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2016 (4) TMI 810 - ITAT MUMBAI

2016 (4) TMI 810 - ITAT MUMBAI - TMI - Penalty u/s. 271(1)(c) - disallowance of capital loss, pertaining to receipt arising out of sale of research and development of capital assets - Held that:- On this issue the Hon'ble Bombay High Court, in quantum, has admitted the substantial question of law as noted above. In view of these facts, we find that the issue is squarely covered by the decision of the jurisdictional High Court in assessee's own case and also of Hon'ble Delhi High Court in the cas .....

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n'ble High Court admits the substantial question of law in quantum appeal of the assessee, that itself shows that the issue is debatable and for that reason penalty u/s. 271(1)(c) of the Act cannot be levied. - Decided in favour of assessee. - ITA No. 1316/Mum/2014 - Dated:- 7-4-2016 - R. C. Sharma, AM And Mahavir Singh, JM For the Appellant : Shri H P Mahajani For the Respondent : Shri Sanjeev Jain ORDER Per Mahavir Singh, JM This appeal by assessee is arising out of order of CIT(A)-5, Mumbai i .....

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of the Act. The assessee has raised following three grounds: '1. On the facts and in the circumstances of the case and in law the learned CIT(A) erred in confirming penalty of ₹ 64.82.653/- u/s 271(1)(c) of the Act levied by the Assessing Officer. The learned CIT(A) ought to have accepted the contention of the Appellant that it had neither furnished inaccurate particulars of its income nor concealed its income and that, at the highest, the subject matter of rejection of claim was a ca .....

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d be set off only against long term capital gains having tax liability @ 20% and not 35%. In any event therefore, the amount of penalty levied by learned Assessing Officer needs be reduced pro tanto.' 3. At the outset, the ld. Counsel for the assessee stated that the quantum appeal u/s. 260A of the Act has been admitted by the Hon'ble Bombay High Court in ITA No. 1289 of 2012 dated 08.3.2013, wherein the issue of disallowance of capital loss, pertaining to receipt arising out of sale of .....

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mp; D) capital assets?' 3. The learned counsel of the assessee also relied upon the judgment of the Hon'ble Bombay High Court in the case of CIT vs. Indusind Bank Ltd. in Income Tax Appeal No. 1293 of 2012 wherein the Hon'ble High Court has accepted the proposition that wherever substantial question of law is admitted, the Tribunal was right in deleting the penalty levied by AO on disallowance of depreciation on lease transactions. The Hon'ble High Court, vide order dated 24.09.2 .....

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are genuine transactions and made by the Assessee was not accepted by the Revenue. However, the Assessee persisted and claimed depreciation in the assessment year in question as well. The Commissioner as also the Tribunal found that there is no concealment of particulars of income nor furnishing of inaccurate particulars of income for the assessment year. 3] The argument of Mr. Vimal Gupta is that when such was the stand of the department, the Assessee approached the Settlement Commission durin .....

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le with the department/Revenue. There was no concealment nor the particulars have been termed as inaccurate and for the subject assessment year. It is on these findings that the penalty has been deleted. Pertinently, it has been deleted also Qua other claims but the Revenue raised deletion of penalty on lease transaction as the only substantial question of law. For all these reasons, we do not find that the Tribunal's order is either perverse or vitiated by any error of law apparent on the f .....

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4A of the Act was a datable issue. We may also note that against the quantum assessment where under deduction under section 14A of the Act was prescribed to the assessee, the assessee has preferred an appeal in this Court under section 260A of the Act which has also been admitted and substantial question of law framed. This itself shows that the issue is debatable. For these reasons, we are of the opinion that no question of law arises in the present case." 4. On the other hand, the Ld. CIT .....

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ble, as held by the Tribunal in the impugned order. No doubt, appeal was admitted. However, the Tribunal has glossed over a very important and fundamental fact. In quantum proceedings, appeal filed by the assessee i.e. ITA 662/2009 came up for admission on 16 th September, 2009. On the same date, appeal was admitted, arguments heard and orders were dictated in the Court dismissing the appeal there and then. In this factual backdrop, when order of the Assessing Officer in quantum proceedings was .....

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'ble High Court. Hon'ble High Court held as under: "8. Identical question came to be considered by the Division Bench of this Court in Tax Appeal No.606/23010 and in paragraph 10 to 13 the Division Bench of this Court has observed as under and has quashed and set aside the order of the tribunal deleting the penalty on the aforesaid ground and has remanded the matter to the tribunal to consider the appeal afresh in accordance with law and on its own merits. "10. Having, thus, he .....

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eleting the penalty on this sole ground. Admission of a Tax Appeal by the High Court, in majority cases, is ex- parte and without recording even prima facie reasons. Whether ex-parte or after by-parte hearing, unless some other intention clearly emerges from the order itself, admission of a Tax Appeal by the High Court only indicates the Court's opinion that the issue presented before it required further consideration. It is an indication of the opinion of the High Court that there is a prim .....

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t. In other words, unless there is any indication in the order of admission passed by the High Court simply because the Tax Appeal is admitted, would give rise to the presumption that the issue is debatable and that therefore, penalty should be deleted. 12. This is not to suggest that no such intention can be gathered from the order of Court even if so expressed either explicitly or in implied terms. This is also not to suggest that in no case, admission of a Tax Appeal would be a relevant facto .....

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e. Order of the Tribunal, therefore, cannot be sustained. Question framed is answered in favour of the Revenue and against the assessee. Order of the Tribunal is reversed. Since apparently the assessee had raised other contentions also in support of the appeal before the Tribunal, the proceedings are remanded before the Tribunal for fresh consideration and disposal in accordance with law. Tax Appeal is disposed of accordingly." In view of these case laws the Ld. CIT, DR stated that the pena .....

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