2014 (1) TMI 810

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....antial question of law:         "Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in cancelling the penalty of Rs.7,12,000/- imposed by the Assessing Officer u/s. 158BFA(2) of the Act?" 2. That there was a search operation u/s. 132(1) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') in the Mahendra S. Vyas Group on 31.03.1999. During the course of search at the business and residential premises of Shri Mahendra S. Vyas and Shri Allarakha I. Vohra, a large number of incriminating documents were seized which showed that these two persons were having running loan account with Shri Hitul K. Patel (the assessee herein), proprietor of M/s. A....

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....ench i.e. ITAT Ahmedabad Bench (SMC) in the case of M/s. M.M. Finance, Anand v. ACIT (IN IT(ss)A NO.258/Ahd/2005) dated 19.05.2006), the learned ITAT has allowed the said appeal and directed to delete the penalty imposed u/s 158BFA(2) of the Act. 5. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned ITAT, Revenue has preferred present Tax Appeal to consider the following substantial question of law:         "Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in cancelling the penalty of Rs.7,12,000/- imposed by the Assessing Officer u/s. 158BFA(2) of the Act?" 6. Heard Shri Bhatt, learned Senior Counsel appearing o....