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Facts
The Revenue appealed against the CIT(A)'s deletion of penalty imposed under section 271(1)(c) for Assessment Years 2013-14 and 2014-15. The original penalty was levied by the AO on additions made under sections 68 and 69C, treating long-term capital gains from the sale of shares as bogus and accommodation entries.
Held
The Tribunal observed that the underlying quantum additions, which formed the basis for the penalty, had already been deleted by the Tribunal in separate quantum proceedings. Since the very additions relating to bogus long-term capital gains and accommodation entries were set aside, the penalty imposed on these additions could not be legally sustained. Consequently, the CIT(A)'s decision to delete the penalty was upheld.
Key Issues
Whether penalty under section 271(1)(c) is sustainable once the underlying quantum additions, on which the penalty was imposed, have been deleted by the appellate authorities.
Sections Cited
271(1)(c), 68, 69C
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आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeals have been filed by the Revenue against order dated 03/04/2024 and 24/11/2023 passed by ld. CIT(A)-51, Mumbai in relation to the penalty proceedings u/s.271(1)(c) for the A.Y.2013-14 and 2014-15.
2 & 2998/Mum/2024 Vineet Mittal 2. In both the appeals Revenue is aggrieved by deletion of penalty of Rs.54,71,505/- for A.Y.2013-14 and Rs.4,27,05,000/- for the A.Y.2014-15. The penalty has been levied on addition made by the ld. AO of Rs.1,71,91,404/-and Rs.12,19,73,443/- for A.Y.2013-14 and 2014-15 respectively which was made u/s.68 by treating long term capital gain on sale of shares of Turbotech Engineering Ltd., as bogus. Ld. CIT (A) has deleted the addition on the ground that Tribunal in the quantum proceedings vide order dated 25/01/2024 has deleted the addition and this quantum has been deleted. The penalty u/s.271 (1)(c) cannot be upheld.
The only ground raised
by the Revenue before us is that department has not accepted the decision of the Tribunal with respect to the quantum appeal and has preferred further appeal before the Hon’ble High Court.
4. Since the addition on which penalty has been levied by the ld. AO has been deleted by the Tribunal, both u/s.68 on account of bogus long term capital gain and national commission for taking such accommodation entry of LTCG added u/s.69C has been deleted, therefore, penalty levied on such additions now has no legs to stand. Accordingly, ld. CIT (A) has rightly deleted the penalty for both the assessment years. Accordingly, both the appeals of the Revenue are dismissed.
Order pronounced on 25th July, 2024.