ITO, New Delhi V. M/s. Iscon Global Pvt. Ltd., New Delhi

ITA 4777/DEL/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0548 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-01-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 02-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MONA MOHANTY
• Keywords: Bogus Share capital

Judgement Text

I.T.A. NO.4777 /DEL/2010 1/3 IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, NEW DELHI, BENCH C NEW DELHI, BENCH C NEW DELHI, BENCH C NEW DELHI, BENCH C BEFORE SHRI R. P. TOLANI, JUDICIAL MEMBER AND SHRI K. D. RANJAN, ACCOUTANT MEMBER ITA NO. 4777/DEL/2010 (ASSESSMENT YEAR 2002-03) I.T.O., WARD 11(4), VS. M/S. ISCON GLOBAL PVT. LTD ., NEW DELHI C-22, LAWRENCE ROAD INDL. AREA, NEW DELHI. (APPELLANTS) (RESPONDENTS) PAN / GIR NO.AAAC1914H APPELLANT BY: SMT. MONA MOHANTY, SR. DR RESPONDENT BY: NONE ORDER ORDER ORDER ORDER PER K. D. RANJAN, AM: PER K. D. RANJAN, AM: PER K. D. RANJAN, AM: PER K. D. RANJAN, AM: 1. THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YE AR 2002-03 ARISES OUT OF THE ORDER OF LD. CIT(A) III, NEW DELH I. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE REPRODUCED AS UNDE R: 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE ORDER OF CIT(A) IS WRONG, PERVERSE, ILLEGA L AND AGAINST THE PROVISIONS OF LAW WHICH IS LIABLE TO BE SET ASI DE. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD .CIT(A) HAS ERRED IN DELETING THE PENAL TY OF ` 12,13,800/- IMPOSED U/S 271(1)(C) OF THE I. T. ACT, 1961 VIDE A.O.S ORDER DATED 22.07.2008. 2. THE ONLY ISSUE FOR CONSIDERATION RELATES TO DELE TION OF PENALTY OF ` 12,13,800/- IMPOSED U/S 271(1)(C) OF THE ACT. THE FACTS OF THE CASE IN BRIEF ARE THAT THE A.O. MADE ADDITION OF ` 34 LACS ON ACCOUNT OF CASH CREDITS APPEARING IN THE NAME OF SIX DIFFER ENT PARTIES. THE A.O. IN THE COURSE OF ASSESSMENT PROCEEDINGS ADDED THE AMOUNT OF ` 34 LACS ON ACCOUNT OF UNEXPLAINED SHARE CAPITAL. ON APPEAL, AGAINST QUANTUM ADDITION, THE LD. CIT(A) CONFIRMED THE ADDITION. I.T.A. NO.4777 /DEL/2010 2/3 SINCE THE ADDITION WAS CONFIRMED BY LD. CIT(A) TO T HE EXTENT OF ` 34 LACS OUT OF ADDITION OF ` 1.96 CRORES, THE A.O. LEV IED PENALTY @ 100% ON THE AMOUNT OF TAX SOUGHT TO BE EVADED. 3. ON APPEAL BEFORE LD. CIT(A), IT WAS SUBMITTED BY THE ASSESSEE THAT ITAT VIDE ORDER DATED 25.3.2008 IN I.T.A. NO. 1310/DEL/2008 AND I.T.A. NO. 1167/DEL/2008 DISMISSED THE APPEAL F ILED BY THE REVENUE AND ALLOWED THE APPEAL OF THE ASSESSEE AGAI NST THE SUSTENANCE OF ADDITION OF ` 34 LACS. LD. CIT(A) IN VIEW OF THE FACT THAT THE QUANTUM ADDITION WAS DELETED BY ITAT, DELE TED THE PENALTY IMPOSED BY THE A.O. 4. NONE ATTENDED ON BEHALF OF THE ASSESSEE AND SINC E THE QUANTUM ADDITION HAS BEEN DELETED, WE PROCEED TO DE CIDE THE APPEAL AFTER HEARING LD. SR. DR. 5. WE HAVE HEARD LD. SR. DR. THERE IS NO DISPUTE T HAT QUANTUM ADDITION ON THE BASIS OF WHICH PENALTY U/S 271(1)(C ) WAS LEVIED BY THE A.O. HAS BEEN DELETED BY ITAT AND, THEREFORE, T HE VERY BASIS FOR LEVY OF PENALTY DOES NOT EXISTS. THEREFORE, PENALT Y PROCEEDINGS CANNOT BE SUSTAINED WHEN THE VERY BASIS OF INITIATI ON OF PENALTY PROCEEDINGS ARE NOT IN EXISTENCE. HON'BLE SUPREME COURT IN THE CASE OF K C BUILDERS VS ACIT 265 ITR 562 HAS HELD T HAT WHERE ADDITION MADE IN THE ASSESSMENT ORDER ON THE BASIS OF WHICH PENALTY FOR CONCEALMENT IS LEVIED, ARE DELETED, THE RE REMAINED NO BASIS AT ALL FOR LEVYING ANY PENALTY FOR CONCEALMEN T AND, THEREFORE IN SUCH A CASE, NO PENALTY CAN SURVIVE AND THE PENALTY IS LIABLE TO BE CANCELLED. ORDINARILY, PENALTY CANNOT STAND IF ASS ESSMENT ITSELF IS SET ASIDE. SINCE THE ISSUE IS SQUARELY COVERED BY THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF K C BUILDERS ( SUPRA), RESPECTFULLY FOLLOWING THE PRECEDENT IT IS HELD THA T LD. CIT(A) WAS I.T.A. NO.4777 /DEL/2010 3/3 RIGHT IN DELETING THE PENALTY. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY LD. CIT(A) CANCELI NG THE PENALTY IMPOSED BY THE A.O. 5. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. 6. PRONOUNCED IN THE OPEN COURT ON 04 TH FEB., 2011 ON CLOSE OF HEARING. SD./- SD./- (R. P. TOLANI) (K. D. RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 04 TH FEB., 2011 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI