Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH “F” NEW DELHI
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F” NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI C.M. GARG: JUDICIAL MEMBER Asstt. Yr: 2007-08 M/s Rajshree Steels Pvt. Ltd., Vs. Income-tax Officer, (Now known as Rajshree Infratech Ward-15(2), New Delhi. (P) Ltd.), 17, Meera Tower (First Floor) Wazirpur Industrial area, Delhi-110052. PAN: AAACR 4386 D ( Appellant ) (Respondent) Appellant by : Shri Adhir K. Samal CA Respondent by : Ms. Kesong Y. Sherpa Sr. DR Date of hearing : 05/05/2016. Date of order : 10/05/2016. O R D E R PER S.V. MEHROTRA, A.M:
This is assessee’s appeal assailing the order dated 14.12.2012, passed by the ld. CIT(A)-XVIII, New Delhi in appeal no. 62/12-13, for A.Y. 2007- 08, confirming the penalty levied by the AO U/s 271(1)(c) of the I.T. Act.
Brief facts of the case are that the assessee company in the relevant assessment year was engaged in the business of construction. During the year under consideration the assessee company had filed return of income declaring Nil income. The assessment was completed at an income of Rs. 1,18,64,960/-, inter alia, making following additions.
(i) Rs. 43,75,000/- on account of undisclosed consideration of properties (land); and (ii) Rs. 93,50,000/- on account of unverified share application money/ premium
The AO also initiated penalty proceedings u/s 271(1)(c) for concealment or furnishing of inaccurate particulars of income in respect of above two issues and vide penalty order dated 31.3.2012imposed penalty of Rs. 45,29,250/- u/s 271(1)(c) of the Act. In appeal the ld. CIT(A) confirmed the action of the AO. Aggrieved, the assessee is in appeal before us and has raised following grounds of appeal:
“1. That the Ld. CIT (A) has erred in law while sustaining the penalty amounting to Rs. 45,29,250/-, levied by the Ld. AO under section 271(1)(c) of the Income Tax Act, 1961. The penalty so sustained by the Ld CIT (A) is bad in law and may please be deleted.
2. That the Ld. CIT (A) has erred in law while confirming the levy & imposition of penalty u/s 271(1)(c) in respect of addition of Rs. 43,75,000/- made u/s 50C of the Income Tax Act, 1961, while overlooking the fact that the property sold was held as stock-in-trade, and as such proportionate penalty of Rs. 14,43,750/- (Rs. 43,75,000* 45,29,250/ 1,37,25,000) so confirmed by the Ld CIT (A) in respect of addition of Rs. 43,75,000 may please be deleted.
3. That the Ld CIT (A) has erred in law while confirming the penalty u/s 271(1)(c) in respect of addition of Rs. 93,50,000/- under section 68 of the Income Tax Act, 1961 treating the share application money as unexplained and as such proportionate penalty of Rs. 30,85,500/- (93,50,000*45,29,250/ 1,37,25,000) so confirmed by the Ld CIT (A) in respect of addition of Rs. 93,50,000 may please be deleted.
4. That the Ld CIT (A) has erred in law while passing the penalty order u/s 271(1)(c) dated 30.01.2013, where assessee preferred an appeal against the order of first appellate authority on quantum dated 14.12.2012 before Hon’ble Income Tax Appellate Tribunal vide acknowledgement dated 29.01.2013, and as such passing the appellate order u/s 250 read S. 271(1)(c) dated 30.01.2013, pending the quantum appeal before Hon'ble ITAT is bad in law may please be nullified. 5. That we crave to add, alter, delete, modify or withdraw any of the above grounds at the time of hearing.
Ld. counsel for the assessee at the outset submitted that in quantum appeal the ITAT Delhi Bench ‘F’ vide its order dated 19.2.2016 in qua the first addition, on account of undisclosed consideration of properties, has deleted the addition. Therefore, no penalty survives in respect of this addition. 4.1. However, qua second addition the Tribunal has restored the matter back to the file of AO, inter alia, observing as under: 8. It appears from the order of the Id.CIT(A) that the AO had issued summons u/s 133(6) of the Income-tax Act to confirm the genuineness of the share application money received by the assessee. In response to the same, the ld. AO had received the necessary details from six parties. In respect of Shri Charanjeet Kaur, Shri Manjeet Singh Sandhu and Smt. Suneet Sandhu the ld. AO did not receive any response. However, it was informed by the father of Shri Manjeet Singh Sandhu that all the three persons have left India and have not come back till date. He also filed details like bank statements, which shown the credit worthiness of all the three parties and genuineness of the payments made by them to the assessee.
At this juncture, the ld. AR submits that this issue can be sent back to the ld. AO for verification from the bank in respect of the monies held by the parties.
The ld. DR does not object the submissions made by the ld. AR. We accordingly set aside this issue to the file of the ld. AO for verification of the details to be filed by the assessee.
4.2. Ld. counsel submitted that since in quantum appeal the issue relating to addition on account of unverified share application money/ premium, has been restored to the file of AO for fresh adjudication, therefore, no penalty under section 271(1)(c) survives in respect of this addition also.
Ld. DR relied on the orders of lower revenue authorities.
We have heard rival submissions and perused the material available on record. We find that in quantum appeal the ITAT has deleted the addition of Rs. 43,75,000/-, made on account of undisclosed consideration of properties (land), inter alia, holding that provisions of section 50C were not applicable to assessee’s case. In that view of the matter, penalty levied by the AO, on this issue, has no legs to stand. 6.1. As regards the addition of Rs. 93,50,000/- on account of unverified share application money/ premium, since in quantum appeal the ITAT has restored the matter to the file of ld. AO, impugned penalty levied u/s 271(1)(c) on this issue cannot be sustained. Accordingly, order of ld. CIT(A), confirming the action of ld. AO on this issue is set aside. However, ld. AO would be free to initiate fresh penalty proceedings, in accordance with law, depending on the outcome of the issue restored to his file.
In the result, assessee’s appeal stands allowed, accordingly.
Order pronouncement in open court on 10/05/2016.