2019 (8) TMI 926 - AT - Income Tax

Penalty u/s 271(1)(c) - addition made on account of disallowance towards the provision for standard assets as well as in respect of disallowance of capital loss - HELD THAT - In view of the facts that the addition itself was deleted by the Tribunal in the quantum appeal the penalty levied by the AO u/s 271(1)(c) of the Act would not survive. - Decided in favour of assessee.

Summary

Issues:
Penalty under section 271(1)(c) for disallowance of provision for standard assets and capital loss.

Analysis:
The appeal by the Revenue challenged the penalty order passed under section 271(1)(c) of the Income Tax Act for the assessment year 2012-13. The Revenue raised grounds regarding the cancellation of penalty for disallowance of provision for standard assets and capital loss. The CIT(A) deleted the penalty for the provision for standard assets disallowance as the Tribunal had already deleted the addition in the quantum appeal. However, the penalty for the capital loss disallowance was confirmed by the CIT(A). The Tribunal upheld the CIT(A)'s decision regarding the provision for standard assets disallowance as the addition was deleted in the quantum appeal, rendering the penalty unjustified. The Tribunal referred to previous orders where similar issues were decided in favor of the assessee, leading to the cancellation of the penalty. The Tribunal found no error in the CIT(A)'s decision regarding the provision for standard assets disallowance and dismissed the Revenue's appeal.

In conclusion, the Tribunal upheld the deletion of the penalty for the provision for standard assets disallowance as the addition was already deleted in the quantum appeal. The penalty for capital loss disallowance was confirmed as the assessee admitted to filing inaccurate particulars. The Tribunal referred to previous orders where similar issues were decided in favor of the assessee, leading to the cancellation of penalties. The Tribunal found no error in the CIT(A)'s decision and dismissed the Revenue's appeal.