ITA NO.5063/Del/2013
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "B", NEW DELHI
BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER
AND
SHRI T.S. KAPOOR, ACCOUNTANT MEMBER
I.T.A. No. 5063/DEL/2013
A.Y. : 2007-08
ACIT, CENTRAL CIRCLE-13, NEW M/S ELEL HOTELS AND
DELHI VS. INVESTMENTS LTD.,
ROOM NO. 332, ARA CENTRE, 9TH FLOOR, HOTEL SEA
JHANDEWALAN EXTN., ROCK,
NEW DELHI BAND STAND, BANDRA (W),
MUMBAI
(PAN:AAACE2846D)
(APPELLANT) (RESPONDENT)
Department by : Md. Mohsin Alam, CIT(DR)
Assessee by : Sh. Ajay Wadhwa, CA, Ms. Aruna,
CA
Date of Hearing : 20-08-2015
Date of Order : 26-08-2015
ORDER
PER H.S. SIDHU, JM
Revenue has filed this appeal against the Order dated 3.6.2013
passed by the Ld. Commissioner of Income Tax (Appeals)-I), New
Delhi pertaining to assessment year 2007-08.
2. The grounds raised by the Department read as under:-
"1. The order of the Ld. CIT(A) is not correct in law and
facts.
2. On the facts and in the circumstances of the case,
the Ld. CIT(A) has erred in law in deleting the
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penalty u/s. 271(1)(c) amounting to Rs.
2,01,67,817/- imposed by AO.
3. The appellant craves leave to add, amend any / all
the grounds of appeal before or during the course of
hearing of the appeal.
3. The brief facts of the case are that the return was filed
declaring a loss of Rs. 5,58,61,376/-. The assessment was
completed u/s. 143(3) of the Income Tax Act, 1961 on 31.12.2008
assessing the total income at Rs. 71,76,39,240/- after making
certain additions and disallowances. In appeal, two of the additions /
disallowances were sustained by the Ld. CIT(A) in his order dated
11.5.2010. He directed that instead of addition of Rs. 51,28,50,000/-
u/s. 69C, an addition of Rs. 4,96,68,535/- be made u/s. 2(24). He
further upheld the addition on account of scrap sales amounting to
Rs. 25 crores to the extent of Rs. 1,02,47,738/-. The AO initiated
penalty proceedings u/s. 271 r.w.s. 274 of the Income Tax Act, 1961
during the assessment proceedings u/s. 143(3), and finally imposed
a penalty of Rs. 2,01,67,817/- u/s. 271(1)(c) on the amounts upheld
in appeal vide order dated 16.3.2011.
4. Aggrieved with the penalty order, assessee appealed before
the Ld. CIT(A), who vide impugned order dated 03.6.2013 deleted
the penalty in dispute by allowing the appeal filed by the assessee.
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5. Now aggrieved with the impugned order, Revenue filed the
present Appeal before the Tribunal.
6. At the time of hearing, Ld. DR relied upon the order of the AO
and reiterated the contention raised by the Revenue in the grounds
of appeal.
7. On the contrary, Ld. Counsel of the assessee relied upon the
order passed by the Ld. First Appellate Authority and stated that in
this case since the quantum deleted/ set aside by the ITAT and
therefore, penalty does not survive. He further submitted that Ld.
CIT(A) has correctly appreciated the legal position by deleting the
penalty following the order of the ITAT dated 17.5.2012 on quantum
additions. He further stated that the Department has filed a
frivolous appeal against the order of the Ld. CIT(A) knowing well that
quantum has already been decided by the ITAT. He placed reliance
upon the decision of the ITAT in the case of ACIT vs. RPG Credit &
Capital Ltd. wherein the strictures have been passed against the
Department for filing frivolous appeal. He also filed the copy of the
letter written by the Member, CBDT directing the Commissioners of
Income Tax not to file frivolous appeals. In view of the above, he
requested that the impugned order of the Ld. CIT(A) may be upheld
by dismissing the appeal filed by the Revenue.
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8. We have heard both the parties and perused the relevant
records available with us, especially the orders passed by the
Revenue Authority. We are of the considered that the Ld. CIT(A) has
deleted the penalty in dispute by thoroughly examining the
assessment order, penalty order, submission filed by the assessee
and the order of the ITAT, Delhi dated 17.5.2012 in ITA No.
3148/Del/2010 filed by the assessee and cross appeal filed by the
Revenue in ITA No. 3477/Del/2010. We find that the addition of Rs.
4,96,68,535/- directed to be made u/s. 2(24) by the Ld. CIT(A) was
deleted vide para no. 78. We also find that as the quantum addition
has been deleted, the penalty relating thereto does not survive and
was rightly deleted, which does not need any interference on our
part, hence, we uphold the decision of the Ld. CIT(A) on this issue.
8.1 As regards the addition of Rs. 1,02,47,738/-, we find that the
ITAT has vide aforesaid order dated 17.5.2012 vide para 110 of the
order restored the matter to the AO with the direction to decide the
same after giving the assessee a reasonable opportunity of hearing
in this regard. We note that as the quantum addition has been
restored to the AO for fresh decision, the penalty imposed relating
thereto was rightly cancelled by the Ld. CIT(A).
8.2 In the background of the aforesaid discussions and in view of
the facts and circumstances of the case, we are of the considered
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opinion that in the present case, the penalty under section 271(l)(c)
is not leviable and it deserves to be deleted, hence, Ld. CIT(A) has
rightly deleted the penalty made by the Assessing Officer.
Therefore, we do not see any reason to interfere with the order of
the Ld. CIT(A), accordingly, we uphold the same and decide the
issue against the Revenue by dismissing the Appeal filed by the
Revenue.
9. In the result, the appeal filed by the Revenue stands
dismissed.
Order pronounced in the Open Court on 26/08/2015.
Sd/- Sd/-
[T.S. KAPOOR] [H.S. SIDHU]
ACCOUNTANT MEMBER JUDICIAL MEMBER
Date 26/8/2015
"SRBHATNAGAR"
Copy forwarded to: -
1. Appellant -
2. Respondent -
3. CIT
4. CIT (A)
5. DR, ITAT TRUE COPY
By Order,
Assistant Registrar,
ITAT, Delhi Benches
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