MOHD RAZA AKBERALI GHUGHARIA,MUMBAI vs. ITO 15(2)(3), MUMBAI

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ITA 4603/MUM/2018Status: DisposedITAT Mumbai15 January 2020AY 2005-063 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 since the addition on which the penalty was levied had been deleted by a previous order, the penalty could not survive. Consequently, the penalty was deleted.

What were the facts?

The assessee challenged a penalty imposed under section 271(1)(c) of the Income Tax Act. This penalty was based on an addition made towards long-term capital gains calculated under section 50C.

What were the issues?

Whether a penalty under section 271(1)(c) can be sustained when the underlying addition has been deleted. The validity of a penalty imposed on a basis that no longer exists.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 50C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: SHRI SAKTIJIT DEYAND SHRI RAJESH KUMAR

For Appellant: Shri N.S. Virani
For Respondent: Smt. Jothilakshmi Nayak

Date of Hearing – 06.01.2020 Date of Order – 15.01.2020

O R D E R PER SAKTIJIT DEY. J.M.

The captioned appeal has been filed by the assessee challenging the order dated 28th May 2018, passed by the learned Commissioner of Income Tax (Appeals)–32, Mumbai, pertaining to the assessment year 2005–06.

2.

We have heard the parties. The leaned Counsel for the assessee submitted that penalty under section 271(1)(c) of the Act was imposed

2 Shri Mohd. Raza Akbarali Ghugaria on the basis of addition made towards long term capital gain computed by applying the provisions of section 50C of the Act. He submitted, while deciding assessee’s appeal arising out of quantum proceedings, the Tribunal in ITA no.8111/Mum./2011, dated 1st July 2016, has deleted the addition made by the Assessing Officer and accepted the assessee’s computation of long term capital gain at nil. Thus, he submitted, since the addition has been deleted, the penalty imposed under section 271(1)(c) of the Act cannot survive.

3.

The learned Departmental Representative fairly accepted the aforesaid factual position.

4.

Having considered rival submissions, we are of the view that the penalty imposed under section 271(1)(c) of the Act is no more sustainable in view of the fact that the addition on the basis of which the penalty has been imposed stands deleted by the Tribunal while deciding assessee’s appeal as referred to above. Accordingly, we delete the penalty imposed of ` 3,56,790, under section 271(1)(c).

5.

In the result, appeal stands allowed. Order pronounced in the open Court on 15.01.2020

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