Riddhi Steels & Tubes Limited, Ahmedabad V. DCIT,Circle-3(1)(2), Ahmedabad

ITA 116/AHD/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9373 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-09-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 09-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P B PARMAR
• Keywords: Revenue expenditure; Capital expenditure; Set aside
• Section: 271(1)(c)

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO. 116/AHD/2018 ( ASSESSMENT YEAR : 2012-13) RIDDHI STEEL & TUBE LIMITED 83-84, VILLAGE KAMOD PIPLAJ, PIRANA ROAD, ASLALI, PIPLAJ, AHMEDABAD 382 427 / VS. DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE 3(1)(2), AHMEDABAD ./ ./ PAN/GIR NO. : AACCR0175J ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI P. B. PARMAR, A.R. / RESPONDENT BY : SHRI SATISH SOLANKI, SR.D.R. DATE OF HEARING 19/09/2019 !'# / DATE OF PRONOUNCEMENT 19/09/2019 / O R D E R PER KUL BHARAT - JM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS)-9, AHMEDABAD (CIT(A) IN SHORT), DATED 0 7.11.2017 ARISING IN THE PENALTY ORDER DATED 15.03.2017 PASSED BY THE ASSESSING OFFICER (AO) UNDER S. 271(1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT); CONCERNING A.Y. 2012-13. ITA NO. 116/AHD/18 [RIDDHI STEEL & TUBE LTD. VS. DCIT] A.Y. 2012-13 - 2 - 2. AS PER THE CAPTIONED APPEAL, THE ASSESSEE HAS CH ALLENGED THE IMPOSITION OF PENALTY OF RS.35,690/- ON ACCOUNT OF ROC EXPENSES OF RS.1,10,000/-. 3. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEAR NED AR FOR THE ASSESSEE POINTED OUT THAT THE DISALLOWANCE OF RS.1, 10,000/- WAS MADE TOWARDS EXPENSES INCURRED TO INCREASE THE SHARE CAP ITAL ON THE GROUND THAT SUCH EXPENDITURE OF RAISING ADDITIONAL SHARE C APITAL IS A CAPITAL EXPENDITURE HAVING REGARD TO THE DECISION OF HONBL E SUPREME COURT IN BROOKE BOND INDIA LTD. V. CIT [1997] 91 TAXMAN 26 ( SC). THE LEARNED AR SUBMITTED THAT THE DEBATE BEING EXPENDIT URE TO BE REVENUE IN CHARACTER OR OF CAPITAL EXPENDITURE, NO PENALTY IS IMPOSABLE. 4. THE LEARNED DR, ON THE OTHER HAND RELIED UPON TH E ORDERS OF THE LOWER AUTHORITIES. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS ON IMPOSITION OF PENALTY UNDER S.271(1)(C) OF THE ACT TOWARDS ROC FEES PAID FOR INCREASING AUTHORIZED CAPITAL IN CONTROVER SY. THE ASSESSEE HAS DEBITED FEE PAID TO REGISTRAR OF COMPANIES FOR INCREASING THE AUTHORIZED CAPITAL AND CLAIMED THE SAME AS REVENUE EXPENDITURE. THE REVENUE AUTHORITIES, ON THE OTHER HAND, HAVE DISALL OWED THE EXPENDITURE ON THE GROUND THAT SUCH INCREASE IN AUT HORIZED CAPITAL WILL RESULT IN ADVANTAGE OF ENDURING NATURE AND IS CAPIT AL EXPENDITURE. THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT WAS INVO KED FOR SUCH DISALLOWANCE. WE STRAIGHTWAY NOTICE THAT NO FALSIT Y HAS BEEN FOUND IN THE PARTICULARS OF EXPENDITURE CLAIMED PER SE . IT IS TRITE THAT MERELY BECAUSE ASSESSEE HAS CLAIMED EXPENDITURE WHICH CLAI M WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF, WOULD NOT ATTRACT PENALTY UNDER S. 271(1)(C) OF THE ACT. DISALLOWANCE OF EXPENSES PER SE CANNOT MEAN THAT ASSESSEE HAS FURNISHED INACCURATE ITA NO. 116/AHD/18 [RIDDHI STEEL & TUBE LTD. VS. DCIT] A.Y. 2012-13 - 3 - PARTICULARS OF HIS INCOME. REFERENCE CAN BE MADE T O THE DECISION OF HONBLE SUPREME COURT IN CIT VS RELIANCE PETROPRODUCTS PVT. LTD. (2010) 322 ITR 158 (SC) FOR THIS PURPOSE. WE THUS SEE MERIT IN THE PLEA OF THE ASSESSEE FOR DELETION OF PENALTY IMPOSE D. THE ORDER OF THE CIT(A) IS ACCORDINGLY SET ASIDE AND THE AO IS DIREC TED TO DELETE THE PENALTY ON THIS SCORE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . SD/- SD/- (PRADIP KUMAR KEDIA) (KUL BHARAT) ACCOUNTANT MEMBER JUD ICIAL MEMBER AHMEDABAD: DATED 19/09/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 19/09/2 019