2013 (5) TMI 1031 - AT - Income Tax

Summary

Issues involved: Appeal against deletion of penalty u/s 271(1)(c) of the IT Act, 1961 by CIT (A) for assessment year 1992-93.

Facts: The assessee declared total income of Rs.NIL, but AO determined income at &8377; 77,06,610/- after noticing transfer of equity shares to Ameen Trading Corporation. AO held Long Term Capital Gains assessable to tax in 1992-93, with concealed income of &8377; 1,25,91,184/-. Penalty of &8377; 44,31,300/- u/s 271(1)(c) was levied by AO, which was deleted by CIT (A) based on ITAT's deletion of quantum additions in favor of the assessee.

CIT (A) Decision: CIT (A) deleted the penalty as the Tribunal had deleted the additions on merits, stating that no ground for penalty existed after ITAT's decision. Grounds raised by the revenue indicated relief to the assessee in quantum appeal, leading to the penalty cancellation.

Tribunal's Analysis: Tribunal noted that the additions were deleted by ITAT on merits, confirming relief to the assessee in the quantum appeal. As there was no dispute on the deletion of additions, the penalty u/s 271(1)(c) was deemed not sustainable. The order of CIT (A) was upheld, and the appeal by the Revenue was dismissed.

Conclusion: The Tribunal dismissed the appeal by the Revenue, upholding the deletion of penalty u/s 271(1)(c) by CIT (A) based on ITAT's decision to delete the quantum additions in favor of the assessee.