Atul Limited, Ahmedabad V. The Dy.CIT(OSD),Range-1, Ahmedabad

CO 7/AHD/2011

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 6822 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 19-01-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2004-2005
• Appeal Filed On: 07-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S S PARIDA
• Keywords: Depreciation; Wrong claim

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, D BENCH, AHMEDABAD BEFORE SHRI G. C. GUPTA, HONBLE VICE PRESIDENT AND SHRI B.P.JAIN, ACCOUNTANT MEMBER I.T.A.NO. 3455/AHD/2010 & C.O.NO.07/AHD/2011 (ASSESSMENT YEAR 2004-05) M/S. ATUL LTD., VS. DCIT, (OSD), RANGE 1, 3 RD FLOOR, JITENDRA CHAMBERS, AHMEDABAD NEAR NDW RBI LANE, ASHRAM ROAD, AHMEDABAD I.T.A. NO. 3188/ AHD/2010 (ASSESSMENT YEAR 2004-05) DCIT (OSD) RANGE 1, AHMEDABAD VS. M/S. ATUL LTD., 3 RD FLOOR, JITENDRA CHAMBERS, NEAR NDW RBI LANE, ASHRAM ROAD, AHMEDABAD PAN/GIR NO. : AABCA2390M (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI S.S.PARIDA, CIT DR RESPONDENT BY: SHRI S.N.SOPARKAR, SR. ADV. DATE OF HEARING: 30.12.20110 DATE OF PRONOUNCEMENT: 19.01.2012 O R D E R PER SHRI G. C. GUPTA, V.P.:- THESE CROSS APPEAL BY THE REVENUE AND THE ASSESSEE AND THE CROSS OBJECTION BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2 004-05 ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A)-VI, AHMEDABAD. THE SE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER. I.T.A.NO.3455,3188 /AHD/2010 C.O.NO.07/AHD/2011 2 2. I.T.A.NO. 3455/AHD/2010 (ASSESSEES APPEAL):- THE ONLY ISSUE IN THIS APPEAL OF THE ASSESSEE IS REGARDING PENALTY IM POSED U/S 271(1)(C) OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTE D THAT IN THE QUANTUM APPEAL OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR THE ASSESSMENT WAS SET ASIDE TO THE FILE OF THE A.O. FOR MAKING DE NOVO ASSESSMENT AND ACCORDINGLY, THE PRESENT PENALTY IMPOSED IS LIABLE TO BE CANCELLED. THE LD. D.R. COULD NOT CONTROVERT THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN VI EW OF THE FACT THAT IN THE QUANTUM APPEAL OF THE ASSESSEE, THE ASSESSME NT HAS BEEN SET ASIDE TO THE FILE OF THE A.O. FOR MAKING DE NOVO ASSESSME NT, WE HOLD THAT THE PENALTY IMPOSED U/S 271(1)(C) DOES NOT SURVIVE, WHI CH IS ACCORDINGLY CANCELLED. HOWEVER, THE DEPARTMENT SHALL BE AT LIB ERTY TO RE-INITIATE THE PENALTY U/S 271(1)(C) OF THE ACT AT THE TIME OF FRA MING THE ASSESSMENT IN THE CASE OF THE ASSESSEE, IF SO REQUIRED AS PER LAW . 4. C.O. NO.07/AHD/2011 (ASSESSEES C.O.):- THE ONLY ISSUE IN THE CROSS OBJECTION FILED BY THE ASSESSEE IS REGARDING VALIDITY OF THE PENALTY IMPOSED U/S 271(1)(C) OF THE ACT. IN VIEW OF OUR O RDER IN THE FOREGOING PARA 3 OF THIS ORDER WHILE DISPOSING OFF I.T.A.NO. 3455/AHD/2010 WHEREIN THE PENALTY IMPOSED U/S 271(1)(C) HAS BEEN CANCELLED, WE HOLD THAT THE CROSS OBJECTION PREFERRED BY THE ASSESSEE DOES NOT SURVIVE AND IS DISMISSED ACCORDINGLY. 5. I.T.A.NO. 3188/AHD/2010 (REVENUES APPEAL):- THE GROUND NO.1 OF APPEAL OF THE REVENUE IS AS UNDER: 1. THE LD. CIT(A) ERRED IN LAW AND ON F ACTS IN DELETING THE PENALTY U/S.271(L)(C) OF THE I.T. ACT LEVIED ON ACC OUNT OF EXCESS DEPRECIATION CLAIMED AMOUNTING TO RS.3,52,78,7877-. I.T.A.NO.3455,3188 /AHD/2010 C.O.NO.07/AHD/2011 3 6. THE LD. D.R. SUBMITTED THAT THE ASSESSEE HAS MIS REPRESENTED THE FACTS AND HAS CLAIMED EXCESS DEPRECIATION AND THERE FORE, THE PENALTY WAS RIGHTLY IMPOSED U/S 271(1)(C) OF THE ACT. HE RELIE D ON THE DECISION OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF CI T VS PRATAP SINGH OF NABHA AS REPORTED IN 09 TAXMAN.COM 225. THE LD. CO UNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS COVERED IN FAV OUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2002-03 IN I.T.A.NO. 951/AHD/2008 WHEREIN, THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE AND THE ORDER OF LD. CIT( A) CANCELLING THE PENALTY WAS CONFIRMED BY THE TRIBUNAL. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E PERUSED THE ORDER OF THE TRIBUNAL FOR THE EARLIER ASSESSMENT YE AR 2002-03 IN ASSESSEES OWN CASE. WE FIND THAT IN IDENTICAL FACTS, THE PEN ALTY IMPOSED U/S 271(1)(C) OF THE ACT ON EXCESS DEPRECIATION WAS CAN CELLED BY THE LD. CIT(A) IN THE CASE OF THE ASSESSEE IN EARLIER ASSES SMENT YEAR 2002-03. AGAINST THIS ORDER, THE REVENUE HAS PREFERRED AN AP PEAL BEFORE ITAT AND THE TRIBUNAL IN I.T.A.NO. 951/AHD/2008 FOR THE ASSE SSMENT YEAR 2002-03 HAS CONFIRMED THE ORDER OF THE LD. CIT(A) CANCELLIN G THE PENALTY IMPOSED U/S 271(1)(C) OF THE ACT. WE, BEING IN AGREEMENT W ITH THE DECISION OF THE TRIBUNAL ON THIS ISSUE, CONFIRM THE ORDER OF LD. CI T(A) BY FOLLOWING THE ORDER OF THE TRIBUNAL FOR THE EARLIER ASSESSMENT YE AR 2002-03 CANCELLING THE PENALTY IMPOSED U/S 271(1)(C) OF THE ACT. ACCO RDINGLY, THE GROUND NO.1 OF THE REVENUES APPEAL IS DISMISSED. 8. GROUND NO.2 OF THE REVENUES APPEAL IS AS UNDER: 2. THE LD. CIT(A) ERRED IN LAW AND ON FACT S IN DELETING THE PENALTY U/S.271(L)(C) LEVIED ON ACCOUNT OF DEDUCTIO N U/S.80IA CLAIMED ON NEW POWER PLANT AMOUNTING TO RS.7,63,69, 274/-. 9. THE LD. D.R. SUBMITTED THAT THE ASSESSEE HAS MAD E WRONG CLAIM OF DEDUCTION U/S 80-IA OF THE ACT AND THE RATIO OF THE DECISION OF HONBLE I.T.A.NO.3455,3188 /AHD/2010 C.O.NO.07/AHD/2011 4 DELHI HIGH COURT RENDERED IN THE CASE OF CIT VS PRA TAAP SINGH OF NABHA, 09 TAXMAN.COM 225 APPLIES TO THE CASE OF THE ASSESS EE. HE SUBMITTED THAT IT IS NOT THE LAW THAT THE ASSESSEE CAN MISREP RESENT AND MAKE WRONG CLAIM AND NOT GOT AWAY SCOT FREE. HE RELIED ON THE ORDER OF THE A.O. 10. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE OF PENALTY LEVIED FOR CLAIM MADE U/S 80-IA OF THE ACT IS COVER ED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF THE TRIBUNAL IN ASSES SEES OWN CASE FOR THE EARLIER ASSESSMENT YEAR 2002-03 WHEREIN, THE PENALT Y LEVIED IN IDENTICAL FACTS WAS CANCELLED BY THE TRIBUNAL. LD. D.R. COUL D NOT CONTROVERT THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT IN IDENTICAL FACTS, THE PENALTY IMPOSED U/S 271(1)(C) OF THE ACT ON CLAIM OF DEDUCTION U/S 80-IA WAS CANCELLED IN THE ASSESSEES OWN CASE IN THE EARLIER ASSESSMENT YEAR 2002-03 BY THE TRIBUNAL. W E, BEING IN AGREEMENT WITH THE DECISION OF THE TRIBUNAL ON THIS ISSUE AND THE FACTS OF THIS CASE BEING IDENTICAL WITH THE FACTS OF THE CASE OF THE A SSESSEE IN THE EARLIER ASSESSMENT YEAR 2002-03, CANCEL THE PENALTY IMPOSED FOR THE RELEVANT ASSESSMENT YEAR BY FOLLOWING THE ORDER OF THE TRIBU NAL FOR THE EARLIER ASSESSMENT YEAR 2002-03 AND ACCORDINGLY, GROUND NO. 2 OF THE REVENUES APPEAL IS DISMISSED. 12. GROUND NO.3 OF THE REVENUES APPEAL IS AS UNDER : 3. THE LD. CIT(A) ERRED IN LAW AND ON FACT S IN DELETING THE PENALTY U/S.271(L)(C) LEVIED ON ACCOUNT OF EXCESS C LAIM FOR DEDUCTION U/S.80IB AMOUNTING TO RS.99,54,440/-. 13. THE LD. D.R. SUBMITTED THAT THE ASSESSEE HAS CL AIMED EXCESS DEDUCTION U/S 80-IB AND THERE IS A CLEAR CASE OF MI SREPRESENTATION IN TAX AND THEREFORE, THE PENALTY U/S 271(1)(C) OF THE ACT WAS RIGHTLY IMPOSED AS HELD BY HONBLE DELHI HIGH COURT RENDERED IN THE CA SE OF CIT VS NALWA I.T.A.NO.3455,3188 /AHD/2010 C.O.NO.07/AHD/2011 5 SONS INVESTMENTS LTD. 327 ITR 543 (DEL.). HE REFER RED TO THE RELEVANT PORTION OF THE PENALTY ORDER IN SUPPORT OF THE CASE OF THE REVENUE. HE RELIED ON THE ORDER OF THE A.O. 14. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AT THE TIME WHEN THE ASSESSEE MADE THE CLAIM FOR DEDUCTION U/S 80-IB OF THE ACT, THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT RENDERED IN TH E CASE OF CIT VS INDIA GELATINE AND CHEMICALS LTD. AS REPORTED IN 275 ITR 284 WAS IN FAVOUR OF THE ASSESSEE AND, THEREFORE, IT CANNOT BE SAID THAT THE CLAIM MADE BY THE ASSESSEE FOR DEDUCTION WAS NOT BONA FIDE. HE SUBM ITTED THAT THERE WAS NO INCOME FOR THE RELEVANT ASSESSMENT YEAR THE ASSE SSEE WAS NOT LIABLE TO INCOME TAX EXCLUDING THE MAT CALCULATION AND, THERE FORE, AS PER THE RATIO LAID DOWN IN THE DECISION OF HONBLE DELHI HIGH COU RT RENDERED IN THE CASE OF NALWA SONS INVESTMENTS LTD. (SUPRA), NO PEN ALTY U/S 271(1)(C) OF THE ACT IS LEVIABLE UPON THE ASSESSEE. 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT THE ISSUE OF DEDUCTION U/S 80-IB OF THE ACT WAS HIGHLY DEBATA BLE IN NATURE. AT THE TIME OF FILING THE RETURN FOR THE ASSESSMENT YEAR 2 004-05, THERE WERE PRONOUNCEMENTS BY THE HONBLE COURTS IN FAVOUR OF T HE ASSESSEE. THE CIT(A) HAS DELETED THE PENALTY BY OBSERVING THAT SI MILAR ADDITION MADE IN THE EARLIER ASSESSMENT YEAR 2003-04 WAS DELETED BY ITAT VIDE ORDER DATED 24.07.2009 AND ALSO THAT AT THE TIME OF MAKIN G THE CLAIM BY THE ASSESSEE, THERE WERE SEVERAL DECISIONS IN FAVOUR OF THE ASSESSEE. LD. CIT(A) HAS FURTHER OBSERVED THAT IN ANY CASE, THIS ISSUE WAS DEBATABLE AND ON SUCH DEBATABLE ISSUE, PENALTY U/S 271(1)(C) COUL D NOT BE LEVIED. WE FIND THAT THIS ISSUE BEING DEBATABLE AND THERE BEIN G DECISIONS IN FAVOUR OF THE ASSESSEE AT THE TIME OF FILING OF RETURN FOR TH E RELEVANT ASSESSMENT YEAR, IT COULD NOT BE SAID THAT THE CONDUCT OF THE ASSESSEE IN CLAIMING THE DEDUCTION WAS NOT BONA FIDE. IN THIS VIEW OF THE M ATTER, WE HOLD THAT IT IS I.T.A.NO.3455,3188 /AHD/2010 C.O.NO.07/AHD/2011 6 NOT A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT WHICH WAS ACCORDINGLY CANCELLED BY THE CIT(A) AND THE ORDER O F LD. CIT(A) IS CONFIRMED. GROUND NO.3 OF THE REVENUES APPEAL IS DISMISSED. 16. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. 17. IN THE COMBINED RESULT, THE APPEAL OF THE ASSES SEE IN I.T.A.NO. 3455/AHD/2010 IS ALLOWED AND THE APPEAL OF THE REVE NUE IN I.T.A.NO. 3188/AHD/2010 AND THE CROSS OBJECTION IN C.O. NO.07 /AHD/2011 OF THE ASSESSEE ARE DISMISSED. 18. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD./- SD./- (B.P.JAIN) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) BY ORDER 5. THE DR, AHMEDABAD 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 30/12/2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER - 02/01/2012. OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 19/01 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.24/01 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 24/01/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. ..