M/S. CAPARO MARUTI LTD.,GURGAON vs. ACIT, NEW DELHI

The brief facts of the case are that the assessee filed return of income on 29.10.2005. The case was selected for scrutiny. In the scrutiny proceedings, the Assessing Officer made certain additions. The ld. CIT(A) confirmed the additions made on account of depreciation of Rs.1,18,02,678/-, additional depreciation of Rs.57,94,549/- and fine & penalty of Rs.11,04,004/-. The Assessing Officer imposed penalty u/s. 271(1)(c) of the IT Act on the basis of ITA No. 2527/Del./2014 2 above additions. Aggrieved by penalty order, the assessee appealed before the CIT(A) and the ld. CIT(A) confirmed the penalty order. Aggrieved by this order of the ld. CIT(A), the assessee is in appeal before the Tribunal.

As regards the penalty based on depreciation of Rs.1,18,02,678/-, we find that the ITAT Bench-B, New Delhi in quantum appeal (ITA No. 1645 and 1784/Del./2011) for the A.Y. 2005-06, has already deleted this addition vide order dated 12.01.2017 and on the remaining additions on account of additional depreciation of Rs. 57,94,549/- and fine & penalty paid by assessee company to HSIDC of Rs.11,04,004/-, the matter was set aside and restored to the file of Assessing Officer for deciding the same afresh. Therefore, since the very basis of imposition of penalty stood collapsed, there remains no justification to sustain the penalty, based on the above additions at this stage. We, therefore, set aside the order of ld. CIT(A) and cancel the penalty imposed by the AO. Accordingly, the appeal of the assessee deserves to be allowed.