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M/s. N. H. Securities Ltd.,Bhupen Chambers, Ground Floor, 9, Dalal Street, Fort, Mumbai 400023 Vs. Assistant Commissioner of Income Tax, Central Circle 40, Mumbai
November, 16th 2015
                       ,"" ,  

    IN THE INCOME TAX APPELLATE TRIBUNAL "D" BENCH, MUMBAI

                            . .  ,    
                          ,    ,  

          BEFORE S/SHRI B.R.BASKARAN, ACCOUNTANT MEMBER

                  AND AMARJIT SINGH, JUDICIAL MEMBER

                         / I.T.A. No.3190/M/12
                    (   / Assessment Year: 2004-05)

  M/s. N. H. Securities Ltd.,        /       Assistant Commissioner of
  Bhupen Chambers, Ground                    Income Tax, Central Circle
                                      Vs.
  Floor, 9, Dalal Street, Fort,              40, Mumbai
  Mumbai 400023

       . /   . / PAN/GIR No. : AAACS7140Q

       ( /Appellant)                 ..           (    / Respondent)



      Assessee by:                          Shri. Rajiv Khandelwal
      Department by:                        Dr. P. Daniel

                        / Date of Hearing: 31.08.2015
                   
                   /Date of Pronouncement:            06.11.2015

                                 / O R D E R

PER AMARJIT SINGH, JM:

      The appeal in ITA No.3190/Mum/2012 for the assessment year 2004-05
has been filed by the assessee against the order dated 17.02.2012 of the learned
Commissioner of Income Tax (Appeals)-36, Mumbai [hereinafter referred to as
the learned "CIT(A)] passed in appeal No.CIT(A)-36/AP.159/10-11. The
assessee has challenged the CIT(A)'s order on the following grounds of appeal:-
                                                                         ITA No.3190/M/12
                                                                   Assessment Year: 2004-05

             "1.     The Commissioner of Income-tax (Appeals) - 36 , Mumbai (hereinafter
             referred to as the CIT(A)) erred in upholding the action of the Assistant
             Commissioner of Income-tax, Central Circle 40, Mumbai (hereinafter referred
             to as the Assessing Officer) in levying penalty of Rs.2,75,000 under section
             271(1)(c) of the Act.

             The appellants contend that on the facts and in the circumstances of the case
             and in law, the CIT(A) ought not to have confirmed the levy of the impugned
             penalty under section 271(1)(c) of the Act.

             2.      The CIT(A) erred in upholding the action of the Assessing Officer in
             levying penalty on the basis of income-tax, including surcharge.

             The appellants contend that surcharge on income-tax cannot be considered in
             levying the penalty as the same is not part of "tax".

             3.     The appellants contend that the impugned order of penalty is bad in
             law and requires to be quashed.




2.    The facts of the case are that the AO disallowed certain amount on
account of share trading loss in the assessment u/s. 143(3) and this disallowance
was confirmed by the CIT(A). Subsequently, the AO issued show cause for
levy of penalty u/s. 271(1)(c) of the Income Tax Act, 1961. The appellant did
not reply to the notice, therefore the AO levied the penalty as the appellant had
concealed the particulars of his income and there was absence of material to
rebut the presumption raised by Explanation 1 to section 271(1)(c). The AO
levied the penalty @ 100% of the tax sought to be evaded. At the very outset
the counsel of the assessee has argued that the quantum order which has been
confirmed by the CIT(A) has been set aside and remanded by the Tribunal vide
order dated 02.08.2013, therefore, in the said circumstances the penalty order
does not survive in the eyes of law in view of the law settled in the case of CIT
Vs. Kelvinator of India Ltd. (2010) 187 Taxman 312(SC), Garware Wall Ropes
Limited Vs. Addl.CIT, dated 15.01.2014 in ITA 5408/M/12 & M/s. J. M.
Financial Limited Vs. Addl. CIT 4(3), Mumbai dated 26.03.2014 in ITA No.
4521/M/12.




                                                                                            2
                                                                  ITA No.3190/M/12
                                                            Assessment Year: 2004-05

3.    On the other hand the learned Departmental representative (DR) no doubt
strongly supported the judgement of CIT(A) under challenge but nowhere
produce any distinguished facts on record. In the light of above said submission
and record, we observed that the order of quantum on the basis of which the
penalty has been levied as already been set aside by the Tribunal in ITA
2784/M/08 A.Y. 2003-04 & ITA 2785/M/08 A.Y. 2004-05, Mumbai vide order
dated 02.08.2013. Since the quantum order dated 12.08.2013 is nowhere in
existence, therefore, in the said circumstance the penalty order under challenged
does not survive in the eyes of law.




4.    In this regard we also find support of law settled in case of       CIT Vs.
Kelvinator of India Ltd. (2010) 187 Taxman 312, (SC), Garware Wall Ropes
Limited Vs. Addl.CIT, dated 15.01.2014 in ITA 5408/M/12 & M/s. J. M.
Financial Limited Vs. Addl. CIT 4(3), Mumbai dated 26.03.2014 in ITA No.
4521/M/12. Therefore, we set aside the order dated 17.02.2012 passed by
CIT(A) under challenged as the penalty is not leviable under law.

5.    In the result, the appeal of the assessee is hereby allowed accordingly.

     Order pronounced in the open court at the time of hearing on 6th
November, 2015
                     Sd/-                                    Sd/-
       (B.R.BASKARAN)                            (AMARJIT SINGH)
         / ACCOUNTANT MEMBER                      /JUDICIAL MEMBER


 Mumbai;  Dated : 6th November, 2015

MP




                                                                                  3
                                                          ITA No.3190/M/12
                                                    Assessment Year: 2004-05




             /Copy of the Order forwarded to :

1.    / The Appellant

2.     / The Respondent.

3.     () / The CIT(A)-

4.      / CIT

5.            ,     ,  / DR, ITAT, Mumbai

6.     / Guard file.

                                                         / BY ORDER,

                        //True Copy//

                                            /           (Dy./Asstt. Registrar)

                                               ,  / ITAT, Mumbai




                                                                             4

 
 
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