M/S. PHENIL SUGARS LTD.,DELHI vs. DCIT, NEW DELHI

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ITA 3321/DEL/2015Status: DisposedITAT Delhi07 August 2018AY 2007-082 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 in the quantum proceedings by the Tribunal itself, the penalty could not be sustained.

What were the facts?

The assessee is aggrieved by a penalty levied under section 271(1)(c) on account of notional interest and advances made to suppliers. The penalty was based on an addition made in the assessment proceedings.

What were the issues?

Whether penalty under section 271(1)(c) can be sustained when the addition forming the basis of the penalty has been deleted in quantum appeal.

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 “D” NEW DELHI

Before: SHRI AMIT SHUKLA & SHRI PRASHANT MAHARISHI

For Appellant: Shri KVSR Krishna, CA & Shri
For Respondent: Shri Amit Jain, Sr.D.R

PER AMIT SHUKLA, J.M.: The aforesaid appeal has been filed by the assessee against the impugned order dated 13.03.2015, passed by Ld. CIT (Appeals)-IV, New Delhi in relation to penalty proceedings u/s.271(1)(c) for the Assessment Year 2007-08. The assessee is mainly aggrieved by levy of penalty at Rs.11,42,006/- on account of addition made as notional interest and advances made to the suppliers.

2.

At the outset, ld. counsel for the assessee submitted that in the quantum proceedings the Tribunal vide order dated 16.06.2016 in has deleted the disallowance of interest made by the Assessing Officer and hence penalty levied on such interest cannot be sustained.

3.

Learned Department Representative too admitted that in the quantum proceedings the addition which is subject matter of penalty has been deleted.

4.

In view of the aforesaid facts that in the quantum proceedings, the Tribunal has deleted the disallowance on account of interest of Rs.33,92,769/-,therefore, the levy of penalty on such disallowance has no legs to stand and the same is hereby deleted.

5.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open Court on 7th August, 2018.

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