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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SRI MAHAVIR SINGH, JM AND SRI ASHWANI TANEJA, AM (A.Y:2007-08) Dy. Commissioner of Income Tax Shri. Sahebrao Sukhdeo Erstwhile DCIT-22(3) 3rd Floor, Khilari, 101, Prabhat Centre Tower No.6, Vashi Rly Stn. Vs. annexe, Sector-6, CBD Belapur, Complex, Vashi, Navi Mumbai-400614 Navi Mumbai-400703 PAN No.AAJPK7584J .. Appellant Respondent Revenue by .. Vishwas Mundhe, DR .. Behzad Shahlori, AR Assessee by Date of hearing .. 13-12-2016 .. Date of pronouncement 13-12-2016 O R D E R PER MAHAVIR SINGH, JM:
This appeal by the Revenue is arising out of the order of CIT (A)-33, Mumbai in appeal No. CIT (A)-33/IT/24/12-13 dated 02-09-2013. The Assessment was framed by DCIT-22(3), Mumbai for the A.Y. 2007-08 vide order dated 29-12-2009 u/s 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’). The penalty under dispute was levied by ACIT Circle 22(3), Mumbai u/s 271 (1) (c) of the Act vide his order dated 27-03-2012.
The only issue in this appeal of Revenue is against the order of CIT(A) deleting the levy of penalty by the AO on account of addition of unexplained sundry creditors amounting to Rs. 43,46,115/-. For this Revenue has raised following ground No. 1:-
1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the penalty u/s 271(1)(c) of the IT Act of Rs. 13,29,911/- in respect of unexplained sundry creditors without appreciating the fact that the quantum addition was upheld by the CIT(A) and also the fact that the assessee failed to satisfactorily explain the sundry creditors during the course of appeals and penalty proceedings.
At the outset the learned Counsel for the assessee stated that the AO while framing assessment u/s 143(3) of the Act made addition of unexplained sundry creditors amounting to Rs.89,04,699/-. On appeal before CIT(A), he restricted the addition of unexplained creditors at Rs.43,46,115/- and the balance was deleted. The AO levied penalty on remaining addition of unexplained sundry creditors of Rs.43,46,115/- @ 100% of the tax sought to be evaded u/s 271 (1) (c) for concealing the particulars of his income. The assessee preferred appeal before CIT(A) who deleted the penalty levied by the AO.
Aggrieved, Revenue is in appeal before Tribunal. However, the learned Counsel stated that Revenue has not preferred any appeal against the deletion of quantum by CIT(A). For the remaining sustained addition by CIT(A), assessee preferred appeal before Tribunal and Tribunal deleted the entire addition in vide order dated 22- 08-2014 vide Para 8 as under: -
We have carefully perused the orders of the authorities below and the relevant documentary evidences brought on record before us. On perusal of the evidences brought before us, we find that the affidavits of the impugned parties along with their confirmations were before the lower authorities. There is no adverse findings in so far as the affidavits of the parties are concerned. The accounts are duly confirmed supported by the affidavits therefore these creditors cannot be considered as unexplained. We, accordingly set aside the findings of the Ld. CIT(A) and direct the AO to delete the addition of Rs. 43,46,115/-. Ground No. 1 is accordingly allowed.
According to learned Counsel once Tribunal has deleted the quantum addition in entirety, the penalty levied by the AO will not survive. However, the CIT(A) has also deleted the penalty on merits. The learned Sr. DR conceded the position.
After hearing both the sides and going through the facts of the case, we find that the Tribunal has deleted the quantum, the penalty will not survive and hence we confirm the order of CIT(A) deleting the penalty. This issue of Revenue’s appeal is dismissed.
In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 13-12-2016.