ASST CIT 2(2)(2), MUMBAI vs. MILTON PLASTICS LTD, MUMBAI

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ITA 3650/MUM/2015Status: DisposedITAT Mumbai01 November 2017AY 2008-093 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 since the addition on which the penalty was levied had already been deleted by the Tribunal in the quantum appeal, the penalty itself did not survive. Therefore, the cancellation of the penalty by the CIT(A) was upheld.

What were the facts?

The Revenue appealed against the cancellation of penalty levied under Section 271(1)(c). The penalty was related to an addition made on account of selling goods to an associate concern at a discount.

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the underlying addition has been deleted.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “F” BENCH, MUMBAI

Before: SHRI SHAMIM YAHYA, AM & SHRI C. N. PRASAD, JM

For Appellant: Shri T. A. Khan, Shri Alpesh Paragbhai Lad
For Respondent: Shri Alpesh Paragbhai Lad

सुनवाई क� तार�ख / : 18.10.2017 Date of Hearing घोषणा क� तार�ख / : 01.11.2017 Date of Pronouncement आदेश / O R D E R Per Shamim Yahya, A. M.: This appeal by the Revenue is directed against the order of learned CIT(A)-5, Mumbai dated 31.03.2015 and pertains to assessment year 2008-09.

2.

The grounds of appeal

read as under:

1. On the facts and in the circumstances of the case and in law the ld. CIT(A) erred in cancelling the penalty levied u/s. 271(1)(c), without appreciating that assessee had made 78% of its sales to associates concerns at (A.Y. 2008-09) Asst. CIT vs. M/s. Milton Plastics Ltd. a discount of 12% with sole motive of evading payment of tax particularly because the associate concern was eligible for deduction u/s. 80-IB of the Act.

2. On the facts and in the circumstances of the case and in law the ld. CIT(A) erred in cancelling the penalty levied u/s. 271(1)(c), without appreciating the fact that the quantum addition on account of selling goods to its associates concern at a discount of 12% had been upheld by the ld. CIT(A).

3. At the outset, in this case the learned counsel of the assessee submitted that this is an appeal relating to levy of penalty u/s. 271(1)(c) of Rs.1,74,44,453 with reference to addition of Rs.5,68,14,843/- on account of the difference in price charged from sister concern. The learned counsel submitted that the quantum appeal with reference to which this penalty has been levied has already been decided in favour of the assessee by this tribunal in dated 01.09.2017.

4. Hence, the learned counsel pleaded that since the addition has already been deleted, the penalty levied does not survive.

5. Per Contra, the learned departmental representative accepted that the addition with reference to which this penalty has been levied has already been deleted by this tribunal, as above.

6. Accordingly, after careful consideration, we find that since the addition with reference to which this penalty u/s. 271(1)(c) has been levied and has already been deleted by the tribunal. The penalty levied with reference to the above addition also doesn't survive. Hence, the deletion of the penalty by the ld. CIT(A) is upheld.

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