ACIT, Ludhiana V. M/s Abhishek Industries Limited, Ludhiana

ITA 11/CHANDI/2015

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 8741 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 16-03-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 06-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JYOTI KUMARI
• Keywords: Capital receipt; Revised return
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 11/CHD/2015 (ASSESSMENT YEAR : 2005-06) THE D.C.I.T., VS. M/S ABHISHEK INDUSTRIES LTD., CIRCLE -1, E-212, KITCHLU NAGAR, LUDHIANA. LUDHIANA. PAN: AABCA4139J (APPELLANT) (RESPONDENT) APPELLANT BY : SMT.JYOTI KUMARI, DR RESPONDENT BY : SHRI ASHWANI KUMAR DATE OF HEARING : 16.03.2015 DATE OF PRONOUNCEMENT : 18.03.2015 O R D E R PER BHAVNESH SAINI, J.M. : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF LEARNED COMMISSIONER OF INCOME (APPEAL S)-I, LUDHIANA DATED 27.10.2014 FOR ASSESSMENT YEAR 2005- 06, CHALLENGING THE CANCELLATION OF PENALTY UNDER SECTI ON 271(1)(C) OF THE INCOME TAX ACT, 1961. 2. BRIEFLY, THE FACTS ARE THAT PENALTY WAS IMPOSED UNDER SECTION 271(1)(C) OF THE ACT FOR FURNISHING INACCUR ATE PARTICULARS OF INCOME. THE ASSESSING OFFICER IMPO SED PENALTY ON THE BASIS OF THE FACT THAT THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF THE ASSESSEE ITSELF FOR ASSESSMENT YEAR 2003-04 HAS HELD THAT THE SALES TAX SUBSIDY WA S IN THE 2 NATURE OF REVENUE RECEIPT AND MERELY FILING OF SLP OR ADMISSION THEREOF BY THE HON'BLE APEX COURT DOES N OT GIVE ASSESSEES CHOICE TO TREAT THE SAME AS CAPITAL RECE IPT. THE ASSESSING OFFICER HELD THAT THE ASSESSEE KNEW BEFOR E THE FILING OF THE REVISED RETURN THAT THE JURISDICTIONAL HIGH COURT HAD HELD THAT THE EXEMPTION OF SALES TAX AS TAXABLE BY TREATING THE SAME AS REVENUE RECEIPT, THE ASSESSEE HAD DELIBERAT ELY CLAIMED AS CAPITAL RECEIPT. THE ASSESSING OFFICER FURTHER RECORDED THAT THE DEPARTMENT HAD NOT ACCEPTED THE O RDER OF THE HON'BLE HIGH COURT FOR ASSESSMENT YEAR 2006-07 IN WHICH PENALTY IMPOSED ON IMILAR ISSUE WAS DELETED AND FU RTHER SLP HAD BEEN FILED. THE ASSESSEE SUBMITTED BEFORE THE LEARNED CIT (APPEALS) THAT ASSESSEE IS A PUBLIC LIMITED COMPANY AND FILED THE RETURN OF INCOME FOR ASSESSMENT YEAR UNDER CONS IDERATION AND ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS COMPLETED. WHILE FILING THE RETURN, THE ASSESSEE HAD CLAIMED SALES TAX EXEMPTION AVAILED DURING THE YEAR AS CAPI TAL RECEIPT AND REDUCED IT FROM THE TAXABLE INCOME. LIKEWISE, THE ASSESSEE HAD NOT MADE ANY DISALLOWANCE ON ACCOUNT O F INTEREST UNDER SECTION 36 (1)(III) OF THE ACT ON TH E INTEREST FREE ADVANCE WHICH HAS BEEN WORKED OUT BY THE ASSESSING OFFICER AT RS.26,75,942/-. ON BOTH THE ISSUES, NO DOUBT, THE HON'BLE PUNJAB & HARYANA HIGH COURT HAD DECIDED THE APPEAL AGAINST THE ASSESSEE COMPANY FOR ASSESSMENT YEAR 2003-04 (2 86 ITR 1). BUT FACT OF THE MATTER IS THAT SLP ALREADY ST ANDS ADMITTED BY THE HON'BLE SUPREME COURT. THE ASSESS ING OFFICER HAS LEVIED PENALTY ON BOTH THE ABOVE GROUND S. IT WAS FURTHER SUBMITTED THAT PENALTY UNDER SECTION 271(1) (C) OF THE 3 ACT WAS LEVIED ON THE SAME GROUNDS FOR ASSESSMENT Y EARS 2004-05 AND 2006-07 ALSO, WHICH WERE DELETED BY THE LEARNED CIT (APPEALS) VIDE ORDER DATED 10.12.2010. THE AS SESSING OFFICER FAILED TO APPRECIATE THE FACTS OF THE CASE. IT WAS FURTHER SUBMITTED THAT SIMILAR ISSUE IN PENALTY MAT TER OR EXEMPTION OF SALES TAX CAME UP FOR CONSIDERATION BE FORE THE I.T.A.T., CHANDIGARH BENCH IN THE CASE OF M/S BHUSH AN POWER & STEEL LTD. IN ITA NOS. 70 & 71/CHD/2012 FOR ASSES SMENT YEARS 2005-06 AND 2006-07 AND THE TRIBUNAL FOLLOWIN G THE DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. GURDASPUR COOPERATIVE SUGAR MILLS, 354 ITR 27 UPHELD THE ORDER OF THE LEARNED CIT (APPEALS) IN DELETING THE PENALTY. IT WAS, THEREFORE, SUBMITTED THAT TH E PENALTY IS NOT LEVIABLE IN THE CASE OF THE ASSESSEE AS WELL. 3. THE LEARNED CIT (APPEALS) CONSIDERING THE MATERI AL ON RECORD OBSERVED THAT SIMILAR PENALTY IMPOSED IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEARS 2004-05 AND 2006- 07 HAVE BEEN DELETED BY HIS PREDECESSOR VIDE ORDER DATED 10 .12.2010. THE ASSESSING OFFICER ALSO RECORDED THAT IN ASSESSM ENT YEAR 2006-07 ALSO, PENALTY HAS BEEN CANCELLED BY THE HON 'BLE HIGH COURT. IT WAS ALSO NOTED THAT THE I.T.A.T., CHAND IGARH BENCH IN THE CASE OF M/S BHUSHAN POWER & STEEL LTD.(SUPR A) ALSO CANCELLED THE PENALTY. THE LEARNED CIT (APPEALS) ALSO NOTED THAT THE ISSUE ON LEVY OF PENALTY WAS WHETHER SALES TAX SUBSIDY WAS CAPITAL OR REVENUE RECEIPT AND ON DISAL LOWANCE OF INTEREST ON AMOUNTS ADVANCED TO SISTER CONCERN ON W HICH PENALTY HAD BEEN CANCELLED EARLIER. THE LEARNED C IT (APPEALS) 4 IN CANCELING THE PENALTY RELIED UPON THE DECISION O F THE HON'BLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS (P) LTD., 322 ITR 158. THE LEARNED C IT (APPEALS) WAS OF THE VIEW THAT THE ASSESSEE HAS NOT FURNISHED INACCURATE PARTICULARS OF INCOME AND ACCORDINGLY CA NCELLED THE PENALTY. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 5. THE LEARNED D.R FOR THE REVENUE RELIED UPON THE ORDER OF THE ASSESSING OFFICER. 6. ON THE OTHER HAND, THE LEARNED COUNSEL FOR ASSES SEE REITERATED THE FACTS SUBMITTED BEFORE THE LEARNED C IT (APPEALS) AND ALSO SUBMITTED THAT IN ASSESSMENT YEAR 2004-05, THE LEARNED CIT (APPEALS) CANCELLED THE PENALTY VIDE OR DER DATED 10.12.2010 ON BOTH THE ISSUES AND BOTH THE PARTIES PREFERRED APPEAL BEFORE THE TRIBUNAL IN ITA NO.1445/CHD/2010 & ITA NO.290/CHD/2011, IN WHICH THE DEPARTMENTAL APPEAL H AS BEEN DISMISSED AND THE APPEAL OF THE ASSESSEE HAS BEEN P ARTLY ALLOWED BY THE TRIBUNAL VIDE ORDER DATED 6.3.2014. HE HAS, THEREFORE, SUBMITTED THAT THE ISSUE IS NOW COVERED IN FAVOUR OF THE ASSESSEE ON BOTH THE ITEMS. IN VIEW OF THE ABO VE AND CONSIDERING THE FINDINGS OF THE LEARNED CIT (APPEAL S), WE ARE OF THE VIEW THAT THE DEPARTMENTAL APPEAL HAS NO MER IT AND IS LIABLE TO BE DISMISSED. IT IS ADMITTED FACT THAT IN ASSESSMENT YEAR 2004-05 PENALTY HAS BEEN CANCELLED BY THE LEAR NED CIT (APPEALS) VIDE ORDER DATED 12.10.2010 ON BOTH THE I TEMS, ON 5 WHICH PENALTY WAS IMPOSED AND THE DEPARTMENTAL APPE AL HAS BEEN DISMISSED BY THE TRIBUNAL VIDE ORDER DATED 6.3 .2014 (SUPRA). IT IS ALSO ADMITTED FACT THAT IN ASSESSM ENT YEAR 2006-07 ALSO THE PENALTY HAS BEEN DELETED BY THE HO N'BLE HIGH COURT AS IS NOTED IN THE IMPUGNED ORDER. CONSIDER ING THE FACTS OF THE CASE IN THE LIGHT OF THE ABOVE DECISIO NS REFERRED TO BY THE LEARNED CIT (APPEALS) IN THE IMPUGNED ORDER AND IN THE LIGHT OF THE ORDER OF THE TRIBUNAL DATED 6.3.2014 F OR ASSESSMENT YEAR 2004-05, WE DO NOT FIND ANY JUSTIFI CATION TO INTERFERE WITH THE ORDER OF THE LEARNED CIT (APPEAL S) IN CANCELING THE PENALTY. WE ACCORDINGLY, DISMISS THE DEPARTMENTAL APPEAL. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 18 TH DAY OF MARCH, 2015. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 18 TH MARCH, 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH