ACIT, NEW DELHI vs. M/S. RELIGARE SECURITIES LTD., NEW DELHI

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ITA 2768/DEL/2017Status: DisposedITAT Delhi10 November 2020AY 2010-112 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty was not sustainable as the quantum additions on similar issues, including SAR expenses, had been allowed by the Tribunal in a related case. Therefore, the penalty levied under Section 271(1)(c) was deleted.

What were the facts?

The Revenue appealed against the CIT(A)'s deletion of penalty levied under Section 271(1)(c). The penalty was imposed due to disallowances on depreciation, prior period items, and SAR scheme expenses.

What were the issues?

Whether penalty under Section 271(1)(c) is sustainable when the underlying additions have been deleted by a higher appellate authority. The impact of a favourable decision in a related case on penalty proceedings.

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, DELHI BENCH ‘F’, NEW DELHI

Before: Sh. Amit ShuklaDr. B. R. R. Kumar

For Respondent: Ms. Sushma Singh, CIT, DR
Hearing: 05.11.2020Pronounced: 10.11.2020

Per Amit Shukla, Judicial Member:

1.

The present appeal has been filed by the Revenue against the order of the ld. CIT(A)-7, New Delhi dated 27.02.2017.

2.

Following grounds have been raised by the assessee:

1. That on facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the penalty of Rs. 71,25,588/- levy by the AO u/s 271(1)(c) of I.T. Act, 1961

2. That on facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the penalty u/s 271(1)(c) of I.T. Act, 1961 only on the ground that the quantum addition on similar issue had been deleted by the Hon’ble ITAT in another case i.e. Religare Commodities Pvt. Ltd. Whereas the quantum addition in the case of assessee had been upheld by the Ld. CIT(A) holding that the loss on 2 Religare Securities Ltd. account of SAR expenses was capital in nature and not allowable as revenue expense.”

3.

The AO levied penalty of Rs.1,03,58,000/- u/s 271(1)(c) of the Income Tax Act, 1961. The penalty has been levied by the AO owing to the disallowances made by the revenue on account of depreciation claimed on UPS, claim of prior period items and SAR scheme expenses.

4.

These expenses have been allowed by the order of the Tribunal in vide order dated 09.10.2017. Hence, at this juncture, penalty levied u/s 271(1)(c) is not sustainable.

5.

In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 10/11/2020.

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