SAGA DEVELOPERS PVT. LTD.,NEW DELHI vs. DCIT, NEW DELHI

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ITA 3565/DEL/2017Status: DisposedITAT Delhi09 November 2023AY 2007-08Bench: SHRI G. S. PANNU, HON’BLE VICE-PRESIDENT A N D SHRI CHALLA NAGENDRA PRASAD (Judicial Member)5 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the additions on which the penalty was levied have been deleted by a prior Tribunal order, the penalty cannot stand. Therefore, the penalty order is quashed.

What were the facts?

The assessee's appeal was against a penalty levied under Section 271(1)(c). The penalty was based on additions made during assessment, including disallowances for negative balance and deemed dividend.

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the underlying additions have been deleted. The validity of additions made under Section 153A and related disallowances.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 153A,Section 40A(3),Section 2(22)(e)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, [ DELHI BENCH “G” : DELHI ]

Before: SHRI G. S. PANNU, HON’BLE VICE-SHRI CHALLA NAGENDRA PRASAD

For Respondent: Shri H. K. Choudhary
Hearing: 02/11/2023

आदेश / O R D E R PER C. N. PRASAD, J. M. :

1.

This appeal is filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)-27 [hereinafter referred 1 to CIT (Appeals)] New Delhi, dated 30.03.2017 for assessment year 2007-08 in sustaining the penalty levied under section 271(1)(c) of the Income Tax Act, 1961 (the Act).

2.

At the outset, the ld. Counsel for the assessee submits that the addition made while completing the assessment under section 153A of the Act based on which penalty under section 271(1)(c) was levied has been deleted by the Tribunal in dated 13.10.2023 and, therefore, since the quantum additions have been deleted by the Tribunal, it is the prayer of the assessee that the penalty be deleted. 3. The ld. DR fairly agreed with the submissions. 4. Heard rival submissions perused the orders of the authorities below and the order of the Tribunal in quantum proceedings. On perusal of the record before us it is noticed that penalty under section 271(1)(c) of the Act was levied on the following additions:- (i) Disallowance under section 40A(3) Rs. 4,07,600/- (ii) Disallowance for negative balance Rs. 4,75,075/- (iii) Deemed dividend under section 2(22)(e) Rs.29,06,914/-

5.

The assessee filed appeal against the order of the Assessing Officer imposing penalty under section 271(1)(c) of the Act on the above additions. The ld. CIT (Appeals) deleted the penalty in so far as the disallowance under section 40A(3) to Rs.4,07,600/- is concerned and sustained the penalty on the disallowance of negative cash balance and deemed dividend under section 2 2(22)(e) of the Act of Rs.4,75,075/- and Rs.29,06,914/- respectively. We observe that the Tribunal by order dated 13.10.2023 in deleted the addition/disallowance made towards negative cash balance of Rs.4,75,075/- and deemed dividend of Rs.29,06,914/- in the absence of any incriminatory documents in the course of search following the decision of the Hon’ble Supreme Court in the case of PCIT Vs. Abhisar Buildwell (P.) Ltd. [(2023) 149 taxmann.com 399 (SC)]. Therefore since the additions have been deleted by the Tribunal, the penalty levied on the basis of such additions has no legs to stand. Thus, we quash the penalty order passed under section 271(1)(c) of the Act.

6.

In the result, appeal of the assessee is allowed. Order pronounced in the open court on : 09/11/2023.

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