IN INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER ITA No. 2825/Ahd/2013 Assessment Year : 2009-10 Ashish S. Sharma, ACIT, Prop. Utility Service, Vs Circle-10, 401-402, Nirman House, Ahmedabad B/h.Times of India, Ashram Road, Ahmedabad-380009 PAN : ACZPS 4427 L (Appellant) (Respondent) Assessee by : Shri S.V. Agrawal, AR Revenue by : Shri Satish Solanki, Sr DR Date of Hearing : 18/08/2016 Date of Pr onouncement: 30/09/2016 O R D E R This appeal by assessee is directed against order of Commissioner of Income-Tax (Appeals)-XVI, Ahmedabad dated 23.09.2013 for AY 2009-10. 2. solitary ground raised is as under :- learned CIT(A) has erred in confirming levy of penalty by AO of Rs.1,89,300/- u/s 271(1)(c), without considering reply of assessee and without proving concealment on facts of case. 3. brief facts are assessee claimed amount of Rs.5,56,933/- as bad debt recoverable from Shri Prajesh Sheth. On question, assessee explained that Shri Prajesh Sheth was accountant of assessee who is suffering from mouth cancer and money is given to him during course of regular employment for making payment of various statutory taxes etc. Instead of paying taxes, Shri Prajesh Sheth used amount for his own purposes, like his own treatment and other expenses. It was claimed that amount may be allowed as bad debt or embezzlement loss. ld. AO did not question genuineness of loss, but held it to be capital in nature. Penalty proceedings were initiated. assessee reiterated facts and contended that this was not fit case to levy penalty. SMC-ITA No. 2825/Ahd/2013 Ashish S. Sharma vs. ACIT AY : 2009-10 2 ld. AO, however, imposed same which was confirmed by ld. CIT(A). 4. Ld. Counsel for assessee contends that no question has been raised about genuineness about amount taken away by Shri Prajesh Sheth. loss has been disallowed attributing it to be capital loss. All details were furnished alongwith return. Reliance is placed on Hon ble Supreme Court judgment in case of CIT vs. Reliance Petroproducts Pvt Ltd, [2010] 322 ITR 158 (SC). All relevant details and explanation are filed by assessee along with return of income. Therefore, penalty u/s 271(1)(c) cannot be imposed. 5. ld. DR, on other hand, supported orders of lower authorities. 6. I have heard rival contentions, perused material available on record and gone through orders of lower authorities. In my considered view, assessee s claim of money, being taken away by Shri Prajesh Sheth, has not been disputed and amount has been held to be capital loss in nature. All relevant details were filed along with return of income and proper explanation was given. Penalty cannot be imposed merely because Revenue s claim is held to be capital in nature. Therefore, respectfully following Hon ble Supreme Court judgment in case of Reliance Petroproducts Pvt Ltd (supra), penalty in question is deleted and assessee s appeal is allowed. 7. In result, appeal of assessee is allowed. Order pronounced in Court on 30th September, 2016 at Ahmedabad. Sd/- R.P. TOLANI (JUDICIAL MEMBER) Ahmedabad; Dated 30/09/2016 *Biju T. SMC-ITA No. 2825/Ahd/2013 Ashish S. Sharma vs. ACIT AY : 2009-10 3 Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. Concerned CIT 4. CIT(A) 5. DR, ITAT, Ahmedabad 6. Guard file. BY ORDER, TRUE COPY (Dy./Asstt.Registrar) ITAT, Ahmedabad Ashish S. Sharma v. ACIT, Circle-10, Ahmedabad