9911796707
TMI Blog2013 (11) TMI 840X X X X Extracts X X X X X X X X Extracts X X X X ..... itted vide order dated 7.5.2012 on the following substantial questions of law: - "1. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was legally correct in directing the Assessing Officer to delete the penalty under section 271(1)(c) of the Income Tax Act, 1961 and refund the amount of penalty, if any collected? 2. Whether on the facts and the circumstances of the case, the Income Tax Appellate Tribunal was legally correct in coming to the conclusion that the Assessing Officer had accepted the assessee's request contained in its letter dated 24.3.1992 for non-levy of penalty under section 271(1)(c) of the Income Tax Act, 1961? 3. Whether on the facts and the circumstances of the case, the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been received by them. The confirmatory letters were scrutinized and a number of defects regarding the new loans and shareholders, were found in them. As the assessment was getting barred by limitation and the assessee was unable to produce the necessary documentary evidence, vis-a-vis, the capacity of the shareholders and the depositors to the full extent in order to buy peace and to avoid litigation, by the letter dated 24.3.1992, the assessee filed a revised return and surrendered the share capital to the extent of Rs. 8,62,000/- and unsecured loans of Rs. 3,61,100/-. Depreciation amounting to Rs. 24,62,390/- was also claimed. Thus, a net loss of Rs. 13,87,540/- was shown in the revised return. The loss as declared in the revised r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter entering into some kind of agreement with the AO, therefore, there is no question of any concealment of income or particulars on the part of appellant-assessee, for which penalty could be levied. Moreover, in view of Delhi High Court judgment reported in 240 ITR 880 merely because the appellant-assessee was unable to produce creditors and the shareholders and the amount was surrendered, the penalty of concealment cannot be sustained. In view of the facts and circumstances and the case law, we direct the AO to delete the penalty and refund the amount of penalty if collected any." We have heard Sri Shambhu Chopra, learned Senior Standing Counsel for the Revenue and Sri S.K. Garg, learned counsel appearing for the respondent - assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 216 CTR (SC) 195, the subscription made by the various shareholders in the share capital of a company cannot be taxed at the hand of the company and can only be taxed at the hands of the shareholder under Section 69 of the Act.
That being the position, factually, failure of the assessee in proving the capacity of the various shareholders to invest in the share capital, could not have been a ground for initiating penalty proceedings. This fact also establishes the bonafide of the assessee.
In view of the aforesaid discussion, we are of the considered opinion that the Tribunal had rightly deleted the penalty. The impugned order does not suffer from any legal infirmity.
The appeal fails and is dismissed. X X X X Extracts X X X X X X X X Extracts X X X X
|
