2019 (10) TMI 627

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....he revenue has assailed the impugned order on the following grounds of appeal: "On the facts and in the circumstances of the case and in law, Ld. CIT(A) has erred in deleting the penalty u/s 271(1)(c) of the Income Tax Act 1961 of Rs. 5,80,68,203/-, even though the appeal against the order, deleting quantum addition for A.Y. 2002-03 is pending before Hon'ble Bombay High Court." 2. Briefly stated, the assessee company which is engaged in the business of trading in shares and securities had filed its return of income for A.Y. 2002-03, declaring a loss of (-) Rs. 15,82,97,470/-. Subsequently, the income of the assessee was assessed by the A.O under Sec. 143(3), vide his order dated 30.03.2005 at an income of Rs. 58,320/- . In the c....

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....d the assessment in appeal before the CIT(A), who vide his order dated 10.01.2008 upheld the disallowance of the business loss of Rs. 3,67,28,998/- and interest expenditure of Rs. 12,12,79,721/- that was made by the A.O while framing the assessment. In the meantime, the A.O had vide his order passed under Sec. 271(1)(c), dated 23.12.2008 had imposed a penalty of Rs. 5,80,68,203/- on the assessee. 4. Aggrieved, the assessee assailed the penalty imposed by the A.O under Sec. 271(1)(c) before the CIT(A). The CIT(A) vide his order dated 21.05.2009 dismissed the appeal of the assessee and upheld the penalty levied by the A.O. During the appellate proceedings, it was observed by the CIT(A) that the assessee despite having been afforded opportu....

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....) deleted the penalty of Rs. 5,80,68,203/- that was imposed by the A.O under Sec. 271(1)(c) of the Act. 7. The revenue being aggrieved with the vacating of the penalty imposed by the A.O under Sec.271(1)(c) on the part of the CIT(A), has carried the matter in appeal before us. The ld. Authorized Representative (for short 'A.R') for the assessee at the very outset of the hearing of the hearing of the appeal submitted, that as the quantum additions forming the very basis for the imposition of penalty under Sec.271(1)(c) had been deleted by the Tribunal, vide its order passed in Saimangal Investrade Ltd. Vs. ACIT, Central Circle-40, Mumbai, (ITA No. 848/Mum/2008, dated 25.07.2012), therefore, the CIT(A) rightly taking cognizance of the said....

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....concerned the borrowals have taken place in earlier years and as per the statements there were no fresh borrowals during the year from the said Madhavpura Mercantile Co-op Bank Ltd (MMCB). The assessee also provided interest only for a part of the year upto 30th September 2001, and as seen from the notes to the accounts Debt Recovery Tribunal has passed certain orders preventing the assessee creating rights of liability. May be keeping in view of the order the assessee has not provided the amount in the books of account but left a note in B-4 of Schedule J in the annual accounts that so much of the amount has not been provided for. Not only that assessee also placed account copy of the MMCB indicating that the amount chargeable for the peri....

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....e reassessment under section 143(3) r.w.s 147 for A.Y. 2001-02 dated 15.12.2008, allowed the entire amount of Rs. 11.68 crores as a deduction for the purpose of business. Vide para 4&5 of the assessment order, while considering certain amounts for disallowance, considered the entire claim of Rs. 11.68 crores (Rs. 6.66 crores debited to P & L Account & Rs. 5.02 crores claimed in the computation of income) and proportionately disallowed an amount of Rs. 5.97 crores under section 36(1)(iii). This order of the A.O. placed on record indicates that the assesse's liability to pay interest was an ascertained liability and is allowable. Keeping in mind the fact that the A.O. in the reassessment proceedings also allowed the amount similarly ....