ACIT, NEW DELHI vs. M/S. RITES LTD., GURGAON

This appeal by the Revenue for the assessment year 2009-10 is directed against the order of learned CIT(A)-36, New Delhi dated 2nd September, 2016.

The only ground raised by the Revenue in this appeal is against the deletion of penalty of `72,37,100/- which was levied by the Assessing Officer u/s 271(1)(c) of the Income-tax Act, 1961.

At the time of hearing before us, it was pointed out by the learned counsel that the penalty has been levied in respect of two additions – (i) the addition of `2,01,66,000/- on account of interest income and (ii) disallowance u/s 14A amounting to `11,25,844/-. That in quantum appeal, the ITAT, vide order dated 24th April, 2017 in & 3026/Del/2014, deleted both the additions. A 2 ITA-6255/Del/2016 copy of the said order was placed on record. He, therefore, prayed that the penalty may also be deleted.

Learned Senior DR relied upon the order of the Assessing Officer.

We have carefully considered the submissions of both the sides and perused the material placed before us. Since the additions itself have been deleted by the ITAT, the penalty based upon such additions cannot survive. We, therefore, cancel the penalty levied u/s 271(1)(c) of the Act.

In the result, the appeal of the Revenue is dismissed. Decision pronounced in the open Court on 26.12.2017.