ITO 22(2)(3), NAVI MUMBAI vs. SATYAPAL RAJPAL BAKSHI, MUMBAI

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ITA 2456/MUM/2014Status: DisposedITAT Mumbai03 November 2016AY 2007-082 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 corresponding quantum addition was deleted, the penalty levied on that amount is not sustainable. Therefore, the grounds raised by the Revenue were not sustainable.

What were the facts?

The Assessing Officer (AO) made an addition under section 2(22)(e) of Rs. 39,51,877 and levied a penalty. The CIT(A) restricted the penalty to Rs. 7,45,787, and the Tribunal later deleted a significant portion of the quantum addition.

What were the issues?

Whether penalty under Section 271(1)(c) can be levied on an amount that was subsequently deleted from the quantum addition. The extent to which penalty should be restricted when the quantum addition is partially upheld.

Which sections of the Income-tax Act were involved?

Section 2(22)(e),Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “E” BENCH, MUMBAI

Before: SHRI D. KARUNAKARA RAO & SHRI RAM LAL NEGI

For Appellant: Shri Akhilendra Yadav, DR
Hearing: 03.11.2016Pronounced: 03.11.2016

सुनवाई की तायीख / Date of Hearing : 03.11.2016 घोषणा की तायीख /Date of Pronouncement : 03.11.2016 आदेश / O R D E R

PER D. KARUNAKARA RAO, AM:

1.

This appeal filed by the Revenue on 11.4.2014 is against the order of the CIT (A)-33, Mumbai dated 29.1.2014 for the assessment year 2007-2008. In this appeal, Revenue raised the following grounds which read as under:- “1. On the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in directing the AO to restrict the penalty on the deemed dividend to the amount of Rs. 7,45,787/- as against the addition u/s 2(22)(e) made by the AO of Rs. 39,51,877/-.

2. On the facts and in the circumstances of the case and in law, the Ld CIT (A) erred in holding that for levying of penalty, closing credit balance of Rs. 7,45,787/- as on 30.3.2007 should only be taken as deemed dividend without appreciating the fact that every transaction of loans made by M/s. Talpasya Engg. Works Pvt Ltd has to be taken as deemed dividend under the provisions of section 2(22)(e) of the Act.”

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