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 Income Tax Addition Made Towards Unsubstantiated Share Capital Is Eligible For Section 80-IC Deduction: Delhi High Court

Committed Trading Pvt. Limited, Shop No. 319, 3rd Floor, Vardhman Fortune Mall, G.T. Karnal Road, vs. ITO, Ward 3(3) New Delhi
May, 13th 2019

Subject: He further stated that since the issue is purely legal based on facts already on record, the assessee

Referred Sections:
Section 271(1)© of the Act

 

                IN THE INCOME TAX APPELATE TRIBUNAL

                     DELHI BENCH "A": NEW DELHI

             BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER
                               AND
           SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER

                        ITA No. 367/Del/2016
                            A.Y. : 2008-09

COMMITTED TRADING PVT. LIMITED,           Vs.   ITO, WARD 3(3)
SHOP NO. 319, 3RD FLOOR,                        NEW DELHI
VARDHMAN FORTUNE MALL,
G.T. KARNAL ROAD,
DELHI ­ 110 033
(PAN: AACCC4073A)

(Appellant)                                     (Respondent)

                Assessee by :             Sh. Rohit Jain, Adv. & Ms. Shaily
                                          Gupta, CA
                Department by     :       Smt. Naina Soin Kapil, Sr. DR.


                                 ORDER

PER H.S. SIDHU, JM

     This appeal filed by the Assessee is directed against the Order dated

21.10.2015 of the Ld. Commissioner of Income Tax (Appeals)-2, New Delhi

pertaining to assessment year 2008-09.







2.   The grounds of appeal raised in the assessee's appeal read as under:-


           1.    On the facts and in the circumstances of the case and in
                law, the Id. CIT ( A) erred in upholding the levy of penalty
                of 47,43,320/- u/s 271(l)(c) of the Income tax Act,1961
                merely on the basis of presumptions and suspicions,

                                      1
                   ignoring the various judicial pronouncements and material
                   on record.

            2.     On the facts and in the circumstances of the case and in
                   law, the Id. CIT ( A) erred in upholding the levy of penalty
                   of 47,43,320/- u/s 271(l)(c) of the Income tax Act,1961on
                   the ground that no convincing/satisfactory explanation has
                   been filed by the assessee and that the assessee has failed
                   to prove that there was no fraud or neglect in filing the
                   return.

                   That the above grounds of appeal are without prejudice to
                   each other.

                   That the appellant craves leave to add, alter, amend or
                   withdraw any ground of appeal either before or at the time
                   of hearing of this appeal.

3.    Assessee has also filed separate Application for admission of additional

grounds in Appeal in which the assessee has stated that in view of the

settled decision in the case of NTPC 229 ITR 383 (SC), (legal ground can be

raised for first time in collateral and second round also). He further stated

that since the issue is      purely legal based on facts already on record, the

assessee may be allowed to         raise the following additional ground in the

interest of natural justice:-


                   "3.    That on facts and circumstances of the case and in
                   law, the impugned penalty of Rs. 47,43,320/- levied under
                   section 271(1)© of the Act is without jurisdiction, illegal
                   and bad in law.

                                         2
                 3.1    That the AO erred      on facts and in law in not
                 specifying whether the penalty is levied for   concealment
                 of income or for furnishing of inaccurate particulars     of
                 income, and interchangeably applying the two concepts
                 while imposing penalty under section 271(1)© of the Act."

3.1   Ld. Counsel of the Assessee requested that keeping in view of the

decision of the Hon'ble Supreme Court of India in the case of NTPC 229 ITR

383 (SC) (Supra), the additional grounds raised by the assessee in all the

three appeals may be admitted and decided first.


4.    On the contrary, Ld. DR strongly opposed the admission of additional

grounds (legal) raised by the assessee.







5.    After hearing both the parties as well as perusing the additional

grounds alongwith the orders passed by the Revenue Authorities, we are of

the considered view that in view of the decision of the Hon'ble Supreme

Court of India in the case of NTPC Limited 229 ITR 383 (Supra),          the

additional grounds raised by the assessee are purely legal ground and did

not require fresh facts which is to be investigated and goes to the root of

the matter.   In the   interest of justice, we admit the aforesaid additional

grounds. We find that since these additional ground were not raised before

the Ld. CIT(A), hence, the same requires adjudication by the Ld. CIT(A),

therefore, in the interest of justice, we remit back the aforesaid additional

grounds to the file of the Ld. CIT(A) with the directions to decide the same



                                      3
afresh under the law, after giving adequate opportunity of being heard to

the assessee.


6.    In the result, the appeal filed by the Assessee stands allowed for
statistical purposes.

       Order pronounced on 10/05/2019.


                  Sd/-                                            Sd/-

      [PRASHANT MAHARISHI]                                 [H.S. SIDHU]
        ACCOUNTANT MEMBER                               JUDICIAL MEMBER


Date: 10/05/2019

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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