The Delhi ITAT while giving relief to Oriental Insurance deleted the income tax additions.
The penalty was imposed on the assessee, Oriental Insurance. The roots for the levy of penalty lie in the assessment order dated 13.01.2014 framed under section 143(3) of the Income Tax Act wherein the various additions were made such as profit on sale of investment, interest income not provided as income, disallowance of depreciation under section 32, disallowance u/s. 14A and disallowance of guest house expenses.
The penalty proceedings were separately initiated and penalty were levied accordingly on the additions sustained.
All the quantum additions have been deleted by this Tribunal, therefore, the penalty does not have any legs to stand.
The ITAT said, “a careful perusal of the order of the Tribunal shows that the quantum additions have been deleted. However, we find that the issue relating to the disallowance of depreciation has been set aside to the files of the AO, therefore, to this extent the AO is directed to decide the issue of levy of penalty after deciding the quantum…..Since all other additions have been deleted we do not find any merit in the levy of penalty u/s. 271 (1) (c) of the Act.”
Case Title: Oriental Insurance Versus DCIT