9911796707
TMI Blog2023 (8) TMI 589X X X X Extracts X X X X X X X X Extracts X X X X ..... d 09.07.2019 passed for Assessment Year 2008-09. 2. The Revenue has taken the following grounds of appeal:- "1. The Ld.CIT(A) has erred in law and on facts in deleting the penalty of Rs. 70,80,195/- imposed u/s 271(1)(c) of the Act on the issue of disallowance of claim of Long Term Capital Gain as exempt u/s 10(38) of the Act, treating it as business income of the assessee. 2. On the facts and circumstances of the case, Ld CIT(A) ought to have upheld the order of the Assessing Officer. 3. It is, therefore, prayed that the order of Ld CIT(A) may be set aside and that of the Assessing Officer be restored." 3. This is an appeal filed by the Revenue and the assessee's Cross Objection with respect to order passed by Ld. CIT(A) deleting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the AO at the time of regular assessment which is nothing but change of opinion. To our considered opinion reopening of assessment cannot be initiated in absence of fresh material or based on change of opinion. In holding so we draw support and guidance from the judgment of Hon'ble Supreme Court in the case of PCIT vs. Fibers and Fabrics International (P.) Ltd. reported in 139 taxmann.com 562 where the Hon'ble Supreme Court upheld the following finding of the Hon'ble Karnataka High Court: 11. It is pertinent to mention that no material was gathered in the survey proceeding to suggest that expenditure incurred towards sales commission is not an allowable expenditure and disallowance made in respect of the expenditure for the subsequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eby allowed. 9.2 As the assessee succeeds on the technical ground raised by it in cross objection, we do not find any reason to give independent finding on objection raised by it in the memo of appeal on merit. As such, the other objection raised by the assessee becomes infructuous and therefore we dismiss the same." 6. We observe that the ITAT Ahmedabad in assessee's own case has deleted the quantum additions in favour of the assessee. Accordingly, since the very basis/foundation on which penalty u/s 271(1)(c) of the Act had been levied on the assessee itself has been vacated, then the consequential penalty imposed u/s 271(1)(c) of the Act is also liable to be vacated. 7. In the case of CIT v Shah Alloys 35 taxmann.com 532 (Gujarat), t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) could be levied. In the case of CIT v. Shishpal 126 Taxman 5 (Rajasthan), addition was made as unexplained investment under section 69 and penalty was imposed under section 271(1)(c).The aforesaid addition was deleted in quantum appeal. The High Court held that since the very foundation for imposition of penalty had become non-existent, penalty would not survive. In the case of ITO v. Magic software Enterprises India (P.) Ltd. 101 taxmann.com 53 (Pune - Trib.) where AO passed penalty order under sec. 271(1)c) on basis of transfer pricing adjustment made by TPO, in view of fact that assumption of jurisdiction by TPO was held invalid by Tribunal and, as a result, quantum addition was also deleted, impugned penalty order had no legs to sta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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