DCIT, NEW DELHI vs. M/S. VIPUL LTD., GURGAON

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ITA 5103/DEL/2014Status: DisposedITAT Delhi04 January 2018AY 2009-104 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee made a bona fide claim based on a reasonable interpretation of law, and the quantum addition itself was deleted by a coordinate bench. Therefore, the penalty did not survive.

What were the facts?

The Revenue appealed against the deletion of penalty levied under Section 271(1)(c) by the Assessing Officer (AO). The penalty was related to disallowance of expenses under Section 14A read with Rule 8D.

What were the issues?

Whether penalty under Section 271(1)(c) can be levied when the quantum addition, on which the penalty was based, has been deleted by a higher authority and the claim was bona fide.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 14A

AI-generated summary — verify with the full judgment below

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

Before: SHRI G.D. AGRAWAL, HON’BLE & SHRI K.N. CHARY

For Appellant: Shri Rajesh Arora, CA
For Respondent: Smt. Ritu Sharma, Sr. DR
Hearing: 03.01.2018Pronounced: 04.01.2018

ORDER PER K. NARSIMHA CHARRY, J.M. This is an appeal by the revenue challenging the order dated 07.07.2014 in appeal no. 354/13-14 passed by the Ld. Commissioner of Income Tax (Appeals)-XXI, New Delhi (for short called “ld. CIT(A)”), revenue preferred this appeal on the following grounds :-

On the facts and in the circumstances of the case, Ld. CIT(A) erred in deleting penalty amounting to Rs. 10,51,083/- made by the AO u/s 271(1)(c) of the I.T.Act,1961.

2. The levy of penalty involved in this matter was in respect of the addition made by the ld. AO by disallowing the expenses and invoking the provisions u/s 14A of the Act r. w. rule 8D of the Income Tax Appeal Rules, 1962. Ld. CIT(A) in appeal deleted the same holding that this is a case of a bona fide claim based on a reasonable interpretation of law, but not acceptable to the ld. AO, as such while following the decision reported in CIT v Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158 (SC), he deleted the penalty. Today when the matter is called, Ld. AR produced the copy of order dated 14.7.2016 in and 4397/Del/2013, the appeals preferred by the assessee against the quantum addition. He submitted that by a way of this order a coordinate Bench of this Tribunal deleted the quantum addition.

3. On a careful consideration of a matter, we find that as rightly pointed out by the ld. CIT(A), this is not a case of any concealment of income or furnishing of inaccurate particulars of income, but a claim preferred by the assessee was not found favour with ld. AO. The decision in Reliance Petroproducts (P) Ltd.(supra) is applicable to the facts of the case. Further the quantum is deleted by a co-ordinate bench of this Tribunal in appeal as such penalty does not survive. Viewing from any angle the penalty does not survive. Hence, we confirm the findings of the ld. CIT(A).

4.

In the result appeal of the revenue is dismissed.

Order pronounced in the open court on 04 January, 2018.

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