DCIT 15(3)(1), MUMBAI vs. WARTSILA INDIA LTD, MUMBAI

We have heard the parties and perused the record. The Assessing Officer levied the penalty u/s. 271(1)(c) of the Act on the following disallowances made by him :- a) Provision for trading guarantee ` 1,03,34,220/- b) Professional fees ` 30,36,122/- The learned CIT(A) confirmed the addition in the appeal filed by the assessee and hence the Assessing Officer levied penalty of ` 45,00,457/- u/s. 271(1)(c) of the Act. The assessee filed the appeal before the learned CIT(A) challenging the penalty levied u/s. 271(1)(c) of the Act and the same was allowed by the learned CIT(A). Aggrieved, the Revenue has filed this appeal before us.

At the time of hearing, learned counsel appearing for the assessee submitted that it had also challenged the order passed by the learned CIT(A) in quantum proceedings confirming the above said two additions, by filing the appeal before the ITAT. The Tribunal, vide its order dated 5.6.2015 passed in has reversed the order passed by the learned CIT(A) and directed the Assessing Officer to delete the above said two disallowances. Accordingly, the assessee submitted that the additions, on which the impugned penalty was levied, no longer exist and hence, the impugned penalty is liable to be deleted.

Learned Departmental Representative did not contradict the factual aspect presented by the assessee.

Since the additions, on which the penalty was levied, have been deleted by the Tribunal by the order referred supra, we find merit in the contentions of the assessee that the impugned penalty is liable to be deleted. Accordingly, we uphold the decision of the learned CIT(A) in cancelling the impugned penalty for the reasons cited above.

Since we have dismissed the appeal of the revenue, the Cross objection filed by the assessee does not require consideration.

In the result, the appeal filed by the Revenue and the cross objection filed by the assessee are dismissed.