SUJATA SHAH,MUMBAI vs. ITO 19(3))(4), MUMBAI

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ITA 4346/MUM/2018Status: DisposedITAT Mumbai07 April 2021AY 2012-133 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that declining the assessee's claim for deductions and additions, in itself, does not attract penalty. Relying on established legal precedents, the Tribunal found the penalty unjustifiable.

What were the facts?

The assessee's income was assessed at a higher amount than declared due to additions for interest deduction, low drawings, unexplained cash deposit, and car sale loss. The Assessing Officer levied a penalty under Section 271(1)(c) for these additions.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable solely on account of additions made to the assessed income when the assessee's claims were declined.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI

Before: SHRI SHAMIM YAHYA, AM & SHRI AMARJIT SINGH, JM

Hearing: 03/03/2021Pronounced: 07/04/2021

O R D E R

PER AMARJIT SINGH, JM:

1.

The assessee has filed the present appeal against the order dated 03.05.2018 passed by the Commissioner of Income Tax (Appeals)-04, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y. 2012-13 in which the penalty levied by AO has been ordered to be confirmed.

2.

The assessee has raised the following grounds: - “

1 Penalty levied u/s 271(1)(c) of the Act amounting to Rs.1,90,222/- be deleted." A.Y. 2012-13

3. The brief facts of the case are that the assessee filed her return of income on 11.07.2012 declaring total income to the tune of Rs.3,69,694/- for the A.Y.2012-13. Thereafter, the assessment was selected for scrutiny and order u/s 143(3) was passed on 09.02.2015 determining total income to the tune of Rs.10,35,540/-. The AO has raised the following addition read as under.:- (i) Deduction claimed on interest payment Rs.1,64,597/- (ii) Low drawings Rs.2,00,000/- (iii) Unexplained Cash Deposit Rs.2,00,000/- (iv) Claim of loss on Car sale and depreciation Rs.1,01,250/- Total Rs.6,65,847/- The penalty proceeding u/s 271(1)(c) was initiated and after the reply of the assessee, the penalty in sum of Rs.1,90,222/- was levied. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who confirmed the order, therefore, the assessee has filed the present appeal before us.

4. We have heard the argument advanced by the Ld. Representative of the revenue and have gone through the case carefully. We find that the penalty was levied by AO on account of disallowance of deduction claim on interest payment, low drawings unexplained cash deposit, claim of loss of car and depreciation. Declining the claim of the assessee nowhere attract the penalty. Penalty is not to liable to be sustainable in view of the law settled in CIT Vs. Reliance Petro Products (P) Ltd. (2010) 322 ITR 158, Naresh Chand Agarwal V. CIT and the Hon’ble Gujarat High Court in the case titled as National Textiles Vs. CIT 2001 164 CTR 2009 (Guj). Accordingly, in view of the above mentioned law (supra), we are of the view that the penalty upon the said addition is not justifiable, therefore, we A.Y. 2012-13 set aside the finding of the CIT(A) on this issue and delete the penalty. Accordingly, we decide this issue in favour of the assessee against the revenue.

5.

In the result, the appeals filed by the assessee are hereby allowed.

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