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2019 (4) TMI 1525 - AT - Income TaxLevy of penalty u/s 271(1)(c) - Addition u/s 68 read with section 115BBE on account of sale of equity shares - HELD THAT - It is not in dispute that addition made u/s 68 read with section 115BBE on account of sale of equity shares was deleted by the Tribunal vide its order 2019 (1) TMI 1404 - ITAT DELHI . Therefore, the very basis for levy of penalty not surviving the levy of penalty also does not survive. Therefore, delete the levy of penalty on addition made u/s 68 read with section 115BBE of the Act and allow the appeal of assessee.- Appeal of assessee is allowed.
Issues Involved:
Levy of penalty u/s 271(1)(c) of the Act. Analysis: The appeal was filed by the assessee against the order of Ld. CIT(Appeals), Ghaziabad for AY 2014-15, specifically challenging the levy of penalty u/s 271(1)(c) of the Act. The Assessing Officer had initially completed the assessment at an income of &8377; 41,20,100/- by treating the long term capital gain from the sale of shares as unexplained cash credit u/s 68 of the Act. Subsequently, penalty proceedings u/s 271(1)(c) were initiated by the AO. During the appeal proceedings, the CIT(A) observed discrepancies in the income declared by the assessee and enhanced the income by &8377; 10 lakhs, imposing the penalty for failure to substantiate the claim made in the return of income. Upon further appeal, the AR of the assessee argued that the Tribunal had previously deleted the addition made by the AO, thereby challenging the basis for the levy of penalty u/s 271(1)(c). The DR could not counter this submission. The Tribunal had indeed deleted the addition made by the AO on account of the sale of equity shares. Consequently, the basis for the penalty no longer existed, leading to the deletion of the penalty imposed on the assessee. The Tribunal, therefore, allowed the appeal of the assessee, ruling in favor of the assessee and deleting the penalty. In conclusion, the Tribunal found that since the addition made by the AO was deleted in a previous order, the basis for the penalty under section 271(1)(c) no longer existed. As a result, the penalty levied on the assessee was deleted, and the appeal of the assessee was allowed.
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