Case Law Details
DCIT Vs Milan Kavin Parikh (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT) Mumbai recently dealt with an appeal filed by the Revenue against the deletion of penalty under Section 271(1)(c) of the Income Tax Act, 1961, in relation to assessment year 2006-07, concerning Mr. Milan Kavin Parikh.
The appellant, a director in Mahendra Brothers Exports Pvt. Ltd., was alleged to be a beneficial owner of undisclosed overseas bank accounts based on information received from the French Government. Following a search and seizure action, the Assessing Officer made an addition of Rs. 27,99,45,729/- on account of peak credit in HSBC Bank. Subsequently, a penalty was levied under Section 271(1)(c) of the Act.
However, during the assessment proceedings, the ITAT Mumbai allowed the appeals of the assessee, deleting the entire quantum addition. Consequently, the penalty levied under Section 271(1)(c) of the Act was challenged.
The ITAT, noting that the entire addition made by the Assessing Officer was deleted, held that the penalty does not survive when the quantum addition itself is deleted. Therefore, the penalty was deemed unsustainable and rightly cancelled by the Commissioner of Income Tax (Appeals).
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