AARTI INDUSTRIES LIMITED , MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX 15(1)(1), MUMBAI

ITA 1086/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8156 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 26-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MICHAEL JERALD
• Keywords: Depreciation
• Section: 271(1)(c); 14A; 115JB; 40(a)(ia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 1086/MUM/2019 : A.Y : 2009 - 10 M/S. AARTI INDUSTRIES LTD., 2 ND FLOOR, UDYOG KSHETRA, MULUND GOREGAON LINK ROAD, MULUND (W), MUMBAI 400 080. PAN : AA BCA2787L (APPELLANT) VS. DY . CIT 15(1)(1) , MUMBAI. (RESPONDENT) APPELLANT BY : SHRI ANUJ KISNADWALA RESPONDENT BY : SHRI MICHAEL JERALD DATE OF HEARING : 0 6 /02/2020 DATE OF PRONOUNCEMENT : 17 /0 6 /2020 O R D E R PER SHAMIM YAHYA , ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF LEARNED CIT(A) DATED 16.11.2018 AND PERTAINS TO ASSESSMENT YEAR 2009 - 10. THE ISSUE RAISED IS THAT LEARNED CIT(A) ERRED IN SUSTAINING THE PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT ) AMOUNTING TO RS.66,34,096/ - ON ACCOUNT OF THE FOLLOWING DISALLOWANCE: - I) DISALLOWANCE UNDER SECTION 14A ; II) DISALLOWANCE UNDER SECTION 14A WHILE COMPUTING THE BOOK PROFIT UNDER SECTION 115JB OF THE ACT ; ITA NO. 1086/MUM/2019 AARTI INDUSTRIES LTD. III) DISALLOWANCE OF PRIOR PER IOD EXPENSES UNDER SECTION 40(A)(IA) OF THE ACT; IV) DISALLOWANCE ON ACCOUNT OF UNRECONCILED DIFFERENCE IN AIR; V) DISALLOWANCE ON ACCOUNT OF DEPRECIATION ON NON - EXISTING ASSETS. 2. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PENALTY CONFIRMATION ORDER OF THE LEARNED CIT(A) IS WITHOUT CONSIDERING THE ITAT ORDER IN THE APPEAL BY THE ASSESSEE IN ITA NO. 7039/MUM/2014 IN QUANTUM PROCEEDING. HE SUBMITTED THAT ITAT HAS GRANTED SUBSTANTIAL RELIED TO THE ASSESSEE. LEARNED COUNSEL SUBMITTED THAT WHILE ITAT HAS GRANTED RELIEF ON ACCOUNT OF DISALLOWANCE UNDER SECTIONS 14A AND 40(A)(IA) OF THE ACT, OTHER ISSUES HAVE BEEN REMITTED BACK TO THE ASSESSING OFFICER. 3. ON THE OTHER HAND, THE LEARNED DEPARTM ENTAL REPRESENTATIVE DID NOT DISPUTE THE PROPOSITION THAT THE CONFIRMATION OF PENALTY ORDER IS WITHOUT CONSIDERING THE DECISION OF THE ITAT IN THE QUANTUM PROCEEDINGS. 4. UPON CAREFUL CONSIDERATION ON THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT ON THE ISSUES WHICH ITAT HAS DELETED THE DISALLOWANCE, THE PENALTY THEREON DOES NOT SURVIVE. THE ISSUE ON WHICH THE ITAT IN QUANTUM PROCEEDINGS HAS REMITTED THE MATTER TO THE FILE OF ASSESSING OFFICER, THE PENALTY WITH REGARD TO T HEM ALSO NEEDS TO BE REMITTED TO THE FILE OF THE ASSESSING OFFICER. WITH RESPECT TO THE MATTERS REMITTED BY THE ITAT IN QUANTUM PROCEEDINGS, THE ASSESSING OFFICER SHALL CONSIDER THE ISSUE OF PENALTY AFRESH AFTER PASSING THE CONSEQUENTIAL ORDER UPON THE IT AT ORDER. WE DIRECT AND ORDER ACCORDINGLY. ITA NO. 1086/MUM/2019 AARTI INDUSTRIES LTD. 5. IN THE RESULT, THIS APPEAL BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN COURT ON 17 TH DAY OF JUNE, 2020 UNDER RULE 34(4) OF ITAT RULES . SD/ - SD/ - (PAWAN SINGH) JUDICIAL MEMBER (SHAMIM YAHYA) ACCOUNTANT MEMBER MUMBAI, DATE : 17 TH JUNE, 2020 *SSL* COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, A BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI