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M/s Moderate Leasing and Capital Services Ltd. Versus DCIT, Circle 5 (1) , New Delhi

2016 (1) TMI 1030 - ITAT DELHI

Penalty u/s. 271(1)(c) - Held that:- The assessee has not furnished inaccurate particulars of income or concealed the income and there are no findings of the Assessing Officer and the CIT (Appeals) that the details furnished by the assessee in his return are found to be inaccurate or erroneous or false. Under these circumstances, in our view the penalty in dispute is totally unwarranted and deserve to be deleted. Accordingly, we delete the penalty made u/s. 271(1)(c) of the I.T. Act and cancel t .....

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05 on the following grounds:- 1. That on the facts and in law imposing the penalty under section 271(1)(c) for ₹ 50,00,000/- is totally wrong, unjustified and illegal. The appellant company had never furnished any inaccurate particulars at any stage of assessment proceedings as well in penalty proceedings. As the Hon ble ITAT has already allowed the quantum appeal in favour of appellant company. The penalty imposed u/s. 271(1)© be deleted in full. 2. That the appellant company craves .....

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body of the assessment order. Against the said assessment order, assessee appealed before the Ld. CIT(A), who vide impugned order 3.5.2006 dismissed the appeal of the assessee. Aggrieved with, in the first round assessee came up before the Tribunal in the quantum appeal which was decided in favour of the Assessee in ITA No. 2701/Del/2006 vide order dated 6.3.2009 by holding that the transaction was on revenue account and, therefore, the assessee is entitled to deduct the loss from its business .....

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n the penalty proceedings vide his order dated 31.3.2008 has imposed the minimum penalty of ₹ 50,00,000/- u/s. 271(1)(c) of the I.T. Act, 1961. Ld. CIT(A) in appeal has upheld the penalty of ₹ 50,00,000/- vide his order 2.1.2009. Aggrieved, the Department preferred an appeal before the ITAT and the ITAT vide order dated 3.6.2009 deleted the penalty by holding that as the addition which forms the basis of imposing of penalty by the AO has been deleted by the ITAT impugned penalty amou .....

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as the order of the tribunal in the quantum proceedings has been set aside by this Court in judgment dated 18.11.2011 passed in CIT-II vs. Moderate Leaving and Capital Services Ltd. for assessment year 2004-05. In view of the statement made by the counsel for the parties, following substantial question of law is framed:- Whether the Income Tax Appellate Tribunal was right in deleting penalty under section 271(1)(c) of the Income Tax Act, 1961 in view of the order passed in quantum proceedings?? .....

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sel for the assessee has filed a Paper Book-I containing pages 1 to 31 having the copy of the assessment order u/s. 143(3) dated 30.9.2005; copy of the Ld. CIT(A) order dated 3.5.2006 (Quantum); Copy of Hon ble High Court of Delhi order dated 18.11.2011 (Quantum); ITAT order dated 3.6.2009 (Penalty) and the Hon ble High Court of Delhi order dated 6.2.2012 (Penalty). He also filed the copy of the Brief Synopsis and firstly stated that no penalty on debatable issue and in a case of difference of o .....

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the penalty in dispute may be deleted. 5. Ld. Departmental Representative controverted the arguments advanced by the Ld. Counsel of the assessee and he relied upon the orders of the revenue authorities and stated that since the Hon ble High Court of Delhi vide its order dated 18.11.2011 in quantum appeal has allowed the Appeal in favor of the Revenue and against the assessee holding that the shares in question were held as investments and loss on the sale thereof was capital loss and not Revenue .....

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ppeal, restored back to ITAT for deciding on merits, as the quantum was sustained by the Hon ble High Court. 6.1 We are not in agreement with the contention of the Ld. DR that since the quantum appeal has been decided by the High Court of Delhi in favour of the Revenue, the penalty may be sustained. Because the mere fact that an addition is confirmed in quantum proceedings cannot be conclusive of the imposition of penalty. The Hon ble Calcutta High Court in Durga Kamal Rice Mill vs. CIT (2004) 2 .....

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loss and was allowed. Accordingly, in AY 2004-05 also, assessee bonafidely claimed the loss as a revenue loss. He submitted this also shows that the claim was totally bonafidely, but the Tribunal was also of the view that the said is capital loss. From the above, it is established that since the claim made bonafidely, but disallowed is not a situation of concealment of income. To support this view, we draw support from the decision of the Hon'ble CIT vs. Reliance Petroproducts Pvt. Ltd. (201 .....

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inaccurate particulars of income. As the assessee has furnished all the details of its expenditure as well as income in its return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the authorities to accept its claim in the return or not. Merely, because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, in our opinion, attra .....

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