Saga Developers Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 3565/DEL/2017

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 5433 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 01-11-2023
• Assessment Year: 2007-2008
• Appeal Filed On: 04-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Deemed dividend
• Section: 271(1)(c); 40A(3); 2(22)(e)

Judgement Text

I.T.A. No. 3565/Del/2017 1 IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH “G” : DELHI ] BEFORE SHRI G. S. PANNU, HON’BLE VICE-PRESIDENT A N D SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER आ.अ.सं/.I.T.A No.3565/Del/2017 िनधाᭅरणवषᭅ/Assessment Years: 2007-08 Saga Developers Pvt. Ltd., B-67, Sarita Vihar, New Delhi – 110 076. बनाम Vs. DCIT, Central Circle : 19, New Delhi. PAN No. AAJCS4932K अपीलाथᱮ / Appellant ᮧ᭜यथᱮ/ Respondent िनधाᭅᳯरतीकᳱओरसे /Assessee by : Shri Srikant, Advocate; राज᭭वकᳱओरसे / Department by : Shri H. K. Choudhary, [CIT] - D. R. सुनवाईकᳱतारीख/ Date of hearing : 02/11/2023 उ᳃ोषणाकᳱतारीख/Pronouncement on : 09/11/2023 आदेश / O R D E R PER C. N. PRASAD, J. M. : 1. This appeal is filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)-27 [hereinafter referred I.T.A. No. 3565/Del/2017 2 to CIT (Appeals)] New Delhi, dated 30.03.2017 for assessment year 2007-08 in sustaining the penalty levied under section 271(1)(c) of the Income Tax Act, 1961 (the Act). 2. At the outset, the ld. Counsel for the assessee submits that the addition made while completing the assessment under section 153A of the Act based on which penalty under section 271(1)(c) was levied has been deleted by the Tribunal in ITA. No. 3164/Del/2014 dated 13.10.2023 and, therefore, since the quantum additions have been deleted by the Tribunal, it is the prayer of the assessee that the penalty be deleted. 3. The ld. DR fairly agreed with the submissions. 4. Heard rival submissions perused the orders of the authorities below and the order of the Tribunal in quantum proceedings. On perusal of the record before us it is noticed that penalty under section 271(1)(c) of the Act was levied on the following additions:- (i) Disallowance under section 40A(3) Rs. 4,07,600/- (ii) Disallowance for negative balance Rs. 4,75,075/- (iii) Deemed dividend under section 2(22)(e) Rs.29,06,914/- 5. The assessee filed appeal against the order of the Assessing Officer imposing penalty under section 271(1)(c) of the Act on the above additions. The ld. CIT (Appeals) deleted the penalty in so far as the disallowance under section 40A(3) to Rs.4,07,600/- is concerned and sustained the penalty on the disallowance of negative cash balance and deemed dividend under section I.T.A. No. 3565/Del/2017 3 2(22)(e) of the Act of Rs.4,75,075/- and Rs.29,06,914/- respectively. We observe that the Tribunal by order dated 13.10.2023 in ITA. No. 3164/Del/2014 deleted the addition/disallowance made towards negative cash balance of Rs.4,75,075/- and deemed dividend of Rs.29,06,914/- in the absence of any incriminatory documents in the course of search following the decision of the Hon’ble Supreme Court in the case of PCIT Vs. Abhisar Buildwell (P.) Ltd. [(2023) 149 taxmann.com 399 (SC)]. Therefore since the additions have been deleted by the Tribunal, the penalty levied on the basis of such additions has no legs to stand. Thus, we quash the penalty order passed under section 271(1)(c) of the Act. 6. In the result, appeal of the assessee is allowed. Order pronounced in the open court on : 09/11/2023. Sd/- Sd/- ( G. S. PANNU ) ( C. N. PRASAD ) VICE-PRESIDENT JUDICIAL MEMBER Dated : 09/11/2023. *MEHTA* आदेश की Ůितिलिप अŤेिषत / Copy of Order Forwarded to:- 1. आवेदक / Assessee 2. राजˢ / Revenue 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ- अपील / CIT (A) 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, DELHI / I.T.A. No. 3565/Del/2017 4 DR, ITAT, DELHI 6. गाडŊ फाइल / Guard file. By order ASSISTANT REGISTRAR ITAT, New Delhi. Date of dictation 02.11.2023 Date on which the typed draft is placed before the dictating Member 03.11.2023 Date on which the typed draft is placed before the Other Member 09.11.2023 Date on which the approved draft comes to the Sr. PS/PS 09.11.2023 Date on which the fair order is placed before the Dictating Member for pronouncement 09.11.2023 Date on which the fair order comes back to the Sr. PS/PS 09.11.2023 Date on which the final order is uploaded on the website of ITAT 09.11.2023 Date on which the file goes to the Bench Clerk 09.11.2023 Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order I.T.A. No. 3565/Del/2017 5