O. noticed that the assessee has claimed a loss of Rs. 37,08,022/- by making provision on the basis of Accounting Standard in respect of Central Government Securities under investment vis-à-vis current assets.

5.

The disallowance of the claim of provision travelled up the Tribunal and the Tribunal in ITA No. 2358/Ahd/2012 vide order dated 16.05.2017 held that the loss claimed by the assessee bank is revenue in character and an allowable business loss.

6.

“Sublato Fundamento Cadit Opus” meaning thereby when the foundation is removed, the super structural must fall.

7.

Appeal filed by the Revenue is accordingly dismissed.

Order pronounced in Open Court on 15 - 01- 2018

Sd/- Sd/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER True Copy ACCOUNTANT MEMBER Ahmedabad: Dated 15/01/2018 Rajesh

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