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Income Tax Appellate Tribunal, DELHI BENCHES: ‘C’, NEW DELHI
Before: SHRI RS SYAL & SMT. BEENA A PILLAI
ORDER
PER BEENA A PILLAI, JUDICIAL MEMBER
The present appeal has been filed by Revenue against the order dated 19.10.2016 passed by the Ld. Commissioner of Income Tax (Appeals)-4, New Delhi pertaining to the Assessment Year (A.Y.) 2008-09 on the following grounds .
1. On the facts and circumstances of the case, the Ld.CIT(A) has erred in deleting the penalty imposed amount of Rs.3,10,12,296/-.
ACIT , Circle 12(1) vs. Indiabulls Capital Services Ltd. 2. The appellant craves leave to add, alter, amend or withdraw any of the grounds of appeal at the time of hearing of appeal.”
2. Brief facts of the case are as under. During the course of assessment proceeding, it is seen that the assessee has received exempt dividend income of Rs.3,38,62,672/- in the following manner:
Sl. Name of the scrip (shares) Dividend No. Amount (In Rs.) 1. Bajaj Holdings & 2,23,57,840/- Investment Ltd. 2. Ranbaxy Laboratories 36,00,000/- Ltd. 3. Ambuja Cement Ltd 45,00,000/- 4. ICRA Ltd. 5,11,083/- 5. Nitco Tiles Ltd. 23,37,782/-
6. Reliance Liquidity Fund 5.55.967/- (Mutual Fund) Total: 3,38,62,672/- Ld.A.O computed disallowance u/s 14A read with Rule 8D amounting to Rs.9,12,39,472/-. The assessment was thereafter completed u/s 143(3) of the Act on 30/11/2010 at assessed income of Rs.96,19,98,520/- vis-a-vis the declared income at Rs.87,02,59,043/-. A.O. also initiated penalty proceedings for filing inaccurate particulars of income to the tune of Page 2 of 6 ACIT , Circle 12(1) vs. Indiabulls Capital Services Ltd. Rs.9,12,39,472/- on account of disallowance of expenses computed u/s 14A of the Act. A show cause notice u/s 271(1)(c) was issued to assessee and the penalty proceedings were concluded by imposing penalty of Rs.3,10,12,296/-.
Aggrieved by the order of Ld.AO assessee preferred appeal before Ld.CIT(A) who deleted the penalty.
Aggrieved by the order of Ld.CIT(A) Revenue preferred appeal before us now.
Ld.D.R. placed reliance on the order of Ld.A.O.
On the contrary Ld.A.R. submitted that there is no failure on behalf of assessee towards furnishing all particulars is relevant for completing the assessment. He submitted that the penalty has been levied on disallowance computed by Ld.AO of expenses under section 14 A, which were fully disclosed in the audited accounts filed along with return of income. In support of his arguments he placed reliance upon the following decisions. * CIT –II vs. Liquid Investment and Trading Co.(ITA 240/2009) * CIT vs. Reliance Petroproducts P Ltd. (SLP (C) No. 27161 of 2008) 7. We have perused the records placed before us in the light of the submissions advanced by both the sides. It is observed that penalty has been imposed upon total disallowance of expenses computed by assessing officer amounting to Rs.9,12, 39,472/- made in accordance with Rule 8D read with section 14 A of the Act. There has been no concealment or furnishing of inaccurate particulars by the assessee in this case. The disallowance has Page 3 of 6
ACIT , Circle 12(1) vs. Indiabulls Capital Services Ltd. been made by computing the sums which were duly disclosed in the return and accounts of the assessee. We find that Section 271(1)(c) postulates imposition of penalty for furnishing of inaccurate particulars and concealment of income. Hence, in our considered opinion on the facts and circumstances of this case the assessee's conduct cannot be said to be contumacious so as to warrant levy of penalty. Amongst the laws cited by Ld.A.R, we draw our support from the case of CIT vs. Liquid Investment and Trading Co., In vide order dated 05/10/10 wherein Hon’ble Delhi High Court observed as under: “Both the CIT(A) as well as the ITAT have set aside the penalty imposed by the Assessing Officer under Section 271(1)(c) of the Income Tax Act, 1961 on the ground that the issue of deduction under Section 14A of the Act was a debatable issue. We may also note that against the quantum assessment where under deduction under Section 14A of the Act was prescribed to the assessee, the assessee has preferred an appeal in this Court under Section 260A of the Act which has also been admitted and substantial question of law framed. This itself shows that the issue is debatable. For these reasons, we are of the opinion that no question of law arises in the present case. This appeal is accordingly dismissed.”
In the background of the aforesaid discussions and Precedents, we do find any infirmity in the order of the Ld. Commissioner of Income Tax (A), accordingly, we uphold the same. Accordingly grounds raised by revenue stands dismissed.
ACIT , Circle 12(1) vs. Indiabulls Capital Services Ltd. 9. In the result appeal filed by the Revenue stands dismissed. Order pronounced in the Open Court on 31st May, 2018.