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2017 (1) TMI 1212 - ITAT MUMBAILevy of penalty u/s 271(1)(c) - payment of compensation to investors - claim of compensation paid by the assessee to the investors as revenue expenses u/s 37(1) not allowed by the AO - Held that:- We have observed that the assessee is engaged in the business of Asset Management and Portfolio Management and advisory services . Compensation were paid as per acts’ of omission by earlier consultant M/s. Karvy Consultants Limited appointed by the Mutual Fund. These payments are settlement of claims as per SEBI regulations. The AO in quantum assessment disallowed these payments made by the assessee to investors which was later confirmed by learned CIT(A), while the tribunal for assessment year 2007-08, allowed the appeal of the assessee and the quantum additions has been deleted by the tribunal. Thus, in our considered view, since the quantum additions itself have been deleted by the tribunal in assessee’s own case the penalty levied by the A.O. u/s 271(1)(c) and as sustained by learned CIT(A) cannot now be sustained and hence is hereby ordered to be deleted. - Decided in favour of assessee
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