ASST CIT CC 47, MUMBAI vs. ASHOK APPARELS P.LTD, MUMBAI

PDF · subscribers
ITA 6399/MUM/2014Status: DisposedITAT Mumbai15 December 2016AY 2005-063 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 upheld the CIT(A)'s order deleting the penalty. Since the disallowance of the impugned loss was already deleted by the Tribunal in the quantum appeals, there was no basis for continuing with the penalty.

What were the facts?

The Revenue appealed against the deletion of penalties levied under Section 271(1)(c) for assessment years 2004-05 and 2005-06. The penalties were related to the disallowance of losses incurred on derivative transactions, which the AO treated as speculative.

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the underlying disallowance leading to the penalty has been deleted in the quantum appeal.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 43(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES “A”, MUMBAI

Before: SHRI MAHAVIR SINGH & SHRI ASHWANI TANEJA

For Appellant: Shri M.V. Rajguru
For Respondent: Shri Sholka Shah

Date of hearing : 07-12-2016 Date of order : 15 -12-2016

O R D E R Per ASHWANI TANEJA, AM: These appeals have been filed against the common order passed by the Commissioner of Income-tax (Appeals)-38, Mumbai [in short, CIT(A)] dated 25-07-2014 against the penalty orders passed by the AO u/s 271(1)(c) for the assessment years 2004-05 and 2005-06, on the following common grounds of appeal:- “1. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the penalty levied by the AO. The Hon'ble Bombay High Court held that the losses incurred on derivative transaction to be treated as speculative losses in terms of Section 43(5) of the Income Tax Act. "

2 & 6399/Mum/2014 2. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the penalty levied by the AO as by claiming a loss, which is not otherwise allowable to be set off against regular business income, the assessee has submitted inaccurate particulars of income for purpose of tax evasion."

2.

It is noted that in both the appeals penalty was levied on disallowance of loss incurred on derivative transaction by treating the same as speculative losses in terms of section 43(5) of the Act. On appeal, the Ld. CIT(A) deleted the penalty.

3.

During the course of hearing, it was brought to our notice by the Ld. Counsel of the assessee that in the quantum appeal, the disallowance has been deleted by the Tribunal vide its order dated 26-07-2013 in -6938/Mum/2011. The Ld. DR did not dispute the submission of the assessee. 4. We have gone through the orders passed by lower authorities as well as the order of the Tribunal passed in quantum appeals. It is noted from the order of the Tribunal that the disallowance made by the AO of the impugned loss has been deleted by the Tribunal. Under these circumstances, no basis survives to continue with the penalty since penalty was levied only on the impugned loss. Thus, order of Ld CIT(A) in deleting the penalty in both the assessment years is hereby upheld. 5. In the result, appeals filed by the Revenue are dismissed. Order was pronounced in the open court at the conclusion of the hearing.

More judgments on Section 271(1)(c)

All 25,141 judgments and leading authorities on Section 271(1)(c) →

Recent GST High Court judgments

Search GST case law →