ACIT 8(3), MUMBAI V. SHINGAR LTD, MUMBAI

ITA 1146/MUM/2011

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9438 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 16-02-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 08-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR BORA
• Assessee Lawyers: N K BHUTA
• Section: 143(3); 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL H BE NCH, MUMBAI ! , ' #$ % && , #$ ' BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ./I .T.A. NO.1146/MUM/2011 ( ( ( ( ( / ASSESSMENT YEAR : 2004-05 THE DCIT-8(3), AAYAKAR BHAVAN, MUMBAI-400 020 / VS. M/S. SHINGAR PVT. LTD., KALPATRU 71, NUTAN LAXMI SOCIETY, N.S. ROAD, NO. 8, JVPD SCHEME, VILE PARLE (W), MUMBAI-400 049 $) ' ./ %* ./ PAN/GIR NO. : AABCS 4563J ( )+ / APPELLANT ) .. ( ,-)+ / RESPONDENT ) )+ . / APPELLANT BY: SHRI VIJAY KUMAR BORA ,-)+ / . / RESPONDENT BY: SHRI N.K. BHUTA / 01' / DATE OF HEARING :16.02.2015 23( / 01' / DATE OF PRONOUNCEMENT :16.02.2015 #4 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT(A)-18, MUMBAI DT. 26.11.2010 PERTAINING TO ASSESSMENT YEAR 2004-05. ITA NO. 1146/M/2011 2 2. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD . CIT(A) ERRED IN LAW IN DELETING THE PENALTY AMOUNTING TO RS. 5,41,7 60/- LEVIED BY THE AO U/S. 271(1)(C) OF THE ACT. 3. THE ASSESSEE IS A MANUFACTURER OF KUM KUM & OTHE R COSMETICS MATERIALS. THE RETURN WAS FILED DECLARING TOTAL LOS S AT RS. 24,17,248/-. THE ASSESSMENT WAS MADE U/S. 143(3) OF THE ACT AND VIDE ORDER DT. 20.12.2006, THE RETURNED LOSS WAS REDUCED TO RS. 9, 07,116/-. THE MAIN REASON FOR THE REDUCTION IN THE RETURNED LOSS IS TH AT DUE TO REALLOCATION OF EXPENSES BETWEEN 80IB UNIT AND NON 80IB UNIT BY THE AO ON ESTIMATE BASIS. HOWEVER, THE TAX WAS MADE PAYABLE ON THE BASIS OF M AT PROVISIONS AND EVEN AFTER THE ASSESSMENT THERE WAS NO CHANGE IN MAT PAYABLE BY THE ASSESSEE. THE AO INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT IN RESPECT OF THE DIFFERENCE IN THE RETURNED LOSS AND THE ASSESSED LOSS. THE AO PROCEEDED BY LEVING PENA LTY ON THE DISALLOWANCE OF RS. 15,10,132/-. 4. AGGRIEVED, ASSESSEE CARRIED THE MATTER BEFORE TH E LD. CIT(A) AND EXPLAINED THE FACT. AFTER CONSIDERING THE FACTS AN D THE SUBMISSIONS MADE BY THE ASSESSEE, THE LD. CIT(A) OBSERVED AS UNDER: THE INFORMATION ON RECORD IS CAREFULLY EXAMINED. THE ASSESSEE RETURNED LOSS OF RS. (-)24,17,248/-. THE ASSESSED LOSS WAS RS. (-)9,07,116/-. THE DIFFERENCE WAS DUE TO REALLOCATION OF EXPENSES BETWEEN 80IB UNIT AND NON 80IB UNIT BY AO ON ESTIMATE BASIS. THE ACCOUNTS WERE AUDITED AND REPORT IN FORM 10CCAC FOR CLAIM OF DEDUCTION UNDER 80IB WAS ALSO ON RECORD. IN EITHER CASE, THERE IS NO TAX LIABILITY AS THE RETURNED AND ASSESSED, BOTH WERE L OSSES. THE TAX WAS PAYABLE ONLY ACCORDING TO MAT PROVISIONS. THERE IS NO CHANGE IN MAT PAYABLE OF RS. 51,09,380/-. IN SU CH CIRCUMSTANCES THERE IS NO TAX THAT WAS SOUGHT TO B E EVADED. IT WAS HELD IN THE CASE OF ITO VS WIMCO SIDLING PVT . LTD. (2008) 1145 TTJ (DEL) 986 THAT, WHERE THERE IS NO T AX AS PER ITA NO. 1146/M/2011 3 THE REGULAR INCOME TAX PROVISIONS AND TAX WAS PAYAB LE ONLY ON ACCOUNT OF MAT, IN SUCH CIRCUMSTANCES, PENALTY U /S. 271(1)(C) IS NOT ATTRACTED. ACCORDINGLY AS THERE I S NO TAX THAT WAS SOUGHT TO BE EVADED, NO PENALTY U/S. 271( 1)(C) CAN BE LEVIED. 5. AGGRIEVED BY THIS, REVENUE IS BEFORE US. 6. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUP PORTED THE FINDINGS OF THE AO. 7. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE REL IED UPON THE DECISION OF THE LD. CIT(A). 8. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTH ORITIES BELOW. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAD RETURNED L OSS. IT IS ALSO AN UNDISPUTED FACT THAT THE ASSESSMENT WAS COMPLETED O N A LOSS FIGURE. MEANING THEREBY THAT THE RETURNED LOSS WAS REDUCED BUT STILL THERE REMAINS LOSS AND THEREFORE THE TAX WAS MADE PAYABLE ONLY AC CORDING TO MAT PROVISIONS. THERE IS NO DENIAL THAT THERE IS NO CH ANGE IN MAT PAYABLE OF RS. 51,09,380/-. CONSIDERING THESE PECULIAR FACTS, THERE IS NO TAX THAT WAS SOUGHT TO BE EVADED. THE TRIBUNAL DELHI BENCH IN TH E CASE OF ITO VS WIMCO SIDLING PVT. LTD., HAS HELD THAT WHERE THERE IS NO TAX AS PER THE REGULAR INCOME TAX PROVISIONS AND TAX WAS PAYABLE O NLY ON ACCOUNT OF MAT, IN SUCH CIRCUMSTANCES, PENALTY U/S. 271(1)(C) IS NOT ATTRACTED. THIS DECISION OF THE CO ORDINATE BENCH HAS BEEN FOLLOWED BY THE LD. CIT(A). THEREFORE, NO INTERFERENCE IS CALLED FOR. ITA NO. 1146/M/2011 4 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON 16 TH FEBRUARY, 2015. SD/- SD/- (SANJAY GARG ) (N.K. BILLAIYA) #$ /JUDICIAL MEMBER ' #$ / ACCOUNTANT MEMBER MUMBAI; 5# DATED : 16 TH FEBRUARY, 2015 . . ./ RJ , SR. PS #4 #4 #4 #4 / // / ,0 ,0 ,0 ,0 6(0 6(0 6(0 6(0 / COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,-)+ / THE RESPONDENT. 3. 7 ( ) / THE CIT(A)- 4. 7 / CIT 5. 8& ,0 , , / DR, ITAT, MUMBAI 6. &9 : / GUARD FILE. #4 #4 #4 #4 / BY ORDER, -0 ,0 //TRUE COPY// ; ;; ; / < < < < % % % % (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI