ITO - 13(2)(4), MUMBAI V. MANOJKUMAR BERIWAL, MUMBAI

ITA 553/MUM/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9578 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 1999-2000
• Appeal Filed On: 23-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR
• Assessee Lawyers: V K TULSIYAN
• Keywords: Opportunity of being heard
• Section: 143(3); 142(1); 69; 6; 144; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI G. S. PANNU , A M AND SHRI RAM LAL NEGI , J M ./ I.T.A. NO S . 553 & 5815 / MUM/ 2014 ( / ASSESSMENT YEAR: 1999 - 2000 ) ITO - 1 3(2)(4), ROOM NO. 412, 4 TH FLOOR, AAYKAR BHAVAN, M. K. ROAD, MUMBAI - 400 020 / VS. SHRI MANOJKUMAR BERIWAL C/O. M/S. SAJAN STEELS, 406 - B, BHARAT CHAMBERS, 52C, BARODA ST., CARNAC BUNDER, MUMBAI - 400 009 ./ ./ PAN/GIR NO. ABRPB 4589 M ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : MS. SUMAN KUMAR / RESPONDENT BY : SHRI V. K. TULSIYAN / DATE OF HEARING : 31.08.2017 / DATE OF PRONOU NCEMENT : 13 .09.2017 / O R D E R P ER R AM L AL N EGI , JM : TH ESE TWO APPEALS HAVE BEEN FILED BY THE REVENUE AGAINST THE ORDER DATED 24.10.2013 AND 10.06.2014 PASSED BY THE LD. CIT(A) - 24, MUMBAI. VIDE ITA NO. 553/MUM/2014, THE REVENUE HAS CHALLENGED T HE ORDER PASSED BY THE LD. CIT(A) WHEREBY THE LD. CIT(A) HAS PARTLY ALLOWED THE APPEAL FILED BY THE APPELLANT - ASSESSEE AGAINST THE ASSESSMENT ORDER PASSED U/S. 143(3) OF THE INCOME TAX AC T, 1961 (THE ACT HEREINAFTER). VIDE THE SECOND APPEAL, THE REVENUE HAS CHALLENGED THE ORDER PASSED BY THE LD. CIT(A) WHEREBY THE LD. C IT(A) HAS ALLOWED THE APPEAL FILED BY THE ASSESSEE AGAINST THE PENALTY ORDER PASSED U/S. 271(1)(C) OF THE ACT AND DELETED THE PENALTY LEVIED BY THE AO . BOTH THE APPEALS PERTAIN TO THE SAME ASSESSEE, HENCE, THE 2 ITA NO S . 553 & 5815/M / 14 (A.Y. 1999 - 2000) ITO VS. SHRI MANOJKUMAR BERIWAL SAME WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 553/MUM/2014 (A.Y. 1999 - 2000) 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE RELEVANT A SSESSMENT YEAR DECLARING THE TOTAL INCOME OF RS.4,14,9 38 / - . SINCE T HE CASE WAS SELECTED FOR SCRUTINY, A.O. ISSUED NOTICES U/S. 143(2) AND 142(1) FROM TIME TO TIME , H OWEVER, THE ASSESSEE DID NOT RESPOND . A CCORDINGLY, THE A.O. DECIDED TO PASS A SSESSMENT ORDE R U/S. 144 OF THE ACT ON THE BASIS OF MATERIAL AVAILABLE ON RECORD . DURING ASSESSMENT PROCEEDINGS IT WAS NOTICED THAT THE ASSESSEE HAD SHOWN TOTAL TURNOVE R OF RS.18,84,01,004/ - AND N P OF RS.4,14,938/ - . HENCE, A.O. CALLED FOR THE STATEMENT OF ACCOUNTS OF TH E ASSESSEE FROM UNION BANK OF INDIA. IT WAS NOTICED FROM THE BANK ACCOUNT AND BALANCE SHEET OF THE ASSESSEE THAT THE ASSESSEE HAD DEBIT BALANCE OF RS.1,35,74,215/ - . ON BEING ASKED, THE MANAGER OF THE BANK VIDE LETTER DATED 09.03.2002 INFORMED THAT AS PER T H E STOCK STATEMENT FURNISHED, THE ASSESSEE WAS ELIGIBLE FOR CASH CREDIT OF RS.1,22,91,000/ - . UNION BANK OF INDIA WAS FURTHER ASKED TO CONFIRM WHETHER THE STOCK SHOWN BY THE ASSESSEE IN HIS STATEMENT TO THE BANK AMOUNTING TO RS.1,22,91,000/ - WAS INSPECTED, VERIFIED AND CONFIRMED BY THE BANK AUTHORITIES ? I N RESPONSE THEREOF , THE BANK MANAGER CONFIRMED THAT THE STOCK WAS INSPECTED AND VERIFIED. 5. IT WAS FURTHER NOTICED THAT THE ASSESSEE HAD SHOWN A CLOSING STOCK OF RS.1,59,300/ - . T HE ASSESSEE HAD SHOWN THE Q UANTITY, HR, CR, GP, GC, COILS & SHEETS TO THE EXTENT OF 31.86 M ETRIC TONS WHICH HAD BEEN VALUED AT RS.1,55,930/ - . THE ASSESSEE WAS ASKED TO EXPLAIN THE DISCREPANCY. DESPITE ADEQUATE OPPORTUNITY AFFORDED TO THE ASSESSEE, THE ASSESSEE DID NOT SUBMIT ANY EXP LANATION. ACCORDINGLY, THE A.O. CONSIDERED THE DISCREPANCY IN STOCK AMOUNTING TO RS.1,21,31,700/ - AS UNDISCLOSED INVESTMENT OF THE ASSESSEE IN STOCK AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 3 ITA NO S . 553 & 5815/M / 14 (A.Y. 1999 - 2000) ITO VS. SHRI MANOJKUMAR BERIWAL THE ASSESSMENT ORDER WAS CHALLENGED BY THE ASSESSEE IN TH E FIRST APPEAL BEFORE THE LD. C IT(A). THE LD CIT(A) 6. THE REVENUE IS IN APPEAL AGAINST THE ORDER PASSED BY THE LD. CIT(A). THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER ON THE FOLLOWING EFFECTIVE GROUND OF APPEAL: 1. 'ON THE FACTS AND IN THE CIRCUMSTA NCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE U/S 69 MADE BY THE AO ON ACCOUNT OF UNDISCLOSED INVESTMENT IN STOCK AMOUNTING TO RS.1,21,31,700 / - . . 7. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED THAT THE LD . CIT(A) HAS WRONGLY DELETED THE ADDITION MADE BY THE A.O. SINCE THE ASSESSEE HAS FAILED TO EXPLAIN THE DISCREPANCY POINTED OUT BY THE A.O., THE A.O. HAS RIGHTLY MADE THE ADDITION TO THE INCOME OF THE ASSESSEE AFTER TREATING THE AMOUNT IN QUESTION AS UNEXP LAINED INVESTMENT. ACCORDINGLY, THE FINDINGS OF THE LD. CIT(A) IS CONTRARY TO THE EVIDENCE ON RECORD. 8. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE RELYING ON THE ORDER PASSED BY THE LD. CIT(A) SUBMITTED THAT THE LD. CIT(A) HAS RIGHTLY DELETED TH E ADDITI ON MADE BY THE A.O. AS THE AO HAS PASSED THE ASSESSMENT ORDER U/S 144 OF THE ACT WITHOUT AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE AO HAS BASED HIS FINDINGS ON THE BASIS OF LETTER ISSUED BY THE BANK AND THE STOCK STATEM ENT SUBMITTED BY THE ASSESSEE IN CONNECTION WITH AVAILING CASH CREDIT FACILITIES. SINCE, THE ASSESSEE HAD GIVEN THE FIGURES JUST TO AVAIL LOAN/CREDIT FACILITIES, THE AO HAS WRONGLY RELIED UPON THE SAME. THE FINDINGS OF THE LD. CIT(A) ARE BASED ON THE PRINC IPLES OF LAW LAID DOWN BY THE HONBLE GUJARAT HIGH COURT IN CIT VS. VERRDIP ROLLERS (P) LTD. 323 ITR 34 (GUJ.), WHICH HAS BEEN UPHELD BY THE HONBLE SUPREME COURT, THEREFORE, THERE IS NO MERIT IN THE REVENUES APPEAL AND THE SAME IS LIABLE TO BE DISMISSED. 4 ITA NO S . 553 & 5815/M / 14 (A.Y. 1999 - 2000) ITO VS. SHRI MANOJKUMAR BERIWAL 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. W E NOTICED THAT THE A.O. HAS PASSED THE EX PARTE ORDER BY RELYING ON THE LETTER DATED 09.3.2002 ISSUED BY THE UNION BANK OF INDIA AND STOCK STATEMENT OF THE ASSESSEE, AS ON 31.3.19 99 , MADE AVAILABLE BY THE SAID BANK. SIMILARLY, THE A.O. FURTHER RELIED ON THE LETTER ISSUED BY THE MANAGER OF THE BANK CONFIRMING VERIFICATION OF THE STOCK SHOWN BY THE ASSESSEE IN HIS STOCK STATEMENT . THE STOCK STATEMENT DISCLOSED THE VALUE OF CLOSING S TOCK AT RS. 1,45,93,000/ - INCLUDING UNPAID STOCK OF RS. 23,02,000/ - . SINCE, THE ASSESSEE DID NOT FILE ANY EXPLANATION AO MADE AN ADDITION OF RS 1,22,91,000/ - (RS. 1,45,93,000 - 23,02,00) DURING THE APPELLATE PROCEEDING, THE STOCK STATEMENT DATED 31.3.199 9 AND LETTER DATED 19.12.2005 WERE MADE AVAILABLE, CONTAINING CONFIRMATORY REMARKS OF THE BANK OFFICIALS REGARDING THE STOCK HELD BY THE ASSESSEE. THE ASSESSEE CONTENDED THAT THE FIGURES GIVEN TO THE BANK ARE JUST FOR AVAILING CREDIT FACILITIES AND THERE I S NO DIRECT OR INDIRECT NEXUS WITH THE BOOK OF ACCOUNT, AUDITED BALANCE SHEET. THE ASSESSEE ALSO PRODUCED THE AUDITED BALANCE SHEET REFLECTING THE ACTUAL FIGURES. T HE LD. CIT(A) HAS DELETED THE ADDITION HOLDING THAT THE ADDITION IN QUESTION MADE ON THE BAS IS OF INFLATED STOCK STATEMENT FURNISHED BY THE ASSESSEE TO AVAIL THE CASH CREDIT FACILITY WAS NOT JUSTIFIED. THE RELEVANT PORTION OF THE ORDER PASSED BY THE LD. CIT(A) IS REPRODUCED BELOW: 4.1.2 THUS, IT BECOMES CLEAR FROM EARLIER PARA THAT ASSESSEE SUB MITTED A STOCK STATEMENT AS ON 31.03.1999 T O THE UNION BANK OF INDIA, S.T. ROAD, MUMBAI TO AVAIL OF CASH CREDIT FACILITY FROM THE BANK, HOWEVER, THE EXISTENCE OF THE STOCK OF GOODS OF STEEL AS MENTIONED IN STOCK STATEMENT AS ON 31/3/1999 WAS NOT PHYSICALLY VERIFIED AND INSPECTED BY THE BANK OFFICIALS WHILE SANCTIONING THE CASH CR EDIT DRAWING POWER LIMIT OF RS. 88.00 LACS TO THE ASSESSEE AS PER THE SIGNATURE DATED 09/4/1999 APPEARING ON THE STOCK STATEMENT AS ON 31/3/1999 SIGNED BY THE ASSESSEE. THIS IS FURTH ER CONFIRMED BY THE LETTER DATED 19/12/2005 OF THE UNION BANK TO THE ASSESSING OFFICER WHEREIN 'THEY HAD PLEADED THEIR INABILITY TO FILE STOCK INSPECTION REPORT BASED ON STOCK AVAILABLE WITH THE ASSESSEE AS ON 31/3/1999, BUT HAD ENCLOSED THE GODOWN INSPECT ION REPORT DATED 28/11/1998 DULY SIGNED AND STAMPED BY THE BANK OFFICIALS'. THIS MEANS THAT UNION BANK COULD TRACE OUT AND FILE GODOWN INSPECTION REPORT DATED 28/11/1998 SIGNED BY THE BANK OFFICIALS BUT COULD NOT TRACE OUT THE GODOWN 5 ITA NO S . 553 & 5815/M / 14 (A.Y. 1999 - 2000) ITO VS. SHRI MANOJKUMAR BERIWAL INSPECTION REPORT OF S TOCK HELD BY ASSESSEE IN OFFICE/GODOWN AS ON 31/3/1999. ONLY PLAUSIBLE REASON CAN BE THAT THE GODOWN I NSPECTION REPORT WAS NOT PREPARED AND, THEREFORE, NOT AVAILABLE WITH THE BANK. MOREOVER, EVEN IF UNION BANK OFFICIALS HAVE MADE REMARKS ON LETTER DATED 22 /3/2002 (NOT AVAILABLE) OF THE ASSESSING OFFICER TO THEM, REMARKS APPEAR TO HAVE BEEN MAD WITHOUT VERIFYING THE BASIC RECORDS LIKE GODOWN INSPECTION REPORT BUT ONLY ON THE BASIS OF THE 'UNVERIFIED STOCK STATEMENT AS ON 31/3/1999 SIGNED BY THE ASSESSEE' FOR SANCTIONING THE CASH CREDIT LIMIT OF RS. 88 LACS TO THE ASSESSEE. THUS, MATERIAL EVIDENCE FOR CONSIDERATION IS THE STOCK STATEMENT AS ON 31/3/1999 FURNISHED BY THE ASSESSEE TO THE BANK TO AVAIL OF CASH CREDIT LIMITS WHICH FORMED THE BASIS OF ADDITIONS OF RS.1,21,31,700/ - BY WAY OF UNDISCLOSED STOCK AND WHETHER TOE DETAILS SUBMITTED IN IT WERE CORRECT OR NOT. 4.1.3 THUS, FACTS THAT EMERGED OUT OF ASSESSEE'S SUBMISSIONS AND DISCUSSIONS MADE ABOVE ARE AS FOLLOWS: 1) ASSESSEE WAS NOT GIVEN AN OPPORTUNITY TO FURNISH AN EXPLANATION AND CROSS EXAMINE THE BANK OFFICIALS ON WHOSE CERTIFICATES OF VERIFICATION, THE ASSESSING OFFICER RELIED AND MADE ADDITION OF RS. 1,21,31,700 / - BY WAY OF UNDISCLOSED STOCK. ' 2) BANK HAD SANCTIONED CASH CREDIT LIMITS ON HYPOTHEC ATION OF STOCK AND SINCE THE DRAWING POWER LIMITS WERE FIXED ON THE BASIS OF STOCK - IN - TRADE THE ASSESSEE HAD INFLATED FIGURES OF STOCK IN TRADE 3) ASSESSEE HAD MENTIONED A HYPOTHETICAL QUANTITY TO AVAIL OF HIGHER CASH CREDIT FACILITY AND THE BANK NEITHER HAD THE CONTROL OVER THE MOVEMENT OF STOCK NOR HAD EVER VERIFIED THE STOCK STATEMENT/NOR CORRELATED THE STOCK QUANTITY WITH PURCHASES AND SALES . 4) ASSESSEE HAD MAINTAINED PROPER BOOKS OF ACCOUNT 5) COPY OF THE VERIFICATION REPORT PREPARED OUT BY THE BANK WAS NEVER GIVEN, 6) SALES TAX AUTHORITIES HAD SUBJECTED ASSESSEE'S CASE TO DEEP SCRUTINY AND ASSESSMENTS WERE FINALIZED BY THEM WITHOUT POINTING OUT ANY DISCREPANCY, 7) ASSESSEE HAD ADOPTED THE CLOSING FIGURE OF STOCK OF RS. 1,59,300/ - AS ON 31/3/1999 AS THE OPENING FIGURE OF STOCK AS ON 01/4/1999 WHILE PREPARING THE P&L ACCOUNT FOR THE YEAR ENDED 31/3/2000 RELEVANT TO AY 2000 - 01, 6 ITA NO S . 553 & 5815/M / 14 (A.Y. 1999 - 2000) ITO VS. SHRI MANOJKUMAR BERIWAL 8) ULTIMATELY, THE ADVANCES GIVEN BY THE BANK TO THE ASSESSEE WERE TREATED AS NPA, THAT IS, NON PERFOR MING ASSETS AND THE BUSINESS WAS CLOSED BY THE ASSESSEE AND AT THAT TIME NO SUCH STOCK WAS FOU ND BY THE BANK AUTHORITIES ON THE BASIS OF WHICH ADDITIONS WERE MADE AND FINALLY A ONE TIME SETTLEMENT WAS ARRIVED AT WITH THE BANK WHICH WAS HONORED BY THE ASSES SEE BY SELLING HIS MORTGAGED PROPERTY. 4.1.4 ALL THESE FACTS CLEARLY POINT OUT THAT ASSESSEE INFLATED FIGURES OF CLOSING STOCK IN TRADE AS ON 31/3/1999 TO AVAIL OF/CONTINUE WITH THE CASH CREDIT FACILITY FROM THE UNION BANK OF INDIA, S.T. ROAD, MUMBAI BRA NCH AND FURNISHED A FALSE STATEMENT OF STOCK AS ON 31/3/1999 TO THE BANK AND THIS STOCK STATEMENT WAS NOT VERIFIED/INSPECTED BY THE BANK OFFICIALS AT THE TIME OF GRANTING/ALLOWING/CONTINUING THE CASH CREDIT FACILITY TO THE ASSESSEE. ASSESSING OFFICER HAD S PECIFICALLY RELIED ON THIS STATEMENT OF INFLATED STOCK OF GOODS AS ON 31/3/1999 FURNISHED BY THE ASSESSEE TO THE BANK AND MADE ADDITIONS OF RS. 1,21,31,700/ - BY WAY OF UNDISCLOSED STOCK IN THE ASSESSMENT ORDER. LASTLY, THE AR'S RELIANCE ON THE CASE LAWS ES PECIALLY THE JUDGMENTS IN THE CASE OF OT VS. LAXMI ENGINEERS INDUSTRIES 308 ITR 27 HIGH COURT OF RAJASTHAN AND CTT VS. VERRDIP ROLLERS (P) LTD. 323 ITR 34, (GUJ.), APPEARS TO BE APPLICABLE TO THE ASSESSEE'S CASE. THE GIST OF THE DECISION OF VEERDIP ROLLER S (P) LTD. (SUPRA) IS AS UNDER: - 'ADDITION WAS MADE UNDER SECTION 69B OF THE INCOME TAX ACT, 1961, ON THE ACCOUNT OF DIFFERENCE BETWEEN THE CLOSING STOCK FURNISHED IN A STATEMENT TO THE BANK FOR AVAILING OF CREDIT FACILITY AND THAT SHOWN IN THE BOOKS OF ACCOUNT FURNISHED BEFORE THE INCOME - TAX AUTHORITIES. THE TRIBUNAL DELETED THE ADDITION ON THE GROUND THAT THE STATEMENT SUBMITTED BY THE ASSESSEE TO THE BANK WAS ON ESTIMATE BASIS AND THE VALUE OF THE STOCK WAS INFLATED TO AVAIL OF GREATER CREDIT FROM THE BANK AND THAT THERE WAS NO JUSTIFICATION FOR MAKING ANY ADDITION ON THE ALLEGATION OF INFLATED STOCK SHOWN TO BANK. ON APPEAL: - HELD, DISMISSING THE APPEAL, THAT THE TRIBUNAL HAD CONSIDERED WHETHER THE ISSUE OF STOCK SHOWN IN THE BOOKS OF ACCOUNT WAS GENU INE OR NOT AND THERE WAS NO REASON TO HOLD THAT THE FINDING OF THE TRIBUNAL WAS PERVERSE. [THE SUPREME COURT HAS DISMISSED THE SPECIAL LEAVE PETITION FILED BY THE DEPARTMENT AGAINST THIS JUDGMENT: SEE (2008) 307 ITR (ST.) 3]'. IT IS SEEN FROM THE ABOVE DECISION OF THE HON'BLE HIGH COURT OF GUJARAT (SLP FILED BY THE DEPT WAS DISMISSED BY HON'BLE SUPREME COURT 'THAT THE 'FACT 7 ITA NO S . 553 & 5815/M / 14 (A.Y. 1999 - 2000) ITO VS. SHRI MANOJKUMAR BERIWAL OF THE ASSESSEES CASE ARE SIMILAR, AS IN THE ASSESSEE'S CASE ALSO THE PHYSICAL VERIFICATION OF STOCK HYPOTHECATED TO THE BANK WAS N OT VERIFIED AND IN THE LIGHT OF THIS, I HOLD THAT THE ABOVE DECISION OF THE HON'BLE HIGH COURT IS APPLICABLE TO THE ASSESSEE'S CASE. FOLLOWING THE ABOVE DECISIONS AND ALSO IN VIEW OF THE FACTS OF THE CASE AND AFTER GOING THROUGH ALL THE WRITTEN SUBMISSIONS , I AM OF THE OPINION THAT THE ADDITIONS OF RS. 1,21,31,700/ - IN R ESPECT OF UNDISCLOSED STOCK MADE ON THE BASIS OF INFLATED STOCK STATEMENT FURNISHE D BY THE ASSESSEE TO AVAIL OF CASH CREDIT FACILITY WAS NOT JUSTIFIED AND THE/ SAME IS/HEREBY DELETED. ASSESSE E'S GROUND OF APPEAL IS ALLOWED ON THIS GROU ND. 10. WE NOTICE THAT THE ASSESSEE HAD MENTIONED QUANTITY OF STOCK TO AVAIL HIGHER CASH CREDIT FACILITY. THE BANK HAD NEVER VERIFIED STOCK STATEMENTS AS IT HAD NO CONTROL OVER THE MOMENT OF STOCK. THE ADVANCES GIVEN BY THE BANK TO THE ASSESSEE WERE TREATED AS NPA AND THE BUSINESS WAS CLOSED BY THE ASSESSEE AND AT THAT TIME NO STOCK WAS FOUND BY THE BANK AUTHORITIES. THE ASSESSEE HAS DEMONSTRATED BEFORE THE LD. CIT(A) THAT INFLATED STOCK STATEMENT WAS SUBMITTED TO THE BANK IN ORDER TO AVAIL CREDIT FACILITIES. IN OUR CONSIDERED OPINION, THE FINDINGS OF THE LD. CIT(A) IS BASED ON EVIDENCE ON RECORD AND THE PRINCIPLES OF LAW LAID DOWN BY THE HONBLE GUJARAT HIGH COURT IN CIT VS. VERRDIP ROLLERS (P) LTD (SUPRA). IN OUR CONSIDERED OPINION THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITION MADE BY THE AO ON THE BASIS OF THE COMMUNICATION RECEIVED FROM THE BANK DISCUSSED ABOVE. HENCE, W E DO NOT FIND ANY INFIRMITY IN THE IMPUGNED ORDER TO INTERFERE WITH THE SAME . WE, THER EFORE, UPHOLD THE SAID ORDER AND DISMISS THE APPEAL OF THE REVENUE. ITA NO . 5815/MUM/2014 11. THE REVENUE HAS CHALLENGED THE APPELLATE ORDER PASSED BY THE LD. CIT(A) , WHEREBY THE LD. C IT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE AND DELETED THE PENALTY L EVIED U/S. 271(1)(C) OF THE AC T ON THE GROUND THAT THE ADDITION HAS BEEN DELETED IN THE QUANTUM OF APPEAL. THE DEPARTMENT HAS CHALLENGED THE IMPUGNED ORDER ON THE FOLLOWING EFFECTIVE GROUNDS: 8 ITA NO S . 553 & 5815/M / 14 (A.Y. 1999 - 2000) ITO VS. SHRI MANOJKUMAR BERIWAL 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY LEVIED U/S.271(1)(C) OF THE I T ACT, 1961, BY HOLDING THAT THE QUANTUM ADDITION IS DELETED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE PENAL TY LEVIED U/S.271(1)(C) OF THE IT ACT, 1961, WITHOUT APPRECIATING THE FACT THAT DEPARTMENT IS IN APPEAL BEFORE THE HON I TAT WITH REGARD TO THE QUANTUM ADDITION DELETED. 12. SINCE, WE HAVE UPHELD THE ORDER OF THE LD. CIT(A) PASSED IN QUANTUM APPEAL, WHEREB Y THE LD. CIT(A) HAS DELETED THE ADDITION MADE BY THE A.O., T HE PENALTY APPEAL DOES NOT SURVIVE. HENCE, WE DISMISS THE APPEAL FILED BY THE REVENUE AND UPHOLD THE ORDER PASSED BY THE LD. CIT(A) IN PENALTY APPEAL . 13. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH SEPT.2017 SD/ - SD/ - ( G. S. PANNU ) ( RAM LAL NEGI ) / A CCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 13.09.17 . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) 9 ITA NO S . 553 & 5815/M / 14 (A.Y. 1999 - 2000) ITO VS. SHRI MANOJKUMAR BERIWAL , / ITAT, MUMBAI