M/s. Ankur Chemfood Ltd., Ahmedabad V. The Dy.CIT.,Circle-1, Ahmedabad

ITA 1019/AHD/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9918 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 27-10-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 12-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K C THAKER
• Keywords: Business income; Depreciation; Revised return; Unabsorbed depreciation; Bonafide mistake; Capital expenditure
• Section: 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER M/S. ANKUR CHEMFOOD LTD, 9 - B, SUMATINAGAR SOCIETY, USMANPURA, AHMEDABD380013 PAN:AABCA 8203 F (APPELLANT) VS THE DCIT, CIRCLE - 1, AHMEDABAD (RESPONDENT) REVENUE BY : S H RI PRASOON KABRA , SR. D . R. ASSESSEE BY: S H RI K.C. THAKER , A.R. DATE OF HEARING : 27 - 10 - 2 016 DATE OF PRONOUNCEMENT : 17 - 11 - 2 016 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS ASSES SEE S APPEAL FOR A.Y. 2008 - 09 , AR I SES FROM ORDER OF THE CIT(A) - XXI, AHMEDABAD DATED 05 - 11 - 2012 IN APPEAL NO. CIT(A) - XXI/190/11 - 12 , IN UPHOLDING THE PENALTY OF RS. 3,90,750/ - , IN PROCEEDI NGS UNDER SECTION 271(1 ) (C) OF THE INCOME TAX ACT, 1961; IN SHORT TH E ACT . I T A NO . 1019 / A HD/20 13 A SSESSMENT YEAR 200 8 - 09 I.T.A NO. 1019 /AHD/20 13 A.Y. 2008 - 09 PAGE NO M/S. ANKUR CHEMFOOD L TD. VS. DCIT 2 2. IN THIS CASE , ASSESSEE HAS FILED APPLICATION DATED 5/09/2016 FOR CONODANATION OF DELAY IN FILING APPEAL FOR A PERIOD OF ABOUT THREE MONTHS. ASSESSEE HAS FILED AFFIDAVIT OF SHRI HARESH MAHESHWARI WORKING AS CLERK IN THE OFFICE OF THE ASSESSEE. IT WA S EXPLAINED THAT THE CLERK OF THE ASSESSEE HAS INADVERTENTLY MISPLACED THE ORDER PASSED BY LD. COMMISSIONER OF INCOME TAX (A) AS A RESULT DELAY WAS OCCURRED IN FI LING THIS APPEAL BEFORE THE HON BLE ITAT. W E HAVE GONE THROUGH THE AFFIDAVIT AND APPLICA TION OF THE ASSESSEE AND WE CONSIDER ED THE CIRCUMSTANCES AS STATED ABOVE BY THE ASSESSEE WHICH RESULTED IN DELAY IN FI LING THIS APPEAL. WE FIND T HAT THERE IS A BONAFIDE MISTAKE ON T H E PART OF THE STAFF AS A RESULT THE PRESENT APPEAL HAS NOT BEEN FILED IN TIME, THEREFORE, WE CONDONE THE DELAY IN FILING THIS APPEAL. 3. BRIEF FACTS OF THE CASE, ASSESSEE HAS FILED RETU RN OF INCOME ON 27TH SEPTEMBER, 2008 DECLARING TOTAL INCOME OF RS. 9 , 55 , 408/ - . THEREAFTER , ASSESSEE FILED REVISED RETURN ON 06/02/2009 DECLARIN G TOTAL INCOME OF RS. 41 , 21 , 020/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF RS. 3,10,000/ - ON ACCOUNT OF FEES AND STAMP DUTY PAID FOR INCREASE IN THE AUTHORIZED SHARE CAPITA L OF THE COMPANY. THE ASSESSING OFFICER MADE ADDITIONS OF THESE EXPENDITURE S TO THE TOTAL INCOME ON THE GROUND THAT THE NATURE OF THESE EXPENDITURES ARE OF CAPITAL NATURE WHICH CANNOT BE ALLOWED U/S 37 OF THE ACT. FURTHER THE ASSESSING OFFICER HAS ALSO N OTICED THAT ASSESSEE HAS SET OFF THE UNABSORBED DEPRECIATION TO THE AMOUNT OF RS. 8 , 39 , 567/ - PERTAINING I.T.A NO. 1019 /AHD/20 13 A.Y. 2008 - 09 PAGE NO M/S. ANKUR CHEMFOOD L TD. VS. DCIT 3 TO A.Y. 1999 - 2000 AND SET OFF THE SAME AGAINST THE INCOME OF THE CURRENT YE A R. THE ASSESSING OFFICER HAS DISALLOWED THE SET OFF ON THE GROUND THAT LI MITATION OF BEING ELIGIBLE FOR SET OFF AGAINST THE BUSINESS INCOME IS ONLY UPTO 8 YEARS AS PER SECTION 32(2) OF THE IT ACT. THEREAFTER , THE ASSESSING OFFICER HAS INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) FOR FURNISHING INACCURATE PARTICULARS OF INC OME FOR BOTH THE ADDITIONS MADE AS STATED ABOVE . D URING THE COURSE OF PENALTY PROCEEDINGS , THE ASSESSEE HAS STATED BEFORE THE ASSESSING OFFICER THAT THEY HAVE NEITHER CONCEALED ANY INCOME NOR FURNISHED ANY PARTICULARS OF INCOME AND PROVISIONS OF SECTION 2 71(1)(C) OF THE ACT A RE NOT ATTRACTED . THE ASSESSEE HAS STATED THAT THEY HAVE SUBMITTED ALL THE DETAILS OF UNABSORBED DEPRECIATION AND EXPENDITURE INCURRED TOWARDS INCREASE D IN SHARE CAPITAL ALONG WITH RETURN OF INCOME AND NOTHING HAS BEEN CONC EALED. T H E ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE AND HE LEVIED A PENALTY OF RS. 3 , 90 , 750/ - ON ACCOUNT OF FILING OF INACCURATE PARTICULARS OF IN COME U/S 271(1)(C) OF THE ACT. A GGRIEVED AGAINST THE ORDER OF ASSESSING OFFICER, THE ASSESSE E HAS FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) . THE LD. CIT(A) HAS SUSTAINED TH E PENALTY LEVIED BY THE ASSESSING OFFICER STATING THAT HE IS OF THE VIEW THAT THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOM E AND THE DECISION OF T HE COMMISSIONER OF INCOME TAX(A) IS REPRODUCED AS UNDER: - 4.12 I HAVE PERUSED PENALTY ORDER U/S. 271(1)(C) OF THE I.T. ACT PASSED BY THE AO AND THE WRITTEN SUBMISSIONS MADE BY THE APPELLANT INCLUDING THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE APPE LLANT. I AM OF THE VIEW THAT THE APPELLANT HAD FILED INACCURATE PARTICULARS OF INCOME BY CLAIMING PATENT INADMISSIBLE CAPITAL EXPENDITURE, IN VIEW OF THE JUDGEMENT OF THE HON'BLE APEX COURT. I.T.A NO. 1019 /AHD/20 13 A.Y. 2008 - 09 PAGE NO M/S. ANKUR CHEMFOOD L TD. VS. DCIT 4 THE AO IS CORRECT IN HOLDING THAT THE APPELLANT, HAS FILED INACCU RATE PARTICULARS OF ITS INCOME WHICH WOULD HAVE LED TO PAYMENT OF LOWER TAXES HAD THE APPELLANT'S CASE WAS NOT IN SCRUTINY. CONSIDERING THE ABOVE, I AM OF THE VIEW AO HAS CORRECTLY IMPOSED PENALTY OF US.3,90,750/ - U/S. 271(1)(C) OF THE I.T. ACT AND HENCE T HE SAME IS HEREBY CONFIRMED. 4. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LEARNED COUNSEL OF THE ASSESSEE STATED THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN SUSTAINING THE PENALTY LEVIED BY THE ASSESSING OFFICER AS IT HAS NOT FURNI SHED ANY INACCURATE PARTICULARS OF INCOME. ON THE OTHER HAND, LD. DR RELIED ON THE ORDER OF THE COMMISSIONER OF INCOME TAX (A) . 5. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE HAS INCURRED LEGAL EXPENSES O F RS. 3,10,000/ - ON ACCOUNT OF INCREASE D IN AUTHORIZED CAPITAL AND CLAIMED UNABSORBED DEPRECIATION OF RS. 8 , 39 , 567/ - PERTAINING TO ASSESSMENT YEAR 1999 - 2000. THE LD. C OUNSEL HAS ALSO PLACED RELIANCE ON THE DECISION OF SUPREME COURT IN THE CASE OF CIT VS . RELIANCE PETRO - PRODUCTS PVT. LTD (2010) 322 ITR 158] (SC). ON THE OTHER HAND, LD. D.R. RELIED ON THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX(A). 6. WE FIND THAT THE ASSESSEE HAS SUBMITTED ALL THE RELEVANT PARTICULARS OF YEAR - WISE BROUGHT FORWARD DEPRECIA TION AND SET OFF IN THE RETURN O F INCOME. SIMILARLY, THE ASSESSEEE HAS DEBITED IN THE PROFIT AND LOSS ACCOUNT THE EXPENDITURE INCURRED TOWARD INCREASED IN THE AUTHORIZED SHARE CAPITAL OF THE ASSESSEE. WE HAVE CONSIDERED I.T.A NO. 1019 /AHD/20 13 A.Y. 2008 - 09 PAGE NO M/S. ANKUR CHEMFOOD L TD. VS. DCIT 5 THE ABOVE STATED FACTS AND CIRCUMSTANCES AND FIND THAT THE ASSESSEE HAS NOT FURNISHED INACCURATE PARTICULARS OF INCOME AND THE ASSESSING OFFICER HAS ONLY DISALLOWED THE CLAIM OF THE ASSESSEE. THEREFORE, WE ARE NOT INCLINED TO UPHOLD THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX( A). 7 . IN THE END, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 17 - 11 - 201 6 SD/ - SD/ - ( S.S. GODARA ) ( AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 1 7 /11 /2016 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,