The DCIT, Central Circle-1(1), Ahmedabad V. Nirma Ltd., Ahmedabad

ITA 1090/AHD/2007

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6156 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-02-2017
• Assessment Year: 1999-2000
• Appeal Filed On: 13-03-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KISHAN VYAS
• Assessee Lawyers: S N SOPARKAR
• Section: 27

Judgement Text

ITA NO. 1090 / AHD/20 07 ASSESSMENT Y EAR: 1999 - 2000 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND MAHAVIR PRASAD JM] ITA NO. 1090 /AHD/20 07 ASSESSMENT Y EAR : 1999 - 2000 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(1), AHMEDABAD. ... . . ......... APPELLANT VS. NIRMA LIMITED ... .......... .RESPONDENT NIRMA HOUSE, ASHRAM ROAD, AHMEDABAD. [PAN: AAACN 5350 K ] APPEARANCES BY KISHAN VYAS FOR THE A PPELLANT S.N. SOPARKAR FOR THE R E SPONDENT HEARING CONCLUDED ON: 07.02 .2 017 ORDER PRONOUNCED ON : 26 . 0 4 .2017 O R D E R PER PRAMOD KUMAR , AM: 1. THIS APPEAL CHALLENGES CORRECTNESS OF LEARNED CIT(A) S ORDER DATED 10 TH JANUARY, 2007, CANCELLING PENALTY OF RS.2,25,00,000/ - IMPOSED ON THE ASSESSEE UNDER SECTION 27 1(1)(C) OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 199 - 2000. 2. GRIEVANCES RAISE D IN THIS APPEAL ARE AS FOLLOWS : - 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FAC T S IN CANCELLING PENALTY WITHOUT APPRECIATING THE FACT THAT IT IS CLEAR CUT CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME. .2 THE LD. CIT(A) HAS IGNORED THE FACT THAT THE I .T. A . T . IN ITA NO . 165/AHD/2005 VI D E ORDER DATED 30.08.2006 IN THIS CASE UPHELD THE DISALLOWANCE IN PRINCIPLE. 3. THE LD. CIT(A) HAS IGNORED THE PROVISIONS OF E XPLANATION 1 BELOW SECTION 271(1)(C) OF THE ACT AND VARIOUS CASE LAWS IN THIS REGARD WHILE DELETING THE PENALTY IMPOSED. ITA NO. 1090 / AHD/20 07 ASSESSMENT Y EAR: 1999 - 2000 PAGE 2 OF 4 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE A.O. 5. IT I S , THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) BE SET ASIDE AND TH A T OF THE A.O. BE RESTORED TO THE ABOVE EXTENT. 3. WHEN THIS APPEAL WAS CALLED OUT FOR HEARING, LEARNED COUNSEL POINTED THAT THE RELATED QUANTUM DISALLOWANCE, IN CONNECTION WITH WHICH T HE IMPUGNED PE NALTY IS LEVIED, PERTAINS TO PRE OPERATIVE EXPENSES OF RS 5,76,19,484 ON NEW PROJECTS, I.E. ASH PROJECT AND LAB FRONT END PROJECT. IT WAS THEN POINTED OUT THAT THIS ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL FOR THE ASSESSME NT YEAR 1998 - 99 AND THE APPEAL FILED BY THE COMMISSION, AGAINST THE SAID DECISION, WAS DISMISSED BY HON BLE HIGH COURT. NO SLP HAS BEEN FILED AGAINST HON BLE HIGH COURT S JUDGMENT AND THE MATTER HAS THUS REACHED FINALITY. IN THE PRESENT YEAR, HOWEVER, THE TRIBUNAL TOOK A STAND CONTRARY TO THE ACCEPTED PAST HISTORY OF THE CASE BUT AN APPEAL BEFORE HON BLE HIGH COURT , AS ALSO A RECTIFICATION PETITION BEFORE THE TRIBUNAL , AGAINST THE TRIBUNAL S DECISION FOR THE CURRENT YEAR IS PENDING FOR ADJUDICATION. LEARNED COUNSEL FOR THE ASSESSEE ALSO INVITED OUR ATTENTION TO THE COPIES OF TRIBUNAL DECISIONS FOR THE SUBSEQUENT YEARS, WHERE SIMILAR DISALLOWANCE IS DELETED, AND JUDGMENT OF HON BLE HIGH COURT UPHOLDING THIS STAND OF THE TRIBUNAL. IT WAS THUS SUBMITTED THAT PE NALTY CANNOT BE IMPOSED IN RESPECT OF A QUANTUM ADDITION WHICH IS CONTRARY TO HON BLE JURISDICTIONAL HIGH COURT S DECISION IN THIS REGARD. 4. LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE STAND OF THE ASSESSING OFFICER AS ALSO DECISION OF THE TRIBU NAL, IN QUANTUM PROCEEDINGS, FOR THE PRESENT ASSESSMENT YEAR. HE, HOWEVER, DID NOT HAVE MUCH TO SAY ON THE ISSUES RAISED BY THE LEARNED COUNSEL. ITA NO. 1090 / AHD/20 07 ASSESSMENT Y EAR: 1999 - 2000 PAGE 3 OF 4 5. WE SEE MERITS IN LEARNED COUNSEL S PLEA. WE HAVE NOTED THAT VIDE JUDGMENT DATED 2 ND SEPTEMBER 2014, DEALING WITH MATERIALLY IDENTICAL DISALLOWANCES, HON BLE HIGH COURT HAS UPHELD THE ACTION OF THE TRIBUNAL IN DELETING THE DISALLOWANCES IN QUESTION. QUESTION NOS. 12 AND 13 BEFORE THEIR LORDSHIPS, AS RAISED BY THE REVENUE AND CHALLENGING THE CORRECTNESS OF THE DE CISION OF THE TRIBUNAL TO DELETE THE SIMILAR DISALLOWANCES, WERE AS FOLLOWS: 12. WHETHER THE APPELLATE TRIBUNAL WAS RIGHT IN LAW AND ON FACTS IN CONFIRMING THE ORDER OF THE CIT(A) DELETING THE DISALLOWANCE OF SODA ASH PROJECT INTEREST EXPENSES OF RS 8,08,2 1,658 AND RS 27,35,94,647 LAB PROJECT INTEREST EXPS? 13. WHETHER THE APPELLATE TRIBUNAL WAS RIGHT IN LAW AND ON FACTS IN CONFIRMING THE ORDER OF THE CIT(A) DELETING THE DISALLOWANCE OF SODA ASH PROJECT EXPS (OTHER THAN INTEREST EXPS) OF RS 1,33,31,447 AND RS 3,46,83,209 (OTHER THAN INTEREST EXPS) OF LAB PROJECT ? 6. THEIR LORDSHIPS HAVE UPHELD THE ACTION OF THE TRIBUNAL ON BOTH THE POINTS. IN THIS VIEW OF THE MATTER, THE CONCLUSION ARRIVED AT BY THE LEARNED CIT(A), IN DELETING THE PENALTY RELATING TO THES E QUANTUM DISALLOWANCES, WAS INDEED CORRECT AND IT CALLS FOR NO INTERFERENCE. HUMBLY FOLLOWING THE ESTEEMED VIEWS OF HON BLE JURISDICTIONAL HIGH COURT, WE UPHOLD THE ORDER OF THE CIT(A) ON THIS POINT AND DECLINE TO INTERFERE IN THE MATER. 7. IN THE RESULT , THE APPEAL IS DISMISSED . PRONOUNCED IN THE OPEN COURT TODAY ON THE 26 TH DAY OF APRIL, 2017. SD/ - SD/ - MAHAVIR PRASAD PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 26 TH DAY OF APRIL , 2 01 7 . PBN/* ITA NO. 1090 / AHD/20 07 ASSESSMENT Y EAR: 1999 - 2000 PAGE 4 OF 4 COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD