Novus GBS Private Limited (Formerly known as Sheela Technologies Pvt.Ltd), Hyderabad, Hyderabad V. ITO, Ward-3(1), Hyderabad, Hyderabad

ITA 132/HYD/2015

• Counselvise Citation: 13222514 RSA 2015
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 06-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: K C DEVADAS
• Keywords: Deemed to accrue or arise in india

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI P.M.JAGTAP, ACCOUNTANT MEMBER ITA NO.132/HYD/2015 : ASSESSMENT YEAR 2010 - 11 M/S. NOVUS GBS PRIVATE LIMITED (FORMERLY KNOWN AS SHEELA TECHNOLOGIES PVT. LTD. ) HYDERABAD (PAN AAKCS 5244 H ) V/S. INCOME TAX OFFICER, WARD 3(1), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.C.DEVADAS RESPONDENT BY : SHRI RAJAT MITRA DR DATE OF HEARING 28.4.2015 DATE OF PRONOUNCEMENT 01.05.2015 O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2010 - 11 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) IV, HYDERABAD. 2. GROUN D S OF THE ASSESSEE ARE AS UN D ER - 1. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT WHERE DEEMED INCOME UNDER SECTION115JB FORMS THE BASIS OF ASSESSMENT BEING HIGHER THAN THE INCOME DETERMINED UNDER THE NORMAL PROVISIONS, THE INCOME SO ASSESSED UNDER MAT CANNOT CONSTITUTE CONCEALMENT AND WOULD LEAD TO EVASION OF TAX FOR IMPOSING PENALTY EITHE R FOR CONCEALMENT OF FOR FURNISHING INACCURATE PARTICULARS OF INCOME AS DECIDED IN A PLETHORA OF CASES. THE PENALTY IS THEREFORE LIABLE TO BE DELETED. 2. THE LEARNED CIT SHOULD HAVE APPRECIATED THAT THE PREPONDERANCE OF JUDICIAL OPINION ON THE ISSUE I TA NO. 132/H YD/20 15 M/S. NOVUS GBS PRIVATE LIMITED (FORMERLY KNOWN AS SHEELA TECHNOLOGIES PVT. LTD. ) HYDERABAD 2 SUPP ORTS THE CASE OF THE APPELLANT AND THEREFORE, PRINCIPLES ENUNCIATED IN THESE CASES SUPPORTING THE CASE OF THE APPELLANT SHOULD HAVE BEEN ADOPTED IN PREFERENCE OVER A SINGLE CASE. THE LEARNED CIT(A) OUGHT TO HAVE DISTINGUISHED THE CASES CITED BY THE APPELLA NT BEFORE APPLYING THE DECISION IN THE CASE OF SRI GOKULAM INDIA P. LTD. DT.19.07.2014(MADRAS). 3. WITHOU T PREJ UDICE TO THE ABOVE PROPOSITION THAT NO PEN A LTY IS IMPOSABLE ON THE DE E M E D INCOME C OMPU T ED UN D ER SE CT ION 115J B , I T IS S UBMI T TED T HAT T H E INCORRE CT COMPUTATION O F P R OFIT UN D ER SE CT ION 115J B AROSE OUT O F BONA FI D E INADVERTENCE ON TH E P A RT OF THE AC C OUN T ANT BUT NO T OUT OF ANY CONTUMACIOUS/ - DELIBE R ATE CONDUCT ON THE P A RT OF THE APP EL LANT SO AS TO ATTRACT P E NALTY ARISIN G OUT O F COM P U T ATIONAL ERRO R WH E N ALL THE FACTS WERE DISCLOSED B E FORE THE DEPARTMENT IN CL U D IN G TH E AU D IT REPORT. THAT A COMP UT ATIONAL ERROR, WHEN ALL THE D ETAILS ARE FURNI S H E D/AVAILABLE, IS NO T LIABL E TO PENALTY IS WELL SETTLED. 3. THE LEARNED COUN S EL FOR THE ASSESSEE SUBMITTED THAT THE ONLY ISSUE INVOLVED IN THIS APP E AL REL A TES TO VALIDITY O F THE PENALTY IMPOSED UN D ER S.271(1)(C) OF THE AC T. HE SUBMITTED THAT IT WAS A MISTAKE ON THE P A RT O F THE ASSESSEE TO CLAIM DEDUCTION UN D ER S.10A WHILE COMPU T IN G THE BOOK PROFIT UN D ER THE P R O VI S ION S OF S.115JB OF THE ACT . HE SUBMITTED THAT THE INCOM E D ETERMIN E D UN DE R THE MAT PROVI S ION S COULD NO T CONSTITUTE CONCEALMENT OR FILIN G OF INACCURATE PAR T ICUL A RS OF INCOM E . HE SUBMI T TED T H A T ALL THE FACTS WERE DISCLOSE D B Y TH E ASSESSEE AT THE TIME OF ASS ESSMENT I TSELF. HE REFERRED TO THE RELEVANT PO R TION OF THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER UN D ER S.271(1)(C) OF THE AC T IN SUPPORT OF HIS PLEA THAT ALL THE FACTS ARE DISCLOSED BY TH E ASSESSEE AT THE TIME O F ASSESSMENT . HE RELIED ON THE DECI SION OF THE HON'BLE APEX COU R T IN THE CASE OF PRICE WATERHOUSE COOPERS PVT. LTD. V/S. CIT (348 ITR 306). I TA NO. 132/H YD/20 15 M/S. NOVUS GBS PRIVATE LIMITED (FORMERLY KNOWN AS SHEELA TECHNOLOGIES PVT. LTD. ) HYDERABAD 3 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS OPPOSED THE SUBMI S SION S O F THE LEARNED COUN S EL FOR THE ASSESSEE. H E SUBMI TTE D THAT IN FORM NO.29, THE CH A RTERED ACCOUNTANT OF TH E ASSESSEE HAS DETERMINED THE BOOK P R O F IT OF THE ASSESSEE. HE SUBMI T TED THAT IT IS WRONG TO SAY THAT THIS IS THE FIRST YE A R OF E - FILING OF RETURN BY TH E ASSESSEE AND IN FACT, THE E - FIL I N G OF RETU R N HAS STARTED FROM TH E ASSESSM ENT YEAR 2007 - 08 ONWARDS. HE REFERRED TO THE RELEVANT PORTIONS OF THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER AND THE APPELL A TE O R DER PASSED BY TH E CIT(A) IN SUPPORT OF TH E CASE OF THE RE VENUE. H E HAS R E LI E D ON THE OR D ERS OF THE ASSESSING OFFICER AND THE CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A). WE FIND THAT THE ASSESSEE HAS MADE A CLAIM UN D ER S.10A OF THE AC T FOR DE D U CT ION, WHILE COMPU T IN G THE BOOK PROFIT UN D ER THE SPECIAL PROVISIONS OF THE ACT. THE DE D U C TION UN D ER S .10A WAS NO T ALLOWABLE TO THE ASSESSEE AS PER THE P R OVIS I ONS O F TH E AC T, AND IT WAS DISALLOWED. HOW E VER, ALL THE M AT ERIAL FACTS RELEVANT FOR ASSESSMENT WERE DISCLOSED BY THE ASSESSEE AT THE TIM E O F F ILING OF THE R E TURN ITSELF. A PERUSAL OF TH E PENALTY ORDER SHOWS THAT I T W A S THE ASSESSEE, WHO HAS DI S CLO S ED ALL THE RELEVANT FIGURES BEFORE THE ASSESSING OFFICER AND HAS FILED THE CALCULATION OF BOOK PROFITS UN D ER S.115JB OF THE AC T, AFTER CLAIMING EX E MP TION UN D ER S.10A OF TH E AC T. IT IS CORR E CT THAT THE ASSESSEE CO M PANY HAS E - FILED THE RETURN OF INCOME FOR THE EARLIER YEAR ALSO, BU T THAT IS NOT DECISIVE OF THE ISSUE. THE CON D U C T OF THE ASSESSEE IS BONA FIDE AND IT IS NO T THE L A W THAT WHEREVER THERE IS A DISALLOWANCE OR REJECTION OF A CLAIM OR DE D U C TION, CLAIMED BY TH E ASSESSEE , IT SHALL LEAD TO L E VY OF P E N A LTY FOR CON C EALMEN T OF INCOME O R F I LIN G OF INACCURATE PARTICULARS OF INCOME. THE DECISION OF TH E HON'BLE AP E X COU R T IN TH E CA S E OF PRICE WATERHOUSE COOPERS PVT. LTD. V/S. CIT I TA NO. 132/H YD/20 15 M/S. NOVUS GBS PRIVATE LIMITED (FORMERLY KNOWN AS SHEELA TECHNOLOGIES PVT. LTD. ) HYDERABAD 4 (348 ITR 306) SUPPORTS THE CA S E OF THE ASSESSEE . IN T H IS CA S E BEFORE THE APEX COURT, IN TH E STATEMENT OF PARTICULARS FILED WITH THE RETURN OF INCOME, PROVISION TOWARDS GRATUITY WAS SHOWN AS NOT ALLOWA BLE, BU T DEDU CT ION WAS CLAIMED IN THE R E TURN OF INCOME. IT WAS HELD BY TH E HON'BLE AP E X COU R T THAT IT WAS POSSIBLE THAT EVEN TH E ASSESSEE COULD MAKE SILLY MISTAKE S , AND ALL TH A T HAD HAPPENED WAS THAT THROUGH A BONA FIDE AND INADVERTENT ERROR, THE ASSESSEE WHILE SUBMITTING ITS RETURN FAIL E D TO ADD THE P R OVIS I ON FOR GRATUITY TO ITS TOTAL INCOME, AND HELD THAT THE IMPOSITION OF PENALTY WAS NO T JUSTIFIED. IN THE FACTS OF TH E PRESENT CASE, WE ARE OF THE VIEW THAT ALL THE MATERIAL FACTS WERE DISCLOSED BY THE ASSESSEE AT THE TIME OF ASSESSMENT, AND THE CONDUCT OF THE ASSESSEE WAS BONA FI D E AND IN THE ABSENCE OF ANY M A TERIAL BROU G H T ON RECORD ON BEHALF O F TH E REVENUE TO SUG GE ST THAT THE ASSESSEES MISTAKE WAS NO T BON A FIDE OR IN AD VERTENT, WE HOL D THAT IT IS NO T A FIT CA S E FOR LEVY OF PENALTY ON THE ASSESSEE FOR CONCEALMENT OF INCOME OR FURNI S HIN G OF INACCURATE PARTICULARS OF INCOME. ACCOR D INGLY THE PENALTY LEVIED UN D ER S. 271(1)(C) OF THE AC T IS CANCELLED AND TH E GR O U N DS OF APP E AL O F TH E ASSESSEE ARE ALL OWED. 6 . IN TH E R E SULT, APPEAL O F TH E ASSESSEE IS ALLO W ED. ORDER PRONOUNCED IN THE COURT ON 1 ST MAY, 2015 SD/ - SD/ - ( P.M.JAGTAP ) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT D T/ - APRIL, 201 5 I TA NO. 132/H YD/20 15 M/S. NOVUS GBS PRIVATE LIMITED (FORMERLY KNOWN AS SHEELA TECHNOLOGIES PVT. LTD. ) HYDERABAD 5 COPY FORWARDED TO: 1. M/S. NOVUS GBS PRIVATE LIMITED (FORMERLY KNOWN AS SHEELA TECHNOLOGIES PVT. LTD.) PLOT NO.13, FLAT NO.3101, CYBER HEIGHTS COMPLEX, HUDA LAYOUT, ROAD NO.2, BANJARA HILLS, HYDERABAD, TELANGANA 500 033 2 . INCOME TAX OFFICER WARD 3(1), HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS) I V HYDERABAD 4. COMMISSIONER OF INCOME - TAX III HYDERABAD DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S