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Income Tax Appellate Tribunal, DELHI BENCHES “SMC” : DELHI
Before: SHRI BHAVNESH SAINI
ORDER This appeal by assessee has been directed against the Order of the Ld. CIT(A)-25, Delhi, dated 29.09.2017, for the A.Y. 2010-2011, challenging the levy of penalty under section 271(1)(c) of the I.T. Act, 1961.
Briefly, the facts of the case are that in this case assessment under section 143(3) was completed on 26.02.2013 at an income of Rs.40,46,015/- as against the returned loss of 2 ITA.No.7740/Del./2017 RRP Management Services Pvt. Ltd., New Delhi.
Rs2,41,350/-. During the course of assessment proceedings it was found that assessee has claimed loss on jobbing of Rs.8,294/-. The AO disallowed the same being of speculative nature. Further on going through the sale purchase of shares, the AO found that net result of this comes to a loss of Rs.40,26,914/-. The AO by invoking the provisions of section 73 treated it as speculative and disallowed the same. The AO further disallowed a sum of Rs.2,46,130/- u/s 14A of the Act.
The Ld. CIT(A) confirmed the additions. The A.O. vide separate order levied the penalty under section 271(1)(c) of the I.T. Act which is confirmed by the Ld. CIT(A) by dismissing the appeal of assessee.
I have heard the Learned Representatives of both the parties.
Learned Counsel for the Assessee at the outset submitted that the appeal of assessee on quantum addition have been decided by ITAT, SMC-Bench in ITA.No.5289/Del./2014 for the assessment year under appeal
3 ITA.No.7740/Del./2017 RRP Management Services Pvt. Ltd., New Delhi. i.e., 2010-2011 vide Order dated 21.03.2018. Copy of the order is placed on record. He has submitted that the Tribunal restored the addition of Rs.40,26,914/- to the A.O. with certain directions, however, the addition of Rs.2,46,130/- under section 14A have been deleted. Copy of the order is provided to the Ld. D.R. who is not disputed the same.
In this view of the matter, it is clear that one of the addition is restored to the file of A.O. and another addition have been deleted. Therefore, there is no basis left for Revenue to levy penalty against the assessee at this stage. The foundation of levy of penalty has gone at this stage. Therefore, penalty order would not survive. I, accordingly, set aside the orders of the authorities below and cancel the penalty. However, the A.O. is at liberty to take action as per Law for initiating the penalty proceedings on deciding the addition of Rs.40,26,914/- as is restored to him by the Tribunal, as per law, if so advised, in accordance with law.
In the result, appeal of Assessee is allowed.
4 ITA.No.7740/Del./2017 RRP Management Services Pvt. Ltd., New Delhi.
Order pronounced in the open Court.