THE ITO, WARD-6(1), AHMEDABAD vs. M/S. RADHESHYAM FIBRES, AHMEDABAD

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ITA 527/AHD/2014Status: DisposedITAT Ahmedabad09 October 2017AY 2009-103 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 noted that a Co-ordinate Bench had previously deleted the quantum addition on which the penalty was based. Therefore, the penalty became infructuous.

What were the facts?

The Assessing Officer levied a penalty for concealing income based on an addition of Rs. 60,70,000/- under Section 2(22)(e) of the Act. The CIT(A) had deleted this penalty.

What were the issues?

Whether the penalty for concealment of income is sustainable when the underlying addition has been deleted. The applicability of Section 2(22)(e) for deemed dividend.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 2(22)(e),Section 143(3)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH

Before: Shri S. S. Godara & Shri Amarjit Singh

For Respondent: Shri Parsoon Kabra, Sr. D.R

आदेश/ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-

This Revenue’s appeal for A.Y. 2009-10, arises from order of the CIT(A)-XI, Ahmedabad dated 27-06-2012 , in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”.

2.

The revenue has raised following grounds of appeal:-

I.T.A No. 527/Ahd/2014 A.Y. 2009-10 Page No 2 ITO vs. M/s. Radheshyam Fibres

“i) The Id. CIT(A) has erred in law and on facts in deleting the penalty of Rs.20,63,- 193/- imposed u/s.271(1)(c) of the Act. ii) The Id. CIT(A) has further erred in Ijaw and on facts in relying on the decision in the case of C1T Vs. Eiarotia Tin works(221 ITR 661(GUJ) wherein a totally different set of facts was considered and was quite distinguishable with the facts of the Assessee's case. iii) On the facts and circumstances of the case, the Ld. Commissioner of Income tax (A) ought to have upheld the order imposing of the penalty passed by the Assessing Officer. iv) It is, therefore, prayed that the order of the Ld. Commissioner of Income tax (A.) may be set-aside and that of the Assessing Officer be restored.” 3. Brief facts of this case is that the assessing officer has levied a penalty of Rs. 20,63,193/- for concealing the particulars of income based on addition of Rs. 60,70,000/- under the provisions of section 2(22)(e) of the act as deemed dividend which was made in the assessment order passed u/s 143(3) of the act for the year under consideration in the case of the assessee.

4.

We have heard the rival contentions of both the sides. During the course of appellate proceedings, it was brought to our notice that the Co-ordinate Bench of the ITAT Ahmedabad vide ITA No. 1901/Ahd/2012 dated 11/08/2016 has deleted the quantum addition on the basis of which impugned penalty was levied. The relevant part of the findings of the Co-ordinate Bench is reproduced as under:- “4.2. In the present case, it is an undisputed fact that the assessee is not a registered shareholder of M/s. Shree Vallabhalaxmi Cotton Pvt. Ltd. In view of the aforesaid facts and following the aforesaid decision of Special Bench of Tribunal, we are of the view that no addition could be made u/s.2(22)(e) of the Act to the present case. We therefore set aside the order of the Id.CIT(A) and delete the addition made u/s.2(22)(e) of the Act.” The ld. departmental representative could not controvert these facts. After considering the findings of the Co-ordinate Bench as above, the

I.T.A No. 527/Ahd/2014 A.Y. 2009-10 Page No 3 ITO vs. M/s. Radheshyam Fibres

penalty levied in this case has become infructuous, therefore, the appeal of the revenue is rejected.

5.

In the result, the appeal of the Revenue is dismissed.

Order pronounced in the open court on 09-10-2017

Sd/- Sd/- (S.S. GODARA) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated 09/10/2017 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद

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