IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH : F: NEW DELHI
BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER
SHRI N.K. SAINI, ACCOUNTANT MEMBER
ITA No. 4990/Del/2012
Assessment Year: 2008- 2009
M/s. Riffleberg Capital (P) Ltd. Vs. Addl. CIT,
F-217A, Sainik Farms, Circle-15(1)
New Delhi. New Delhi.
Appellant by : Dr. Rakesh Gupta, Advocate, Rishabh Kapoor, Advocate
Respondent by : Shri Vikram Sahay, Sr. DR
PER I.C. SUDHIR, JUDICIAL MEMBER
The assesee has questioned first appellate order whereby the Ld.
CIT(A) has upheld the levy of penalty of Rs. 19,87,283/- u/s 271(1)(c) of
the Income Tax Act, 1961 made by the AO.
2. We have heard and considered the arguments advanced by the parties
in view of orders of the authorities below, material available on record and
the decisions relied upon.
3. The facts in brief are that during the course of assessment proceedings
the AO noticed that assessee company had included Security Transactions
Tax (STT) of Rs. 49,90,683/- in the value of credit shares during the year.
Sale and purchase value of shares were shown under valued and over
valued by the same amount of Rs. 49,90,683/- on account of STT. The AO
was of the view that as per section 40(a)(ib) of the Income Tax Act, 1961
the STT is not an allowable expenses under the head "Income from
Business and Profession." The AO accordingly made addition of Rs.
49,90,683/- to the income of the assessee. The AO made further addition of
Rs. 54,000/- u/s 94(7), SIT disallowance of Rs. 85,179/- aggregating to Rs.
1,39,719/- and disallowance u/s 14A amounting to Rs. 8,15,040/-. The
penalty in question has been levied on these additions. Regarding the
penalty levied on the ground that the assessee had claimed STT in its profit
and loss account and has thereby reduced its income by concealing the
particulars of income, Ld. AR submitted that assesses had not concealed
particulars of income or furnished inaccurate particulars of income when it
claimed SIT in its profit and loss account as according to the assessee, it
was a case of bonafide error. Without prejudice to this argument the Ld. AR
submitted further that there is no tax sought to be evaded in the present
case even if the allegation of AO is taken as correct. He submitted that
there were two possibilities in the question of law regarding STT. The first
possibility was that upto assessment year 2008-09 no deduction from
income (due to section 40(a)(ib)) was allowable but the reduction from tax
u/s 88E was allowable. The second possibility was that deduction from
income u/s 36(i)(xv) was allowable but no reduction from tax (due to
specific mention in Section 88E(iii) was allowable. This possibility was
available from asstt. Year 2009-10. The assesee under its bonafide belief
availed the possibility discussed above in the asstt. Year under
consideration which was made available by Finance Act 2008 w.e.f. asstt.