RAMESH SUMERMAL SHAH,MUMBAI vs. DCIT CEN CIR 36, MUMBAI

Learned counsel appearing for the assessee submitted that the Assessing Officer levied penalty on the disallowance of exemption claimed u/s. 54F of the Act and also on assessment of gift of ` 2.25 crores received by the assessee u/s. 68 of the Act. The learned CIT(A) deleted the penalty levied on withdrawal of deduction u/s. 54F of the Act and confirmed the penalty levied on the assessment of gift received referred above. Learned Counsel submitted that the assessee has challenged the assessment of gift as unexplained cash credit u/s. 68 of the Act by filing appeal before the Tribunal. She submitted that the Tribunal has decided the issue in favour of the assessee, vide its order dated 28.11.2016 passed in wherein the Tribunal deleted the addition of ` 2.25 crores made by the Assessing Officer u/s. 68 of 2 Shri Ramesh Sumermal Shah the Act on the ground that the Assessing Officer has no jurisdiction u/s. 153A of the Act to assess the gift u/s. 68 of the Act. Accordingly, learned AR submitted that the impugned penalty will not survive in the facts stated above.

Learned Departmental Representative did not contradict the factual aspects presented by learned AR.

Having heard the rival submissions, we agree with the submissions made by learned AR that the impugned penalty on the cash credit addition will not survive, since the addition on which the penalty was levied has been deleted by the Tribunal. Accordingly, we set aside the order passed by the learned CIT(A) on this issue and direct the Assessing Officer to delete the penalty levied on the cash credit referred above.

In the result, appeal filed by the assessee is allowed. Order has been pronounced in the Court on 11.1.2017.