GOPAL & SONS HUF,KOLKATA V. I.T.O., WARD - 32(1), KOLKATA, KOLKATA

ITA 1701/KOL/2024

AI Insights

The case involves Gopal & Sons HUF appealing against the penalty confirmed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, which was initially levied by the Assessing Officer under section 271(1)(c) of the Income-tax Act, 1961. The penalty was related to an addition of Rs.1,30,31,277 made under section 2(22)(e) of the Act, which was considered as deemed dividend. The Tribunal noted that the issue had been previously contested and had reached the Supreme Court, where the assessee had initially received relief at the Tribunal level, which was later reversed by the High Court. Given the contentious nature of the issue and its legal proceedings, the Tribunal decided that the imposition of a penalty was not justified.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 28706 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Deemed dividend
• Section: 250; 271(1)(c); 2(22)(e)

Judgement Text

" आयकर अपीलȣय अͬधकरण, कोलकाता पीठ ‘C’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH KOLKATA Before Shri Sanjay Garg, Judicial Member and Shri Rakesh Mishra, Accountant Member I.T.A. No.1701/Kol/2024 Assessment Year: 2006-07 Gopal & Sons HUF .………. Appellant 113, Park Street, Block-A, 1st Floor, Park Street, Kolkata-700016. (PAN: AABHG9506N) vs. Income Tax Officer, Ward-32(1), Kolkata. ……..… Respondent Appearances by: N o n e appeared on behalf of the Appellant Shri Sandip Sengputa, Sr. DR appeared on behalf of the Respondent Date of concluding the hearing: January 06, 2025 Date of pronouncing the order: January, 08,2025 आदेश / ORDER Per Sanjay Garg, Judicial Member : The present appeal has been preferred by the assessee against the order dated 04.07.2024 of the Ld. Commissioner of Income Tax, (Appeal), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the “Ld. CIT(A)”] passed u/s. 250 of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) for Assessment Year (AY) 2006-07. 2. The assessee in this appeal is aggrieved by the action of the Ld. CIT(A) in confirming the penalty levied by the AO u/s. 271(1)(c) of the Act. 3. No one has put an appearance on behalf of the assessee despite service of notice. Considering the small issue involved, which can be adjudicated after going through the record and after hearing the Ld. DR, we proceed to decide the appeal on merits. 2 ITA No.`1701/Kol/2024 Gopal & Sons HUF, AY 2006-07 4. Brief facts of the case are that the Assessing Officer (AO) had made addition of Rs.1,30,31,277/- u/s. 2(22)(e) of the Act on account of deemed dividend. The AO had noted that the assessee HUF received advance from M/s. G. S. Fertilizers Pvt. Ltd. (GSFPL). The assessee was a registered and substantial shareholder of the said GSFPL. The AO, therefore, invoked provisions of section 2(22)(e) of the Act and made the impugned addition. The assessee contested the aforesaid addition up to the Supreme Court. The plea of the assessee was that the aforesaid advance was out of the normal course of business and not as a loan per se. Though the Ld. CIT(A) had confirmed the additions but the ITAT had deleted the addition. Thereafter, the Hon’ble Calcutta High Court confirmed the additions against which the SLP filed by the assessee was dismissed by the Hon’ble Supreme Court. 5. The aforesaid facts on file clearly show that the issue on which the addition had been made by the AO was a debatable issue which was contested up to the Hon’ble Supreme Court even the assessee had also got relief at Tribunal level, which was reversed by the High Court. Under the circumstances, it cannot be said to be a case where the assessee had intentionally concealed its income or furnish inaccurate particulars of income for the purpose of evasion of tax. We, therefore, do not find it a fit case of levy of penalty u/s. 271(1)(c) of the Act. The same is accordingly, ordered to be deleted. 6. In the result, the appeal of the assessee stands allowed. Order is pronounced in the open court on 08.01.2025 Sd/- Sd/- [Rakesh Mishra] [Sanjay Garg] लेखा सदèय/Accountant Member ÛयाǓयक सदèय/Judicial Member Dated: 08.01.2025 JD Sr. P.S "