DEPUTY COMMISSIONER OF INCOME TAX, Alwar V. DEEPAK VEGPRO PVT. LTD, Alwar

ITA 1035/JPR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2101 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 27-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM SINGH
• Assessee Lawyers: P C PARWAL CA DHK
• Keywords: Capital receipt; Revised return

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SIN GH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 1035 & 1036/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2010-11 & 2011-12. DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, ALWAR. CUKE VS. M/S DEEPAK VEGPRO PVT. LTD., OLD INDUSTRIAL AREA, ITARANA ROAD, ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAACD 6118 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAM SINGH (ADDL. CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 21.02.2018. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 22/02/2018. VKNS'K@ ORDER PER BENCH: THESE ARE TWO APPEALS FILED BY THE REVENUE AGAINST THE SEPARATE ORDERS OF LD. CIT(A)-4, JAIPUR, BOTH DATED 11.10.2017 FOR THE A.Y. 2010-11 AND 2011-12 RESPECTIVELY, WHEREIN THE REVENUE HAS CHALL ENGED THE ACTION OF LD. CIT(A) IN DELETING THE LEVY OF PENALTY U/S 271(1)(C ) OF THE ACT. ITA NO. 1035/JP/2017 THE GROUND RAISED BY THE REVENUE IS AS UNDER:- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE CIT(A) WAS RIGHT IN DELETING THE PENALTY OF RS. 34,14,478/- WI THIN THE MEANING OF SECTION 271(1)(C) OF THE IT ACT. ON THE BASIS OF THAT VAT SUBSIDY RECEIVED BY THE ASSESSEE FROM THE GOVERNMENT OF BIHAR IS A CAPITAL RECEIPT AND ACCORDINGLY NOT CHARGEABLE TO TAX. 2 ITA NOS. 1035 & 1036/JP/2017. M/S DEEPAK VEGPRO PVT. LTD., ALWAR. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE HAS FURNISHED REVISED RETURN OF INCOME WHEREIN THE VAT REIMBURSEMENT OF R S. 1,00,45,602/- WAS CLAIMED AS NON TAXABLE BEING IN THE NATURE OF CAPIT AL RECEIPTS, IN VIEW OF THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE O F CIT VS. RELIANCE INDUSTRIES LTD., DATED 15/04/2009. AS PER ASSESSIN G OFFICER, THE DEPARTMENT HAS NOT ACCEPTED THE DECISION OF HONBLE BOMBAY HIG H COURT AND SLP HAS BEEN FILED BEFORE THE HONBLE SUPREME COURT, WHO HA S STAYED THE OPERATION OF THE AFORESAID ORDER. ACCORDINGLY, THE CLAIM OF THE ASSESSEE WAS REJECTED AND THE AMOUNT OF RS. 1,00,45,602/- WAS BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE COMPANY. SIMULTANEOUSLY, PENALTY PROCEEDI NGS U/S 271(1)(C) READ WITH SECTION 274 WERE INITIATED FOR CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME. 3. DURING THE PENALTY PROCEEDINGS, THE AO OBSERVED THAT THE LD. CIT(A) HAS CONFIRMED THE SAID ADDITION ON ACCOUNT OF VAT S UBSIDY AND REITERATING THE POSITION TAKEN DURING THE COURSE OF ASSESSMENT PROC EEDINGS, HE WAS OF THE VIEW THAT IT IS A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. HENCE, PENALTY @ 100% OF THE TAX SOUGHT TO BE EVADED AMOUN TING TO RS. 34,14,478/- WAS LEVIED ON THE ASSESSEE COMPANY. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER AN APPEAL BEFORE THE LD. CIT(A). IN THE INTERIM, THE CO-ORDINATE BENCH O F THE TRIBUNAL IN ITA NO. 3 ITA NOS. 1035 & 1036/JP/2017. M/S DEEPAK VEGPRO PVT. LTD., ALWAR. 704/JP/2014 DATED 24.04.2017 DELETED THE SAID ADDIT ION IN THE HANDS OF THE ASSESSEE COMPANY. THE LD. CIT(A) FOLLOWING THE ORDE R OF THE CO-ORDINATE BENCH HELD THAT SINCE THE QUANTUM ADDITION HAS BEEN DELETED, THERE IS NO REASON FOR IMPOSITION OF PENALTY. ACCORDINGLY, HE DELETED THE PENALTY SO LEVIED BY THE ASSESSING OFFICER. NOW, THE REVENUE IS IN A PPEAL BEFORE US. 5. DURING THE COURSE OF HEARING, THE LD. AR SUBMI TTED THAT THE DECISION OF THE COORDINATE BENCH IN THE QUANTUM PROCEEDINGS HAS SINCE BEEN AFFIRMED BY THE HONBLE RAJASTHAN HIGH COURT IN ITA NO. 300 & 3 01 OF 2017 DATED 2-01- 2018. IT WAS ACCORDINGLY SUBMITTED THAT IN THE INST ANT CASE, THERE IS NO BASIS FOR LEVYING OF PENALTY. HENCE, THE ORDER OF THE LD. CIT(A) MAY BE CONFIRMED. 6. PER CONTRA, LD. D/R SUBMITTED THAT THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT MAY NOT BE ACCEPTABLE TO THE D EPARTMENT AND IT IS LIKELY THAT THE DEPARTMENT WOULD BE SHORTLY MOVING AN SLP AGAINST THE SAID DECISION. FURTHER, HE RELIED ON THE ORDER OF THE A SSESSING OFFICER. 7. AFTER HEARING BOTH THE PARTIES AND PURSUING THE MATERIAL AVAILABLE ON RECORD, IT IS NOT IN DISPUTE THAT THE QUANTUM ADDIT ION IN RESPECT OF VAT REIMBURSEMENT OF RS. 1,00,45,602/- HAS SINCE BEEN D ELETED BY THE CO-ORDINATE BENCH IN ASSESSEES OWN CASE FOR THE IM PUNGED ASSESSMENT YEAR AND THE SAME HAS RECENTLY BEEN CONFIRMED BY THE HON BLE RAJASTHAN HIGH 4 ITA NOS. 1035 & 1036/JP/2017. M/S DEEPAK VEGPRO PVT. LTD., ALWAR. COURT. WHERE THE VERY BASIS FOR LEVY OF PENALTY HA S BEEN DELETED, THE LEVY OF PENALTY CANNOT STAND ON ITS OWN. IN VIEW OF THE SA ME, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHO HAS RI GHTLY DELETED THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. IN THE RESULT, S OLE GROUND OF REVENUES APPEAL IS DISMISSED. ITA NO. 1036/JP/2017 8. NOW, WE TAKE ITA NO. 1036/JP/2017 PERTAINING TO THE A.Y. 2011-12. BOTH PARTIES HAVE SUBMITTED BEFORE US THAT THE FACT S AND CIRCUMSTANCES OF THE CASE ARE EXACTLY IDENTICAL. ACCORDINGLY, FOLLOWING OUR DECISION IN ITA NO. 1035/JP/2017, WE DO NOT SEE ANY INFIRMITY IN THE OR DER OF THE LD. CIT(A) WHO HAS RIGHTLY DELETED THE LEVY OF PENALTY U/S 271(1)( C) OF THE ACT. IN THE RESULT, SOLE GROUND OF REVENUES APPEAL IS DISMISSED. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVENU E ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/02/2018. SD/- SD/- ( JH FOT; IKY JKO ) ( FOE FLAG ;KNO ( VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL; /ACCOUNTANT MEMBER JAIPUR DATED:- 22/02/2018. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT-DCIT, CENTRAL CIRCLE, ALWAR. 2. THE RESPONDENT M/S DEEPAK VEGPRO PVT. LTD., AL WAR. 3. THE CIT. 4. THE CIT (4), 5. THE DR, ITAT, JAIPUR 5 ITA NOS. 1035 & 1036/JP/2017. M/S DEEPAK VEGPRO PVT. LTD., ALWAR. 6. GUARD FILE (ITA NO. 1035 & 1036/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR