ACIT, New Delhi V. M/s. Richa Knitwears, New Delhi

ITA 3441/DEL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52456 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 09-08-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 14-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUSHA KHURANA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER & SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 3441/DEL/2010 ASSESSMENT YEAR: 2004-05 ACIT, VS. RICHA KNITWEARS, CIRCLE-27(1), ROOM NO. 218, MAYA PURI, D-BLOCK, VIKAS BHAWAN, INDUSTRIAL AREA, NEW DELHI. PHASE-1, NEW DELHI. AAAFR0101P (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. ANUSHA KHURANA, SR. DR RESPONDENT BY : WRITTEN SUBMISSION ORDER PER C.L. SETHI, J.M. THE ONLY GROUND IN THIS APPEAL FILED BY THE REVENU E AGAINST THE ORDER DATED 6.5.2010 PASSED BY LD. CIT( A) DELETING THE PENALTY LEVIED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT) BY THE ASSESSING OFFICER FOR THE A.Y. 200 4-05 IS AS UNDER: - ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN CANCELLING THE PENALTY U/S 271( 1)(C) OF THE I.T. ACT AMOUNTING TO RS. 6,77,970/-. THE APPELLANT CRAVES THE RIGHT TO ADD ANY OTHER GROUND OF APPEAL. ITA NO. 3441/D/2010 2 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE CAREFULL Y PERUSED THE MATERIAL ON RECORD. 3. IN THE ASSESSMENT, THE AO DISALLOWED THE SUM OF RS. 18,89,812/- ON ACCOUNT OF FOREIGN TOUR EXPENSES INC URRED IN CONNECTION WITH FOREIGN TOURS UNDERTAKEN BY THE PAR TNERS AND EMPLOYEES OF THE FIRM TO HONGKONG, DUBAI & SINGAPOR E. THE AO ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. THE AFORESAID DISALLOWANCE MADE BY THE AO WAS CONFI RMED BY THE LD. CIT(A) VIDE ORDER DATED 26.03.2008. THE AO AFTER HEARING THE ASSESSEE LEVIED THE PENALTY AMOUNTING T O RS. 6,77,970/- BEING 100% TAX SOUGHT TO BE EVADED ON TH E AMOUNT OF RS. 18,89,812/- VIDE HIS ORDER DATED 27.03.2009. HOWEVER, IN THE MEANTIME, THE AFORESAID DISALLOWANCE HAS BEE N DELETED BY THE TRIBUNAL VIDE ORDER DATED 31.03.2009 IN ITA NO. 1684/DEL/2008. SINCE, THE DISPUTED DISALLOWANCE IS ITSELF DELETED IN APPEAL BY THE TRIBUNAL, THE VERY BASIS F OR THE LEVY OF PENALTY WITH REGARD TO SUCH DISALLOWANCE CEASES TO EXIST AND THE PENALTY ORDER LOSSES OF ITS LEGAL EFFECT. THE LD. CIT(A) HAS DELETED THE PENALTY FOR THIS REASON THAT THE DISALL OWANCE HAS BEEN DELETED BY THE TRIBUNAL. WE DO NOT FIND ANY I NFIRMITY IN ITA NO. 3441/D/2010 3 THE ORDER OF LD. CIT(A) IN DELETING THE PENALTY LEV IED BY THE AO, IN AS MUCH AS THE VERY ADDITION MADE BY THE AO HAS BEEN DELETED. THE ORDER OF LD. CIT(A) IS THUS, UPHELD. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. 5. THIS DECISION IS PRONOUNCED IN THE OPEN COURT ON 9.08.2011 . SD/- SD/- (SHAMIM YAHYA) (C.L. SETH I) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 9.8.11 *KAVITA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR