Ganesha Securities Pvt. Ltd., New Delhi V. ACIT, New Delhi

ITA 2352/DEL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7490 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 25-07-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 17-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIT LAL
• Keywords: Notional interest
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C: NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER, AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA NO. 2352/DEL /2014 ASSESSMENT YEAR: 2006-07 GANESHA SECURITIES P LTD VS. THE A.C.I.T. D-6/17, VASANT VIHAR CIRCLE -12(1) NEW DELHI NEW DELHI PAN : AAACG 2464 R [APPELLANT] [RESPONDENT] DATE OF HEARING : 25.07.2016 DATE OF PRONOUNCEMENT : 03.08.2016 APPELLANT BY : SHRI SANJAY AGRAW AL, FCA RESPONDENT BY : SHRI AMRIT LAL, SR. DR ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE CIT(A)-X, DELHI, DATED 19/02/2014 FOR A.Y 2006-07 PASSED IN FIRST APPEAL NO. 121/2013-14. 2. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D HAVE CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON R ECORD ON THE TRIBUNAL INTER ALIA ASSESSMENT ORDER AND ORDER OF T HE CIT(A). THE LD. AR PLACING A COPY OF THE ORDER OF THE ITAT C BENC H DATED 31.7.2015 PASSED IN ITA NO. 792/DEL/2011 FOR A.Y 2006-07 AND SUBMITTED THAT 2 ITA NO. 2352/ DEL/2014 2 THE IMPUGNED ISSUE OF DISALLOWANCE U/S 14A OF THE I NCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT', DISALLO WANCE BEING LOSS ON ACCOUNT OF FORFEITURE OF ADVANCE PAID FOR PURCHASES OF PROPERTY AT RS. 75 LAKHS AND ISSUE OF ADDITION ON NOTIONAL INTEREST AS ADVANCE TO SHRI MAHESH KUMAR SHARMA HAVE BEEN RESTORED TO THE FILE OF THE AO FOR AFRESH ADJUDICATION. HE, THEREFORE, SUBMITTED THAT THE PENALTY ON ALL THE THREE COUNTS/ISSUED LEVIED BY THE AO CANNOT BE HELD AS SUSTAINABLE. 3. THE LD. COUNSEL OF THE REVENUE SUPPORTED THE ORD ERS OF THE AUTHORITIES BELOW. HOWEVER, THE LD. DR FAIRLY ACCE PTED THAT IN THE QUANTUM APPEAL THE TRIBUNAL HAS RESTORED ALL THE TH REE ISSUES TO THE FILE OF THE AO AND PENALTY ORDER CANNOT BE HELD AS SUSTAINABLE. AT THE SAME TIME, HE ALSO CONTENDED THAT THE AO HAS VALID JURISDICTION TO INITIATE AND IMPOSE PENALTY AS PER ABOVE APPEAL EFF ECT ORDER PASSED BY THE AO. THE LD. DR FURTHER SUBMITTED THAT HE PO WERS OF THE AO WILL NOT BE CURTAILED IF THE ADDITIONS ARE MADE AND PENALTY IS IMPOSABLE ON THE ISSUES AS PER OUTCOME OF THE APPEA L EFFECT RE ASSESSMENT ORDER PASSED IN PURSUANCE TO THE TRIBUNA L ORDER. 4. ON CAREFUL CONSIDERATION OF THE ABOVE, WE ARE OF THE VIEW THAT ON CAREFUL PERUSAL OF THE TRIBUNAL ORDER DATED 31.7.2015 [SUPRA] FOR A.Y 2006-07 IT IS AMPLY CLEAR THAT ALL THE THREE ISSUES, ON WHICH PENALTY HAS BEEN LEVIED U/S 271(1)(C) OF T HE ACT HAVE 3 ITA NO. 2352/ DEL/2014 3 BEEN RESTORED TO THE FILE OF THE AO FOR AFRESH ADJU DICATION, THIS PENALTY ORDER AS WELL AS IMPUGNED ORDER OF THE CIT( A) DO NOT SURVIVE AND WE DEMOLISH AND DISMISS THE SAME. BEFO RE WE PART WITH THE ORDER, WE MAKE IT CLEAR THAT IN THE EVENT OF ADDITIONS AND DISALLOWANCES IN THE APPEAL EFFECT REASSESSMENT ORDER IF REQUIRED THE AO WILL NOT BE PREVENTED FROM INITIATI NG PENALTY PROCEEDINGS AS PER OUTCOME OF THE SAID ORDER TO BE PASSED U/S 143(3)/154 OF THE ACT. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED AS INDICATED ABOVE. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 03.08 .2016. SD/- SD/- (S.V. MEHROTRA) (C.M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 03 RD AUGUST, 2016 VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI