AKSHAY JAIN,GHAZIABAD vs. DCIT, CIRCLE-1, GHAZIABAD

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ITA 7224/DEL/2018Status: DisposedITAT Delhi24 April 2019AY 2014-154 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 deleted the addition of Rs. 30,19,500/- made under Section 68 read with Section 115BBE. Since the basis for the penalty no longer existed, the penalty was also deleted.

What were the facts?

The Assessing Officer made an addition to the assessee's income on account of long-term capital gains from share sales. The CIT(A) confirmed the penalty levied under Section 271(1)(c) after enhancing the income further.

What were the issues?

Whether the penalty levied under Section 271(1)(c) is sustainable when the underlying addition has been deleted by the Tribunal.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 143(3),Section 68,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’ NEW DELHI

Before: SHRI N.S. SAINI

For Appellant: Adv. Ishita Gupta, CA
For Respondent: Shri S.L. Anuragi, Sr. DR
Hearing: 11.04.2019Pronounced: 24.04.2019

ORDER This is an appeal filed by the assessee against the order of Ld. CIT(Appeals), Ghaziabad dated 31.08.2018 for AY 2014-15.

2.

The only issue involved in this appeal is that the CIT(A) erred in confirming the levy of penalty u/s 271(1)(c) of the Act.

3.

The brief facts of the case are that in an assessment made u/s 143(3) of the Act the Assessing Officer completed the assessment at an income of Rs. 41,20,100/- by making an addition of Rs. 20,19,500/- by treating the long term capital gain from sale of shares shown by the assessee of Rs. 20,19,500/- as unexplained cash credit u/s 68 of the Act and thereby assessing the income at Rs. 40,20,100/- in place of Rs. 21,00,600/- shown by the assessee.

3. Thereafter, the AO initiated penalty proceedings u/s 271(1)(c) of the Act.

4.

On appeal, the Ld.CIT(A) observed that during the course of assessment the AO made addition on account of long term capital gains of Rs. 20,19,500/- by allowing benefit of Rs. 10 lakhs for income disclosed by the assessee under IDS. The CIT(A) observed that on verification made during appeal proceedings revealed that assessee had not declared Rs. 10 lakhs towards long term capital gains in the IDS, therefore, he enhance the income of the assessee by Rs. 10 lakhs and also imposed penalty u/s 271(1)(c) of the Act for failure to substantiate the claim made in the return of income.

5.

Before me, the AR of the assessee submitted that the Tribunal vide its order dated 17.01.2019 in in AY 2014-15 deleted the addition of Rs. 30,19,500/- made u/s 68 read with section 115BBE on account of sale of equity shares and hence, submitted that in view of the above findings of the Tribunal penalty levied u/s 271(1)(c) does not survive and requires to be deleted.

6.

The DR could not controvert the above submission of the AR of the assessee. I find that it is not in dispute that addition of Rs. 30,19,500/- made u/s 68 read with section 115BBE on account of sale of equity shares was deleted by the Tribunal vide its order dated 17.01.2019 passed in in AY 2014- 15. Therefore, the very basis for levy of penalty not surviving the levy of penalty also does not survive. I, therefore, delete the levy of penalty on addition of Rs. 30,19,500/- made u/s 68 read with section 115BBE of the Act and allow the appeal of assessee.

7.

In the result, the appeal of assessee is allowed.

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