DCIT, NEW DELHI vs. M/S. SV LIQUOR (INDIA) LTD., NEW DELHI

The Ld. CIT(A) has erred on facts and in law in cancelling the penalty of Rs. 17,93,750/- imposed by the AO u/s. 271(1)(c) of the I.T. Act, 1961.

In other 05 Appeals, identical issues are involved and similar grounds have been raised, the only difference is in the figures involved.

The brief facts of the case are that a search u/s 132(1) of the Income Tax Act, 1961 (hereinafter referred as the Act) was conducted on 14-10-2008 in S.V.P. Group during which the office premises of SVP. Builders India Ltd. & Associates Company & Residential premises of the Directors & their relatives were covered. The SVP Group of companies was engaged in the business of construction of residential, commercial and business complexes alongwith sale / purchase of lands. AO observed that the group had been charging on money on the sale of flats, shops etc. which was not accounted for in the regular books of accounts. Usually this on-money was taken in cash which in turn was routed back into the group of companies in the form of share application/unsecured loans, share capital etc. The unaccounted money routed through this channel was reinvested in the purchase of further lands and for new projects. The share application money received in cash was also utilized for booking bogus expenses as site development charges for inflating the cost of construction to bring down its profits. Accordingly, notice u/s 153A of the Act was issued to the assessee on 14-05-2010 after duly recording satisfaction. In response thereto return of income was filed on 04-06-2010 showing taxable income at Rs.1,78,720/-. The assessment order u/s 153A(b) of the Act read with section 143(3) of the IT Act was passed on 30-12-2010 after making certain additions/disallowances and penalty proceedings u/s 271(1)(c) of the Act were initiated. Since the assessee could not prove that it has not concealed the true particulars of its income to the extent of Rs.50,00,000/- with a view to evade 3 taxes, penalty order u/s. 271(1)(c) of the Act was passed levying a penalty of Rs. 17,93,750/- vide order dated 24-3- 2014. Against the penalty order dated 24.3.2014, the assessee appealed before the Ld. CIT(A), who vide his impugned order dated 18.7.2014 has deleted the penalty in dispute by allowing the appeal of the assessee. Aggrieved with the impugned order, the Revenue is in appeal before the Tribunal.

Ld. DR relied upon the order of the AO.

On the other hand, Ld. A.R. of the Assessee relied upon the order of the Ld. CIT(A) and has stated that Ld. CIT(A) has passed a well reasoned order which does not need any interference. Further, Ld. A.R. of the Assessee stated that quantum on which the penalty has been imposed, has already been deleted by the ITAT vide its order dated 29.4.2014. He has filed the copy of the said Tribunal’s order dated 29.4.2014.

We have carefully considered the submissions and perused the records especially the impugned order. We find considerable cogency in the assessee’s A.R. submissions that the quantum on which the penalty has been imposed, has already been deleted by the ITAT vide its order dated 29.4.2014. We further find that against the Tribunal’s order dated 29.4.2014, the Department went in appeal before the Hon’ble Delhi High Court and the Hon’ble Delhi High Court vide its order dated 15.12.2015 has dismissed the Appeal of the Department. Therefore, in view of the facts penalty u/s. 271(1)(c) imposed by the AO in all the 06 years, has been rightly cancelled by the Ld. CIT(A) his vide impugned order dated 18.7.2014 vide para no. 6(i) of his order dated 18.7.2014. The relevant portion of para 6(i) are reproduced as under:-

Keeping in view of the facts and circumstances of the case, we do not find any infirmity in the order of the Ld. CIT(A), hence, we uphold the same and reject the grounds raised by the Revenue by dismissing the Appeal filed by the Revenue.

As regards the other 05 appeals are concerned, following the consistent view as taken in ITA 5319/Del/2014 (AY 2004- 05), as aforesaid, we uphold the order of the Ld. CIT(A) on the issue of deletion of addition in dispute in other 05 Appeals being 5321, 5322, 5323 & 5330/Del/2014 (Ayrs. 2005-06 to 2009-10) and reject the grounds raised

In the result, all the 06 appeals filed by the Revenue stand dismissed.