Appeal details
Counselvise Citation
[2013] 122 COUNSELVISE.COM (IT) 8634 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
6 year(s) 6 month(s) 23 day(s)
Appellant
Respondent
Appeal Type
Cross Objection
Pronouncement Date
21-06-2013
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
A
Next Hearing Date
30-05-2013
Assessment Year
1999-2000
Appeal Filed On
28-11-2006
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI G. C. GUPTA, VP AND SHRI A. K. GARODIA , AM) ITA NO.2212/AHD/2004 & 2160/AHD/2006 (AY: 1999-2000) GUJARAT GAS CO. LTD., 2, SHANTIADAN SOCIETY, NEAR PARIMAL GARDEN, ELLISBRIDGE, AHMEDABAD 380 006 P. A. NO. AAACG 5600 M THE A. C. I. T., CIRCLE-4, AHMEDABAD VS VS THE A. C. I. T., CIRCLE-4, AHMEDABAD GUJARAT GAS CO. LTD., 2, SHANTIADAN SOCIETY, NEAR PARIMAL GARDEN, ELLISBRIDGE, AHMEDABAD 380 006 P. A. NO. AAACG 5600 M (APPELLANT) (RESPONDENT) C. O. NO.267/AHD/2006 (IN ITA NO.2160/AHD/2006) GUJARAT GAS CO. LTD., 2, SHANTIADAN SOCIETY, NEAR PARIMAL GARDEN, ELLISBRIDGE, AHMEDABAD 380 006 P. A. NO. AAACG 5600 M VS THE A. C. I. T., CIRCLE-4, AHMEDABAD (CROSS OBJECTOR) (RESPONDENT) ASSESSEE/CROSS OBJECTOR BY SHRI SANJAY R. SHAH, AR DEPARTMENT BY SHRI M. P. SINGH, CIT DR DATE OF HEARING: 30-05-2013 DATE OF PRONOUNCEMENT: 21-06-2013 ORDER PER A. K. GARODIA : THE APPEAL IN ITA NO.2212/AHD/2004 FILED BY THE ASSESSEE IN QUANTUM PROCEEDINGS IS DIRECTED AGAINS T THE ORDER OF THE LEARNED CIT(A)-X, AHMEDABAD DATED 25-03-2004 FOR THE ASSESS MENT YEAR 1999-2000. ITA NO.2212/AHD/2004 & 2160/AHD/2006 AND CO NO.267/AHD/2006 (AY 1999-2000) GUJARAT GAS CO. LTD. 2 THE SECOND APPEAL I.E. ITA NO.2160/AHD/2006 IS FILE D BY THE REVENUE IN PENALTY PROCEEDINGS AND THE C. O. NO.267/AHD/2006 IS FILED BY THE ASSESSEE IN PENALTY PROCEEDINGS OF THE SAME ASSESSMENT YEAR I.E. 1999-2 000 AND THIS APPEAL OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-VIII, AHMEDABAD DATED 27-07-2006 . ALL THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS C OMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST, WE TAKE UP THE QUANTUM APPEAL FILED BY TH E ASSESSEE. A CHART REGARDING VARIOUS GROUNDS AND SUBMISSIONS OF THE AS SESSEE IN RESPECT OF EACH OF THE GROUNDS IS SUBMITTED BY THE LEARNED AR OF THE A SSESSEE AND IT WAS AGREED BY BOTH THE SIDES THAT THIS APPEAL MAY BE DECIDED ON T HE BASIS OF THE CHART AFTER CONSIDERING THE SUBMISSIONS OF THE LEARNED DR OF TH E REVENUE. HENCE, WE PROCEED TO DECIDE THIS APPEAL OF THE ASSESSEE AS PE R THIS CHART. GROUND NO.1 IS GENERAL AS PER THIS CHART. 3. GROUND NO. 2 IS AS UNDER: 2. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISA LLOWANCE OF CLAIM MADE U/S. 80-I & 80-IA ON THE GROUND THAT ACTIVITY OF YOUR APPELLANT CANNOT BE HELD AS MANUFACTURE OR PRODUCTION OF ARTICLE OR THING. YOUR APPELLANT SUBMITS THAT IT IS ENGAGED IN MANUFACTURING AND/OR PRODUCING ARTICLES NOT SPECIFIED IN NINTH SCHEDULE FULFILLS THE REQUIRED C ONDITION FOR ELIGIBILITY OF DEDUCTION U/S. 80I & 80IA OF THE ACT AND HENCE DEDU CTION OUGHT TO HAVE BEEN GRANTED TO IT. 4. IT WAS SUBMITTED BY THE ASSESSEE IN THE CHART TH AT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL DECISION IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 1993-94 AND 1994-95 TO 1998-1999 A ND 2000-01. HE ALSO SUBMITTED THAT THE TRIBUNAL DECISIONS ARE AVAILABLE ON PAGES 59, 60 AND 75 OF THE PAPER BOOK. THE LEARNED DR SUPPORTED THE ORDER OF T HE LEARNED CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE TRIBUNAL DECISIONS IN EAR LIER YEARS. WE FIND THAT IN THE ASSESSMENT YEAR 2000-01 ALSO, SIMILAR ISSUE WAS RAISED BY THE ASSESSEE IN ITA NO.2212/AHD/2004 & 2160/AHD/2006 AND CO NO.267/AHD/2006 (AY 1999-2000) GUJARAT GAS CO. LTD. 3 GROUND NO.2 AND IN THAT YEAR, THIS ISSUE WAS DECIDE D BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE TRIBUNAL ORDER IN ASS ESSEES OWN CASE FOR THE ASSESSMENT YEAR 1993-94. HENCE, THIS HAS TO BE ACCE PTED THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE T RIBUNAL DECISION IN ASSESSEES OWN CASE IN THE ASSESSMENT YEARS 1993-94 AND 1994-95. RESPECTFULLY FOLLOWING THE SAME, WE HOLD THAT THE A SSESSEE IS ENTITLED TO DEDUCTION U/S 80 I/80 IA OF THE ACT. ACCORDINGLY, G ROUND NO.2 OF THE ASSESSEE IS ALLOWED. 6. GROUND NO.3 IS AS UNDER: 3, THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOW ANCE OF RS.15,03,448/- BEING REIMBURSEMENT OF 50% OF INTERE ST ON HOUSING LOAN TAKEN BY THE EMPLOYEES ON WRONG PREMISES. YOUR APPE LLANT SUBMITS THAT IT HAS NOT GIVEN ANY LOAN TO THE EMPLOYEES, BUT THE EM PLOYEES OF THE ASSESSEE COMPANY HAVE TAKEN LOAN FROM THE PARTIES O THER THAN THE ASSESSEE COMPANY AND THE COMPANY HAS ACTUALLY REIMB URSED 50 PER CENT OF THE INTEREST PAID ON THE LOAN TAKEN BY THE EMPLO YEES. THE EXPENDITURE IS INCLUDED FOR THE PURPOSE OF THE BUSINESS AND OUG HT TO HAVE BEEN ALLOWED. IT IS SUBMITTED THAT IT BE SO HELD NOW. 7. REGARDING THIS GROUND ALSO, IT IS SUBMITTED BY T HE LEARNED AR OF THE ASSESSEE THAT THIS ISSUE IS ALSO COVERED IN FAVOUR OF THE ASSESSEE BY THE SAME TRIBUNAL DECISION IN THE ASSESSMENT YEAR 2000-01 AN D ALSO BY THE TRIBUNAL DECISION IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2002-03. HE ALSO SUBMITTED THAT THE RELEVANT PAGES OF THE TRIBUNAL DECISION AR E AVAILABLE IN PAPER BOOK PAGES 85 TO 93. THE LEARNED DR SUPPORTED THE ORDERS OF THE LEARNED CIT(A). 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND WE FIND THAT THIS ISSUE WAS RAISED BY THE REVENUE IN THE ASSESSMENT YEAR 2000-0 1. IN THAT YEAR, THIS ISSUE WAS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESS EE BY FOLLOWING ANOTHER TRIBUNAL DECISION RENDERED IN ASSESSEES OWN CASE F OR ASSESSMENT YEARS 1995- 96 AND 1996-97. SINCE, NO DIFFERENT IN FACTS COULD BE POINTED OUT BY THE LEARNED DR; WE DO NOT FIND ANY REASON TO TAKE A CONTRARY VI EW IN THE PRESENT YEAR. ACCORDINGLY, THIS GROUND IS ALSO ALLOWED. ITA NO.2212/AHD/2004 & 2160/AHD/2006 AND CO NO.267/AHD/2006 (AY 1999-2000) GUJARAT GAS CO. LTD. 4 9. GROUND NO.4 IS AS UNDER: 4. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISA LLOWANCE OF RS.10,72,29,866/- BEING INTEREST ON BORROWINGS MADE FOR HAZIRA ANKLESHWAR PIPELINE PROJECT (HAPI). HAZIRA TO ANKLE SHWAR PIPELINE PROJECT IS SIMPLY AN EXTENSION OF THE EXISTING BUSINESS OF NATURAL GAS DISTRIBUTION THROUGH PIPELINES STARTED SINCE 1989. THE ASSESSEE COMPANY HAS ALREADY GOT A 930 KM LONG PIPE LINE NETWORK IN PLACE STARTI NG FROM ANKLESHWAR AND BHARUCH. THE SAME IS ADMISSIBLE AS DEDUCTION U/ 36( 1) (III) OF THE I. T. ACT. IT BE SO HELD NOW. 4.1 WITHOUT PREJUDICE, YOUR APPELLANT SUBMITS THAT IF IT IS HELD THAT THE INTEREST ON BORROWINGS MADE FOR HAZIRA ANKLESHWAR PIPE PROJECT IS NOT ADMISSIBLE U/S. 36(1)(III) OF THE I. T. ACT, THEN I T IS ENTITLED TO DEPRECIATION ON THE AMOUNT OF INTEREST WHICH HAS BEEN CAPITALIZE D IN THE BOOKS OF ACCOUNT, BUT NO DEPRECIATION HAS BEEN CLAIMED WHEN THE PROJECT STARTED PRODUCTION IN SUBSEQUENT ASSESSMENT YEAR. YOUR APPE LLANT SUBMITS THAT THE APPROPRIATE DIRECTION BE GIVEN TO GRANT DEPRECI ATION ON THE AMOUNT OF INTEREST CLAIMED AS DEDUCTION U/S 36 (1) (III), BUT DISALLOWED AS CAPITAL EXPENDITURE. IT IS SUBMITTED THAT IT BE SO DONE NOW . 10. WITH RESPECT TO THIS GROUND, IT WAS ALSO SUBMIT TED IN THE CHART THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY TRIBU NAL DECISION IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2000-01. HE HAS AL SO SUBMITTED THAT THE RELEVANT PAGE 88 IS AVAILABLE IN THE PAPER BOOK. R ELIANCE WAS ALSO PLACED ON THE JUDGMENT OF THE HONBLE APEX COURT RENDERED IN THE CASE OF CORE HEALTH CARE LTD. AS REPORTED IN 298 ITR 194. THE LEARNED DR SUP PORTED THE ORDER OF THE LEARNED CIT(A). 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS ED THE MATERIALS ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTH ORITIES BELOW AND THE JUDGMENT CITED BY THE LEARNED AR OF THE ASSESSEE. WE ALSO FIND THAT IN THE ASSESSMENT YEAR 2000-01, THIS ISSUE WAS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE HONBLE A PEX COURT RENDERED IN THE CASE OF CORE HEALTH CARE LTD. (SUPRA). SINCE, NO DI FFERENCE IN THE FACTS COULD BE POINTED OUT BY THE LEARNED DR IN THE PRESENT YEAR; WE DO NOT FIND ANY REASON TO TAKE A CONTRARY VIEW IN THIS YEAR. ACCORDINGLY, THI S GROUND OF THE ASSESSEE IS ALSO ALLOWED. ITA NO.2212/AHD/2004 & 2160/AHD/2006 AND CO NO.267/AHD/2006 (AY 1999-2000) GUJARAT GAS CO. LTD. 5 12. GROUND NO.5 IS AS UNDER: 5. THE LD. CIT (A) ERRED IN CONFIRMING THE DISALLO WANCE OF RS.30,389/- BEING AMOUNT SPENT AS A SUBSIDY GIVEN TOWARDS SUPPL Y OF GAS CONNECTION TO THE EMPLOYEES OF THE COMPANY, CONSIDERING THE S AME AS NON-BUSINESS EXPENDITURE. 13. IT IS SUBMITTED IN THE CHART THAT THIS ISSUE IS ALSO COVERED IN FAVOUR OF THE ASSESSEE BY TRIBUNAL ORDER IN ASSESSEES OWN CASE I N THE ASSESSMENT YEARS 2000-01 AND 2002-03. IT IS ALSO SUBMITTED THAT THE RELEVANT PAGES OF THE PAPER BOOK ARE 85 TO 93. THE LEARNED DR SUPPORTED THE ORD ER OF THE LEARNED CIT(A). 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND WE FIND THAT IN THE ASSESSMENT YEAR 2000-01, GROUND NO.3 RAISED BY THE REVENUE IN THAT YEAR WAS RELATED TO DELETION OF DISALLOWANCE OF RS.2.89 LACS ON ACCOUNT OF SUBSIDIZED GAS CONNECTION TO THE EMPLOYEES OF THE ASSESSEE. THIS D ISALLOWANCE WAS DELETED BY THE TRIBUNAL IN THAT YEAR BY FOLLOWING THE TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2003-04 AND 2004-05. IN TH E PRESENT YEAR ALSO, NO DIFFERENCE IN FACTS COULD BE POINTED OUT BY THE LEA RNED DR AND HENCE, THERE IS NO REASON TO TAKE A CONTRARY VIEW. ACCORDINGLY, THIS G ROUND IS ALSO ALLOWED. 15. GROUND NO.6 IS AS UNDER: 6. THE LD. CIT (A) HAS ERRED IN CONFIRMING THE DIS ALLOWANCE OF RS.16,25,518/- BEING EXPENDITURE ON GAS DAY AND DIW ALI FESTIVAL TREATING IT AS NON-BUSINESS EXPENDITURE. YOUR APPELLANT SUBMITS THAT IT IS BUSINESS EXPENDITURE REPRESENTS THE EXPENDITURE INCURRED ON SWEETS DISTRIBUTE TO THE STAFF MEMBERS ON THE OCCASSIOIN OF DIWALI FESTI VAL AND THE EXPENDITURE INCURRED ON GAS DAY 5 TH SEPTEMBER EVERY YEAR WHEN POOJA WAS DONE FOLLOWED BY LUNCH TO THE EMPLOYEES. IT BE SO HELD N OW. 16. IT IS SUBMITTED BY THE LEARNED AR IN THE CHART THAT THIS ISSUE IS ALSO COVERED BY THE TRIBUNAL DECISION IN FAVOUR OF THE A SSESSEE FOR THE ASSESSMENT YEARS 1993-94 AND 2000-01. HE HAS ALSO SUBMITTED TH AT THE RELEVANT PAGES OF THE PAPER BOOK ARE 63 AND 86. THE LEARNED DR SUPPORTED THE ORDER OF THE LEARNED CIT(A). ITA NO.2212/AHD/2004 & 2160/AHD/2006 AND CO NO.267/AHD/2006 (AY 1999-2000) GUJARAT GAS CO. LTD. 6 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT IN THE ASSESSMENT YEAR 2000-01, THIS ISSUE WAS DECIDED BY THE TRIBUNA L IN FAVOUR OF THE ASSESSEE BY FOLLOWING EARLIER TRIBUNAL DECISION IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 1993-94. RESPECTFULLY FOLLOWING THE PRECEDENCE , THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE IN THE PRESENT YEAR ALSO. AC CORDINGLY, THIS GROUND IS ALSO ALLOWED. 18. GROUND NO.7 IS AS UNDER: 7. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISA LLOWANCE OF THE CLAIM FOR DEDUCTION OF RS.7,50,00,000/- BEING THE AMOUNT WRITTEN OFF ON ACCOUNT OF DIMINUTION IN THE VALUE OF INVESTMENT IN SHARES OF PETROLEUM INFRASTRUCTURE LTD. YOUR APPELLANT SUBMITS THAT ENT IRE INVESTMENT IS ERODED AND NOTHING IS RECEIVABLE/EVEN SHARE PRICES ARE NOT QUOTED BEING UNLISTED COMPANY. YOUR APPELLANT SUBMITS THAT IN THE FACTS A ND CIRCUMSTANCES, THE LOSS ON ACCOUNT OF EROSION OF THE ENTIRE INVESTMENT IN SHARES ETC. SHOULD BE ALLOWED AS DEDUCTION FROM THE TOTAL INCOME. IT I S SUBMITTED THAT IT BE SO HELD NOW. 19. IT IS SUBMITTED BY THE LEARNED AR THAT THIS ISS UE IS NOT COVERED BY ANY EARLIER TRIBUNAL DECISION AND THIS IS A NEW ISSUE I N THE PRESENT CASE. HE HAS SUBMITTED THAT THE ASSESSEE COMPANY HAD MADE INVEST MENT OF RS.7.50 CRORES IN SHARES OF PETROLEUM INFRASTRUCTURE LTD. BEING LONG TERM BUSINESS INVESTMENT. HE HAS ALSO SUBMITTED THAT THE COMPANY SUBSEQUENTLY WE NT INTO WINDING UP AND THE VALUE OF THE INVESTMENT HAD COMPLETELY ERODED. HE H AS ALSO SUBMITTED THAT UNDER THESE FACTS, THE ASSESSEE COMPANY HAD WRITTEN OFF T HE ENTIRE INVESTMENT AS DIMINUTION IN THE VALUE OF THE INVESTMENT AND IT SH OULD BE ALLOWED AS BUSINESS LOSS. RELIANCE WAS PLACED BY HIM ON THE TRIBUNAL DE CISION RENDERED IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2001-02 IN ITA NO.36/AHD/2005 DATED 28-02-2011. HE HAS ALSO SUBMITTED THAT THE RE LEVANT PORTION OF THIS TRIBUNAL DECISION IS AT PAGES 43 TO 47 OF THE PAPER BOOK. HE HAS ALSO PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT REND ERED IN THE CASE OF CIT VS GUJARAT MINERAL DEVELOPMENT CORPORATION LTD. REPORT ED IN 314 ITR 322(GUJ). THE LEARNED DR SUPPORTED THE ORDER OF THE LEARNED CIT(A ). ITA NO.2212/AHD/2004 & 2160/AHD/2006 AND CO NO.267/AHD/2006 (AY 1999-2000) GUJARAT GAS CO. LTD. 7 20. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW AND THE JUDGMENTS CITED BY THE LEARNED AR. FIRST, WE CONSIDER THE TR IBUNAL DECISION IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2001-02. WE FIND T HAT GROUND NO.4 OF THE REVENUES APPEAL IN THAT YEAR IS DECIDED ON PAGES 4 3 TO 47 OF THE PAPER BOOK AND THIS GROUND IN THAT YEAR IS RELATED TO DISALLOWANCE OF RS.304.40 LACS ON ACCOUNT OF BAD DEBTS. AS PER THE FACTS OF THAT YEAR NOTED BY T HE TRIBUNAL ON PAGE 44 OF THE TRIBUNAL DECISION, WE FIND THAT IN THAT YEAR, A JOI NT VENTURE AGREEMENT WAS SIGNED BY ASSESSEE AND BHARAT PETROLEUM CORPORATION LTD. (BPCL) FOR FORMING A JOINT VENTURE COMPANY IN THE NAME OF PETROLEUM INFR ASTRUCTURE LTD. (PIL). IT IS ALSO NOTED THAT EACH OF THE PARTICIPATING COMPANY T OOK UP 50% OF INITIAL PAID UP EQUITY CAPITAL OF RS.1500 LACS. IN ADDITION TO THIS , THE ASSESSEE HAS GIVEN RS.290 LACS TO PIL FOR THE PURPOSE OF DOING BUSINESS AND A LSO RS.14,40,547/- TO MEET THE EXPENDITURE OF THE BUSINESS. THAT COMPANY I.E. PIL ALSO GONE INTO WINDING UP AND THIS AMOUNT OF RS.290 LACS AND RS.14.40 LACS GI VEN BY THE ASSESSEE TO PIL WAS WRITTEN OFF AND THIS ISSUE WAS DECIDED BY THE T RIBUNAL IN FAVOUR OF THE ASSESSEE. THIS GOES TO SHOW THAT THE ISSUE INVOLVED IN THAT YEAR WAS NOT REGARDING DIMINUTION IN THE VALUE OF INVESTMENT IN EQUITY SHARES OF PIL BECAUSE THAT AMOUNT IS SEPARATE BEING 50% OF INITIAL PAID U P CAPITAL OF RS.1500 LACS. THE AMOUNT IN DISPUTE IN THAT YEAR OF RS.290 LACS AND R S.14.40 LACS IS NOT ON ACCOUNT OF INVESTMENT IN SHARES AND, THEREFORE, THIS TRIBUN AL DECISION IS NOT APPLICABLE IN THE PRESENT YEAR BECAUSE IN THE PRESENT YEAR, DISPU TE IS REGARDING WRITING OFF OF THE INVESTMENT IN SHARES. 21. NOW, WE EXAMINE THE APPLICABILITY OF THE JUDGME NT OF THE HONBLE GUJARAT HIGH COURT CITED BY THE LEARNED AR HAVING RENDERED IN THE CASE OF CIT VS GUJARAT MINERAL DEVELOPMENT CORPORATION LTD. [GMDC] (SUPRA). REGARDING THE FACTS OF THAT CASE, IT IS NOTED BY US THAT IN THAT CASE, THE AMOUNT IN DISPUTE WAS GIVEN BY THE ASSESSEE I.E. GMDC TO GUJARAT MARITIME BOARD FOR CONSTRUCTION OF JETTY AND PLATE-FORM AND ULTIMATELY WHEN THE CONSTR UCTION HAS NOT BEEN MADE AND THE AMOUNT HAS NOT BEEN RETURNED, THE SAME WAS WRIT TEN OFF AND CLAIMED BY THE ITA NO.2212/AHD/2004 & 2160/AHD/2006 AND CO NO.267/AHD/2006 (AY 1999-2000) GUJARAT GAS CO. LTD. 8 ASSESSEE AS BUSINESS LOSS. THIS CLAIM OF THE ASSESS EE WAS ALLOWED BY THE HONBLE GUJARAT HIGH COURT. IN OUR CONSIDERED OPINI ON, THIS JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IS ALSO NOT APPLICABLE I N THE PRESENT CASE BECAUSE IN THE PRESENT CASE, THE ISSUE INVOLVED IS REGARDING D IMINUTION IN THE VALUE OF INVESTMENT IN SHARES AND NOT REGARDING ANY ADVANCE GIVEN FOR BUSINESS PURPOSE AS IN THAT CASE. WE ARE OF THE CONSIDERED OPINION T HAT LOSS ON ACCOUNT OF DIMINUTION IN THE VALUE OF INVESTMENT IN SHARES IS ALLOWABLE BY WAY OF CAPITAL LOSS ONLY WHEN TRANSFER OF SHARES TAKES PLACE. IN THE PR ESENT CASE, IT IS ADMITTED POSITION OF FACT THAT THERE IS NO TRANSFER OF SHARE S IN QUESTION AND, THEREFORE, IN OUR CONSIDERED OPINION, THE CLAIM OF THE ASSESSEE R EGARDING THIS DIMINUTION IN THE VALUE OF INVESTMENT IN SHARES IS NOT ALLOWABLE. HEN CE, WE DECLINE TO INTERFERE WITH THE ORDER OF THE LEARNED CIT(A) ON THIS ISSUE. THIS GROUND OF THE ASSESSEE IS REJECTED. 22. GROUND NO.8 IS AS UNDER: 8. THE LD. CIT (A) HAS ERRED IN CONFIRMING THE DIS ALLOWANCE OF THE CLAIM FOR DEDUCTION OF RS.45,16,411/- BEING THE AMO UNT OF BAD DEBTS WRITTEN OFF IN RESPECT OF RAJINDER STEELS LTD. BEIN G AMOUNT WRITTEN OFF AGAINST THE PROVISION FOR DOUBTFUL DEBTS MADE IN A. Y. 1998-99. 23. IT IS SUBMITTED BY THE LEARNED AR THAT THIS AMO UNT HAS BEEN WRITTEN OFF IN RESPECT OF DEBTS RECOVERABLE FROM RAJINDER STEELS L TD., TO WHOM THE ASSETS HAVE BEEN LEASED. HE ALSO SUBMITTED THAT THIS AMOUNT HAS BEEN WRITTEN OFF AS THIS COMPANY HAS GONE INTO LIQUIDATION. HE FURTHER SUBMI TTED THAT THE TWIN CONDITIONS REQUIRED TO SATISFY FOR ALLOWABILITY OF CLAIM REGAR DING WRITE OFF OF BAD DEBTS ARE FULFILLED IN THE PRESENT CASE I.E. ACTUAL WRITE OFF OF THE DEBTS IN THE BOOKS OF ACCOUNTS AND THIS CONDITION THAT THE DEBT IN QUESTI ON HAS BEEN OFFERED TO TAX IN THE RELEVANT YEAR OR IN AN EARLIER YEAR. HE ALSO SU BMITTED THAT IN EARLIER YEAR, PROVISION OF BAD DEBTS WAS MADE BUT THE SAME WAS NO T ALLOWED IN THE EARLIER YEAR. HE FURTHER SUBMITTED THAT THE MATTER MAY BE R ESTORED BACK TO THE FILE OF THE AO FOR FRESH DECISION AFTER EXAMINING THE FACTUAL A SPECTS. THE LEARNED DR SUPPORTED THE ORDER OF THE LEARNED CIT(A). ITA NO.2212/AHD/2004 & 2160/AHD/2006 AND CO NO.267/AHD/2006 (AY 1999-2000) GUJARAT GAS CO. LTD. 9 24. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FE EL IT PROPER THAT THIS ISSUE SHOULD GO BACK TO THE FILE OF THE AO FOR FRESH DECI SION AFTER EXAMINING THE FACTUAL ASPECTS AS TO WHETHER THE DEBT IN QUESTION WAS ACTU ALLY WRITTEN OFF BY THE ASSESSEE OR NOT IN THE PRESENT YEAR IN ITS BOOKS OF ACCOUNTS. THE AO SHOULD ALSO EXAMINE THE CLAIM OF THE ASSESSEE THAT THE CONDITIO NS OF SECTION 36(2) OF THE ACT ARE BEING COMPLIED WITH BY THE ASSESSEE. THEN, HE S HOULD DECIDE THE ISSUE IN THE LIGHT OF THE JUDGMENT OF THE HONBLE SUPREME COURT RENDERED IN THE CASE OF T. R. F. LTD. VS CIT 323 ITR 397 (SC) AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THIS GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 25. GROUND NO.9 IS AS UNDER: 9. THE LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF THE AO AS REGARDS NON-GRANTING OF DEPRECIATION OF RS.1,65,190/- ON TH E ASSETS LEASED TO RAJASTHAN STATE ELECTRICITY BOARD (RSEB) (A STATE GOVERNMENT UNDERTAKING, FORMED UNDER THE STATE ELECTRICITY SUP PLY ACT) ON THE GROUND THAT THE AGREEMENTS MADE WITH RSEB IS NOTHING, BUT A DEVICE OF TAX AVOIDANCE AND TOTALLY INCORRECT. IT BE SO HELD NOW. 9.1 WITHOUT PREJUDICE, YOUR APPELLANT SUBMITS THAT IF THE LEASE TRANSACTIONS ARE NOT ACCEPTED AS GENUINE, THEN IT IS SUBMITTED THAT THE LEASE RENT RECEIVED RS.2,91,11,575/- FROM RAJASTHA N STATE ELECTRICITY BOARD WHICH HAS BEEN OFFERED TO TAX SHOULD BE EXCLU DED WHILE COMPUTING THE INCOME. YOUR APPELLANT SUBMITS THAT IT BE SO HE LD NOW. WITHOUT PREJUDICE TO ABOVE, YOUR APPELLANT SUBMITS THAT IN THAT EVENT, WHAT IS TAXABLE WOULD BE ONLY INTEREST PORTION INCLUDED IN THE LEASE RENT AND DEEMED PRINCIPAL AMOUNT OF RECOVERY INCLUDED IN THE RENT RECEIVED SHOULD HAVE BEEN EXCLUDED. IT BE SO HELD NOW. 26. IT IS SUBMITTED BY THE LEARNED AR THAT THIS ISS UE IS NOW COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL DECISION IN ASSESSE ES OWN CASE FOR THE ASSESSMENT YEAR 1995-96 AND 2000-01. HE ALSO SUBMIT TED THAT THE HONBLE GUJARAT HIGH COURT HAS DISMISSED THE APPEAL FILED B Y THE DEPARTMENT IN ASSESSEES OWN CASE AS PER THE JUDGMENT DATED 10-09 -2008 IN TAX APPEAL NO.444/2008. HE HAS SUBMITTED A COPY OF THE ABOVE J UDGMENT OF THE HONBLE GUJARAT HIGH COURT. THE LEARNED DR SUPPORTED THE OR DER OF THE LEARNED CIT(A). ITA NO.2212/AHD/2004 & 2160/AHD/2006 AND CO NO.267/AHD/2006 (AY 1999-2000) GUJARAT GAS CO. LTD. 10 27. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT AS PER THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN ASSES SEES OWN CASE FOR THE ASSESSMENT YEAR 1995-96, THE QUESTION RAISED BEFORE THE HONBLE GUJARAT HIGH COURT WAS THIS AS TO WHETHER THE TRIBUNAL IS RIGHT IN LAW AND IN FACTS IN HOLDING THAT THE TRANSACTION OF SALE AND LEASE BACK WAS GEN UINE AND THE ASSESSEE WAS ENTITLED TO DEPRECIATION. IN THAT YEAR, THE DISPUTE WAS REGARDING THE TRANSACTION OF SALE AND LEAS BACK BETWEEN THE ASSESSEE COMPANY AND RAJASTHAN STATE ELECTRICITY BOARD (RSEB). IT IS NOTED BY THE HONBL E HIGH COURT IN THIS DECISION THAT AS PER THE JUDGMENT OF THE HONBLE RAJASTHAN HIGH COURT RENDERED IN THE CASE OF CIT VS RAJASTHAN STATE ELECTRICITY BOARD AS REPORTED IN 204 CTR 415, THE QUESTION BEFORE THE HONBLE RAJASTHAN HIGH COUR T WAS IN RELATION TO DISALLOWANCE OF PAYMENT OF LEASE RENTALS ON THE TRA NSACTION OF SALE CUM LEASE BACK AGREEMENT AND IT WAS FOUND IN THAT CASE BY THE HONBLE RAJASTHAN HIGH COURT THAT THE TRIBUNAL HAS RIGHTLY APPRECIATED THE FACTS AND CORRECTLY FOUND THE TRANSACTION TO BE GENUINE. IT IS ALSO NOTED BY THE HONBLE GUJARAT HIGH COURT IN THAT JUDGMENT THAT THE LEASE RENTAL PAID BY RSEB WH ICH HAS BEEN FOUND BY THE HONBLE RAJASTHAN HIGH COURT AS ALLOWABLE DEDUCTION BECAUSE THE TRANSACTION WAS FOUND TO BE GENUINE AND CORRESPONDINGLY, IN THE HANDS OF THIS ASSESSEE, THE SAID LEASE RENTAL HAS BEEN TAXED AS BUSINESS INCOME AND THE SAME HAS NOT BEEN DISPUTED BY THE AO IN SPITE OF INITIATING PROCEEDIN GS U/S 147 OF THE ACT FOR TREATING THE TRANSACTION AS A NON-GENUINE TRANSACTION. UNDER THESE FACTS, IT WAS HELD BY THE HONBLE GUJARAT HIGH COURT THAT THE DECISION OF THE TRIBUNAL FOR ALLOWING DEPRECIATION ON SUCH ASSETS IS ON PROPER APPRECIATI ON OF EVIDENCES ON RECORD AND NO SUBSTANTIAL QUESTION OF LAW HAS ARISEN. IN T HE PRESENT YEAR ALSO, THE DISPUTE IS REGARDING DEPRECIATION IN RESPECT OF ASS ETS LEASED TO RSEB AND NO DIFFERENCE IN FACTS COULD BE POINTED OUT BY THE LEA RNED DR AND HENCE, BY RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL GUJARAT HIGH COURT RENDERED IN THE ASSESSEES OWN CASE, WE HOLD THAT T HE DISALLOWANCE OF DEPRECIATION MADE BY THE AO AND CONFIRMED BY THE LE ARNED CIT(A) IS NOT JUSTIFIED IN THE FACTS OF THE PRESENT CASE AND THE SAME IS DE LETED. SO, THIS GROUND IS ALSO ALLOWED. ITA NO.2212/AHD/2004 & 2160/AHD/2006 AND CO NO.267/AHD/2006 (AY 1999-2000) GUJARAT GAS CO. LTD. 11 28. GROUND NO.10 IS AS UNDER: 10. THE LD. CIT (A) ERRED IN CONFIRMING THE LEARNE D ASSESSING OFFICER AS REGARDS DISALLOWANCE OF RS.19,32,544/- BEING METER READING DIFFERENCE PAID TO GAIL/ONGC. YOUR APPELLANT SUBMITS THAT IT H AD RECEIVED DEBIT NOTES FROM GAIL & ONGC AT THE TIME OF FINALIZATION OF ACCOUNTS AND THEREFORE, THE PROVISIONS HAS BEEN MADE ON THE BASI S OF LIABILITY CRYSTALLIZED. YOUR APPELLANT SUBMITS THAT IN THE FA CTS AND CIRCUMSTANCES, THE SAME SHOULD BE ALLOWED AS DEDUCTION WHILE COMPU TING THE INCOME. IT IS SUBMITTED THAT IT BE SO ALLOWED NOW. WITHOUT PREJUDICE TO THE ABOVE, IF IT IS HELD THAT THE SAME IS NOT ALLOWABLE IN A. Y. 1999-2000, THEN DIRECTION BE GIVEN TO ALLO W THE SAME IN A. Y. 2000-2001 WHEN THE APPELLANT HAS RECEIVED THE DEBIT NOTES. YOUR APPELLANT SUBMITS THAT IT BE SO DONE NOW. 29. IT WAS SUBMITTED BY THE LEARNED AR THAT THIS LI ABILITY IS IN RESPECT OF DIFFERENCE IN METER READING PAYABLE TO GAIL AND ONG C PERTAINING TO EARLIER YEARS HAS CRYSTALIZED IN THE PRESENT YEAR. HE SUBMI TTED THAT THE MINUTES OF MEETING (MOM) BETWEEN THE ASSESSEE COMPANY AND GAIL AND ONGC IS AVAILABLE ON PAGE 144 OF THE PAPER BOOK AND THE SAM E IS DATED 30-03-1999. AT THIS JUNCTURE, IT WAS POINTED OUT BY THE BENCH THAT THE RELEVANT DEBIT NOTE ISSUED BY GAIL IS AVAILABLE ON PAGE 145 OF THE PAPER BOOK WHICH IS DATED 24-06-199 AND THE DEBIT NOTE ISSUED BY ONGC IS AVAILABLE ON P AGE 46 OF THE PAPER BOOK WHICH IS DATED 02-06-1999. IN REPLY, IT WAS SUBMITT ED BY THE LEARNED AR THAT PROVISION WAS MADE IN THE LIGHT OF THE MOM HELD ON 30-03-1999 AND, THEREFORE, THE CLAIM OF THE ASSESSEE SHOULD BE ALLOWED IN THE PRESENT YEAR BECAUSE THE LIABILITY HAS CRYSTALLIZED ON THE DATE OF MEETING I TSELF. THE LEARNED DR SUPPORTED THE ORDER OF THE LEARNED CIT(A). 30. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT IT IS NOT THE CASE OF THE AO THAT THE LIABILITY IN QUESTION IS NOT A B USINESS LIABILITY. BUT ONLY REASON FOR MAKING THE DISALLOWANCE THAT IT IS RELATED TO E ARLIER YEAR. IN THE LIGHT OF THE MOM HELD ON 30-03-1999 BETWEEN THE ASSESSEE COMPANY AND GAIL AND ONGC, IT IS ESTABLISHED BY THE ASSESSEE THAT THE LI ABILITY IN QUESTION HAS ITA NO.2212/AHD/2004 & 2160/AHD/2006 AND CO NO.267/AHD/2006 (AY 1999-2000) GUJARAT GAS CO. LTD. 12 CRYSTALLIZED IN THE PRESENT YEAR AND, THEREFORE, TH E SAME SHOULD BE ALLOWED IN THE PRESENT YEAR. THEREFORE, THIS GROUND IS ALSO ALLOWE D. 31. GROUND NO.11 IS AS UNDER: 11. THE LD. CIT (A) ERRED IN CONFIRMING THE ORDER OF AO AS REGARDS DISALLOWANCE OF PROVISION MADE FOR RENT PAYABLE TO GIDC AT RS.1,70,368/-. YOUR APPELLANT SUBMITS THAT RENT WAS NOT FIXED BY G IDC AUTHORITY AND THEREFORE, YOUR APPELLANT HAS MADE A PROVISION ON T HE BASIS OF PAYMENT MADE TO GIDC IN OTHER LOCATIONS. YOUR APPELLANT FUR THER SUBMITS THAT IN SUBSEQUENT ASSESSMENT YEAR 2001-02, THE EXCESS PROV ISION MADE HAS BEEN CREDITED AND OFFERED FOR TAX. THEREFORE, THE L D. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSI NG OFFICER. IT IS SUBMITTED THAT IT BE SO HELD NOW. 32. IT IS SUBMITTED BY THE LEARNED AR THAT THE DETA ILS ARE AVAILABLE ON PAGE 156 OF THE PAPER BOOK WHICH INCLUDES SOME AMOUNTS R ELATED TO THE PRESENT YEAR ALSO BEING RS.43,87,752/- AND RS.1,03,272/-. AT THI S JUNCTURE, IT WAS POINTED OUT BY THE BENCH THAT ON PAGE 148 AND 149 OF THE PAPER BOOK IS A LETTER ISSUED BY SHRI B. DIGAR TO SHRI JAGDISH MEHTA, COMPANY SECRET ARY IN RESPECT OF THIS LIABILITY OF GIDC AND THIS LETTER IS DATED 25-02-1998 AS PER WHICH IT WAS SUBMITTED THAT THE LIABILITY HAS BEEN WORKED OUT AT RS.236.60 LACS FOR THE PERIOD 1990 TO 1997. THE BENCH WANTED TO KNOW AS TO WHEN THE LIABILITY W AS WORKED OUT IN THE FINANCIAL YEAR 1997-98, THEN, HOW IT CAN BE ACCEPTE D THAT THIS LIABILITY HAS CRYSTALLIZED IN THE PRESENT YEAR. IN REPLY, IT WAS STATED BY THE LEARNED AR THAT THE LIABILITY IN RESPECT OF THE PRESENT YEAR HAS TO BE ALLOWED IN ANY CASE AND FOR THE BALANCE LIABILITY OF EARLIER YEARS THE SAME SHOULD BE ALLOWED BECAUSE AS PER THIS LETTER DATED 25-2-1998, AN ESTIMATION WAS ONLY MADE BY ONE OFFICER BUT ACTUAL LIABILITY WAS ULTIMATELY FINALIZED IN THE PRESENT Y EAR ONLY AS PER THE DETAILS AVAILABLE AT PAGE 156 OF THE PAPER BOOK. THE LEARNE D DR SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 33. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND TH AT IN THE CHART, IT IS SUBMITTED BY THE ASSESSEE THAT THE TRANSACTION HAS BEEN MADE IN THE PRESENT YEAR BECAUSE THE SAME HAS BEEN CLAIMED DURING THE P RESENT YEAR AS PER THE ITA NO.2212/AHD/2004 & 2160/AHD/2006 AND CO NO.267/AHD/2006 (AY 1999-2000) GUJARAT GAS CO. LTD. 13 LETTERS FOR PAYMENT OF LEASE RENT RECEIVED FROM GID C DURING THE PRESENT YEAR. WE DO NOT FIND ANY MERIT IN THIS CONTENTION BECAUSE AS PER THE LETTER DATED 25-2-1998, AVAILABLE ON PAGES 148 AND 149, THE LIAB ILITY WAS WORKED OUT FOR THE PERIOD FROM 1990 TO 1997 ON THAT DAY AND HENCE, IT CANNOT BE ACCEPTED THAT THE LIABILITY WAS NOT CRYSTALLIZED DURING THAT YEAR ONL Y BECAUSE NO FORMAL LETTER WAS RECEIVED FROM GIDC ASKING THE ASSESSEE TO MAKE PAYM ENT. HENCE, WE FEEL THAT THE LIABILITY RELATING TO THE PRESENT YEAR OF RS.43 ,87,752/- IN RESPECT OF GIDC ANKLESHWAR AND RS.1,03,272/- IN RESPECT OF GIDC BHA RUCH SHOULD BE ALLOWED IN THE PRESENT YEAR BECAUSE THE SAME ARE RELATED TO TH E PRESENT YEAR BUT THE REMAINING AMOUNT WHICH IS RELATED TO EARLIER YEARS CANNOT BE ALLOWED IN THE PRESENT YEAR BECAUSE THESE LIABILITIES ARE NOT RELA TED TO THE PRESENT YEAR AND THE SAME HAS NOT BEEN CRYSTALLIZED IN THE PRESENT YEAR. THIS GROUND IS PARTLY ALLOWED. 34. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN TH E QUANTUM PROCEEDINGS IS PARTLY ALLOWED. 35. NOW, WE TAKE UP THE APPEAL OF THE REVENUE AND T HE CROSS OBJECTION OF THE ASSESSEE IN THE PENALTY PROCEEDINGS. 36. THE LEARNED DR SUPPORTED THE PENALTY ORDER WHER EAS THE LEARNED AR SUPPORTED THE ORDER OF THE LEARNED CIT(A). 37. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT THIS ISSUE WAS DECIDED BY THE LEARNED CIT(A) IN PARA 5 AND 6 OF HI S ORDER IN THE PENALTY PROCEEDINGS AND FOR THE SAKE OF READY REFERENCE, TH E SAME ARE REPRODUCED BELOW: 5. NOW I SHALL ADVERT TO THE LEGAL ASPECTS PUT FOR TH BY THE LEARNED COUNSEL FOR THE APPELLANT. IT WAS VEHEMENTLY ARGUED THAT A HARD PENALTY U/S 271 (1) (C) CANNOT BE LEVIED IN THEIR CASE AS T HE MATTERS UNDER CONSIDERATION WERE FULLY DISCLOSED IN THE STATEMENT OF INCOME. THE LEARNED COUNSEL WAS AT PAINS TO DRAW MY ATTENTION TO THE DE CISIONS OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT V. JALARAM OI L MILLS (253 ITR 192 (GUJ) AND NATIONAL TEXTILES V. CIT 249 ITR 125 (GUJ ) TO THE EFFECT THAT THERE MUST BE A MATERIAL TO PROVE THAT THE APPELLAN T HAD CONCEALED PARTICULARS WHICH REPRESENTED INCOME IN THE FIRST I NSTANCE AND THAT IT WAS ITA NO.2212/AHD/2004 & 2160/AHD/2006 AND CO NO.267/AHD/2006 (AY 1999-2000) GUJARAT GAS CO. LTD. 14 NOT ENOUGH FOR THE PURPOSE OF PENALTY THAT THE AMOU NT HAS BEEN ASSESSED AS INCOME. ALSO THERE MUST BE ANIMUS I.E. CONSCIO US CONCEALMENT OR AN ACT OF FURNISHING INACCURATE PARTICULARS ON THE PAR T OF THE APPELLANT. THE APPELLANT ALSO RELIED ON THE DECISION OF MUMBAI ITA T IN THE CASE OF VIDYUT METALS LTD. REPORTED AT 116 TAXMAN 275 (MUMBAI), HO LDING THAT THE DISALLOWANCE MADE AFTER LENGTHY EXERCISE OF APPEALS DOES NOT CALL FOR LEVY OF PENALTY. THUS, IT WAS CLAIMED THAT HT APPELLANT HAD FULL8Y DISCHARGED THE ONUS AND THE DISALLOWANCES MADE PURELY ON CLEAVAGE OF JUDICIAL OPINION AND THERE BEING NO FAULT AND WILLFUL NEGLIGENCE ON T4HIR PART, NO PENALTY U/S. 271 (1) ( C) BE LEVIED. 6. I HAVE CONSIDERED THE LEGAL ASPECTS PUT FORTH BY THE APPELLANT IN THE LIGHT OF THE DECISION ON FACTS AS WELL AS LAW CONTA INED IN THE PRECEDING PARAGRAPHS. THOUGH, THE INITIATION OF PENALTY PROCE EDINGS WAS AFTER DUE RECORDING OF REASONS IN THE ASSESSMENT ORDER, THE L EVY OF PENALTY HAS TO BE TESTED FROM THE POINT OF VIEW OF APPELLANT FURNI SHING INACCURATE PARTICULARS OR CONCEALMENT OF INCOME WITH CONSCIOUS INTENTION OF TAKING UNDUE ADVANTAGE OF REDUCTION IN TAX LIABILITY. IN T HE INSTANT CASE, THERE IS NO MATERIAL BROUGHT OUT BY THE AO TO PROVE THE ABOV E INGREDIENTS FOR LEVY OF PENALTY. ALL THAT HAS BEEN DONE COULD ONLY SUPPO RT THE ADDITIONS FOR COMPUTATION OF INCOME AND NOT FOR LEVY OF PENALTY. IN THAT VIEW OF THE MATTER, THERE IS NO CASE FOR LEVY OF CONCEALMENT PE NALTY U/S.271 (1) (C) EITHER ON FACTS OR IN LAW AND ACCORDINGLY, I CANCEL THE PENALTY LEVIED U/S. 271 (1) (C) AT RS.4,23,25,084/-. 38. FROM THE ABOVE TWO PARAGRAPHS OF THE ORDER OF T HE LEARNED CIT(A), WE FIND THAT A CLEAR FINDING IS GIVEN BY THE LEARNED CIT(A) THAT THE DISALLOWANCES WERE MADE PURELY ON THE BASIS OF JUDICIAL OPINION AND TH ERE WAS NO FAULT OR WILLFUL NEGLIGENCE ON THE PART OF THE ASSESSEE AND, THEREFO RE, PENALTY IS NOT JUSTIFIED. HE HAS ALSO GIVEN A FINDING THAT THERE IS NO MATERIAL BROUGHT OUT BY THE AO TO PROVE THE INGREDIENTS FOR LEVY OF PENALTY THAT THE ASSESS EE HAS FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCEALED PARTICULARS OF I NCOME. THIS FINDING OF THE LEARNED CIT(A) COULD NOT BE CONTROVERTED BY THE LEA RNED DR AND HENCE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF TH E LEARNED CIT(A). ACCORDINGLY, THE APPEAL OF THE REVENUE AND THE CROSS OBJECTION O F THE ASSESSEE ARE DISMISSED. ITA NO.2212/AHD/2004 & 2160/AHD/2006 AND CO NO.267/AHD/2006 (AY 1999-2000) GUJARAT GAS CO. LTD. 15 39. IN THE COMBINED RESULT, THE APPEAL OF THE ASSES SEE IN QUANTUM PROCEEDINGS IS PARTLY ALLOWED; WHEREAS THE APPEAL O F THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE IN PENALTY PROCEEDINGS AR E DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21-06-2013. SD/- SD/- (G. C. GUPTA) VICE PRESIDENT (A. K. GARODIA) ACCOUNTANT MEMBER LAKSHMIKANTA DEKA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 13-06-2013 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 14-06-2013/ 18-06-2013 OTHER MEM BER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER:
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