TMI Blog2015 (9) TMI 269X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings. The assessment or reassessment cannot be declared as invalid in the penalty proceedings - Penalty deleted - Decided in favour of assessee. - ITA No: 2047/Del/2013 - - - Dated:- 7-8-2015 - SHRI G.C. GUPTA AND SHRI J.SUDHAKAR REDDY, JJ. For The Appellant by : Ms. Ruchika Jain, CA For The Respondent by :Shri J.P. Chandrekar, Sr. DR ORDER PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER This is an appeal filed by the assessee directed against the order of Ld. CIT(A)XXIII, New Delhi dated 4.1.2013 for the assessment year 2001-02. The assessee has two proprietorship concerns. These are M/s. Highlight Fashions and M/s. Global Investment. In the profit and loss account of M/s. Global Investment, the assessee disclosed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particulars of income. Aggrieved the assessee carried the matter in appeal without success. Further aggrieved the assessee is in appeal before us on the following grounds :- 1. Under the facts and circumstances of the case, the order passed by the Ld. Commissioner of Income Tax (Appeals)-XXIII confirming the penalty u/s 271(1)(c) amounting to ₹ 3,81,670/- levied by the Ld. Assessing Officer i grossly injudicious, unwarranted and bad in law. 2. Under the facts and circumstances of the case, the penalty of ₹ 3,81,670/-levied by the Ld. Assessing Authority under the provisions of section 271(1)(c) of the Act is grossly injudicious, unwarranted and bad in law as the appellant has neither concealed the particulars of its in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri J.P. Chandrekar on the other hand relied on the order of the AO as well as the first appellate authority and submitted that the assessee has deliberately claimed short term capital loss as a business loss and has deliberately disclosed income which is assessable under the head income from other sources as income from business and made a wrong claim of expenditure. He submitted that the ITAT, in the quantum proceedings, has confirmed the disallowance amounting to ₹ 11,35,925/- and deleted the disallowance of ₹ 4,22,797/-. The disallowance of claim of loss of ₹ 4,08,119/- on account of purchase and sale of shares was confirmed by the ITAT. He submitted that the assessee had only commission income of ₹ 39,029/- by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... volvement. It was submitted that experienced people with expert knowledge were employed to make investment decisions, so that the income of the assessee could be maximised . 9. When these submissions are considered and the decision of the AO as confirmed by the appellate authorities are looked into, we are of the considered opinion that the issues in question are debatable. It is not the case of the revenue that the expenditure claimed is false or fabricated. Under these circumstances, we are of the considered opinion that the explanation given by the assessee is bonafide. The penalty can be levied on additions which are debatable. In the case of CIT Vs. Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565 the Hon ble High Court h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n constitute concealment because of deeming provision. (g) Even if these conditions do not exist in the assessment order passed, at least, a direction to initiate proceedings under Section 271(1)(c) is a sine qua non for the Assessment Officer to initiate the proceedings because of the deeming provision contained in Section 1 (B). (h) The said deeming provisions are not applicable to the orders passed by the Commissioner of Appeals and the Commissioner. (i) The imposition of penalty is not automatic. (j) Imposition of penalty even if the tax liability is admitted is not automatic. (k) Even if the assessee has not challenged the order of assessment levying tax and interest and has paid tax and interest that by itself would not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culars of income (q) Sending printed form where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law. (r) The assessee should know the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended. On the basis of such proceedings, no penalty could be imposed to the assessee. (s) Taking up of penalty proceedings on one limb and finding the assessee guilty of another limb is bad in law. (t) The penalty proceedings are distinct from the assessment proceedings. The proceedings for imposition of penalty though emanate from proceedings of assessment, it is independent and separate aspect of the proceedings. (u) The findings recorded in the assessment procee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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