The ITO, Ward-4(4), Ahmedabad V. The Madhu Industries Ltd, Ahmedabad

ITA 1342/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60508 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 28-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUNIL H TALATI
• Keywords: Depreciation; Additional depreciation

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , .. , '# ' $ BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ./ I.T.A. NO.1342/AHD/2010 ( & ' & ' & ' & ' / / / / ASSESSMENT YEAR :2004-05) ITO WARD-4(4) AHMEDABAD & & & & / VS. MADHU INDUSTRIES LTD. 39, PHASE-I GIDC ESTATE VATVA AHMEDABAD ( '# ./)* ./ PAN/GIR NO. : AAABM 0027 D ( (+ / // / APPELLANT ) .. ( ,-(+/ RESPONDENT ) (+ . '/ APPELLANT BY : SHRI SAMIR TEKRIWAL, SR.D.R. ,-(+ / . ' / RESPONDENT BY : SHRI SUNIL H.TALATI &0 / #/ // / DATE OF HEARING : 11/6/12 12' / # / DATE OF PRONOUNCEMENT : 15/6/12 '3/ O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE ARISING FR OM THE ORDER OF LEARNED CIT(APPEALS)-VIII AHMEDABAD DATED 19.02.201 0 PASSED FOR A.Y. 2004-05 AND THE ONLY GRIEVANCE IS IN RESPECT OF DELETION OF PENALTY LEVIED U/S.271(1)(C) OF THE I.T.ACT OF RS.9,93,571/ -. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) OF THE I.T. ACT, 1961 DATED 22.1 2.2006 AND THE PENALTY ORDER PASSED U/S.271(1)(C) DATED 25/03/2009 WERE TH AT A DISALLOWANCE OF CLAIM OF DEDUCTION U/S.80IA OF RS.22,37,737/- WAS M ADE. AN ANOTHER DISALLOWANCE IN RESPECT OF ADDITIONAL DEPRECIATION U/S.32(1)(IIA) OF RS.5,3,797/- HAS ALSO BEEN MADE. PENALTY HAS BEEN LEVIED IN RESPECT OF ITA NO. 1342/AHD/2010 ITO VS. MADHU INDUSTRIES LTD. ASST.YEAR 2004-05 - 2 - THESE TWO DISALLOWANCES. AGAINST THE LEVY OF PENAL TY, AN APPEAL WAS PREFERRED BEFORE LD.CIT(A), WHO HAS DELETED THE PEN ALTY IN THE FOLLOWING MANNER; RELEVANT PARAGRAPH IS REPRODUCED BELOW:- 5. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE A PPELLANT IS A LTD.COMPANY ENGAGED IN MANUFACTURING OF BED SHEETS AND LINEN ETC. THE APPELLANT FILED ITS RETURN OF INCOME FOR THE RELEVANT PERIOD DECLARING TOTAL INCOME AT RS.74,59,124/- AFTER CLA IMING DEDUCTION U/S.80HHC AND 80IA OF THE ACT. THE ASSESSMENT IN T HIS CASE WAS COMPLETED U/S.143(3) OF THE ACT WHEREIN THE ASSESSI NG OFFICER INTER ALIA DISALLOWED THE APPELLANTS CLAIM FOR DEDUCTION S U/S.80HHC, 80IA AND THE CLAIM FOR ADDITIONAL DEPRECIATION. TH E ASSESSING OFFICER ALSO INITIATED THE PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT FOR DISALLOWANCE OF DEDUCTION U/S.80IA AT RS.22 ,37,737/- AND THE DISALLOWANCE OF ADDITIONAL DEPRECIATION AT RS.5 ,31,799/-. .. .. 5.7. AS REGARDS THE DISALLOWANCE OF CLAIM OF ADDI TIONAL DEPRECIATION OF RS.5,39,799/- THE ASSESSING OFFICER HELD THAT THOUGH THE APPELLANTS INSTALLED CAPACITY FOR PRODU CTION OF BED SHEET INCREASED FROM 1560000 BED SHEET IN A.Y. 2003 -04 TO 2000000 BED SHEETS DURING THE RELEVANT PERIOD YET I TS CAPACITY IN TOWEL DIVISION DID NOT INCREASE. HE FURTHER OBSERV ED THAT THE CAS CERTIFICATE FOR SUCH CLAIM IN FORM NO.3AA WAS FILED ONLY DURING THE ASSESSMENT PROCEEDINGS. .. .. 5.16. THEREFORE, IN VIEW OF THE ABOVE THE PENALTY L EVIED BY THE AO IN RESPECT OF THE DISALLOWANCE OF DEDUCTION UNDER S ECTION 80IA AND ENHANCED CLAIM FOR DEPRECIATION CANNOT BE SUSTAINED . IT MAY BE POINTED OUT THAT PENALTY U/S.271(1)(C) IN RESPECT O F DISALLOWANCES OR CLAIM FOR DEDUCTION U/S.80IA WAS DELETED IN A.Y. 2003-04 AFTER ANALYZING THE LEGAL POSITION IN THIS REGARD. IN VI EW OF THIS, THE PENALTY AMOUNTING TO RS.9,93,571/- IS HEREBY DELETE D. 3. WITH THIS BACKGROUND, WE HAVE HEARD BOTH THE SID ES. BEFORE US, AN ORDER OF THE ITAT D BENCH AHMEDABAD IN ASSESSEES OWN CASE, I.E. MADHU INDUSTRIES LTD. VS. ITO BEARING ITA NO.4172/A HD/2007, A.Y. ITA NO. 1342/AHD/2010 ITO VS. MADHU INDUSTRIES LTD. ASST.YEAR 2004-05 - 3 - 2004-05, DATED 23/07/2010 HAS BEEN PLACED, WHEREIN THE ONLY GROUND RAISED BEFORE THE TRIBUNAL WAS IN RESPECT OF A DISA LLOWANCE OF ADDITIONAL DEPRECIATION AND AFTER DETAILED DISCUSSION AND FOLL OWING THE DECISION OF HON'BLE KERALA HIGH COURT IN THE CASE OF CIT VS. H INDUSTAN NEWSPRINT LTD. (2009) 227 CTR 571 (KER.), THE CLAIM FOR ADDI TIONAL DEPRECIATION WAS ALLOWED. SINCE IN QUANTUM APPEAL A RELIEF HAS ALREADY BEEN GRANTED, THEREFORE CONSEQUENT THEREUPON THE CONCEALMENT PENA LTY IN THIS REGARD SHALL NOT SURVIVE ANY MORE. WE THEREFORE CONFIRM T HE DELETION AS PRONOUNCED BY LD.CIT(A). IN RESPECT OF CLAIM OF DE DUCTION U/S.80IA IN A.Y. 2003-04 IN ASSESSEES OWN CASE (WHEREIN THE RE VENUE WAS IN APPEAL), I.E. ITO VS. M/S.MADHU INDUSTRIES LTD. BEA RING ITA NO.1733/AHD/2009 IN A.Y. 2003-04, ORDER DATED 28/02 /2011, THE ITAT B BENCH AHMEDABAD HAS CONFIRMED THE DELETION OF P ENALTY FOLLOWING THE DECISION OF HON'BLE SUPREME COURT IN THE CASE O F CIT VS. RELIANCE PETROPRODUCTS (P) LTD. (2010) 322 ITR 158 (SC). D UE TO THIS REASON, AS WELL, WE HEREBY CONFIRM THE VIEW TAKEN BY THE LEARN ED CIT(APPEALS) IN RESPECT OF DELETION OF THE CONCEALMENT PENALTY. RE SULTANTLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. SD/- SD/- ( .. ) ( ) '# ( T.R. MEENA ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL ME MBER AHMEDABAD; DATED 15 / 6 /2012 ..&, .&../ T.C. NAIR, SR. PS ITA NO. 1342/AHD/2010 ITO VS. MADHU INDUSTRIES LTD. ASST.YEAR 2004-05 - 4 - '3 / ,4 5'4' '3 / ,4 5'4' '3 / ,4 5'4' '3 / ,4 5'4'/ COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. 6 / CONCERNED CIT 4. 6() / THE CIT(A)-VIII, AHMEDABAD 5. 49: ,& , , / DR, ITAT, AHMEDABAD 6. :; <0 / GUARD FILE. '3& '3& '3& '3& / BY ORDER, -4 , //TRUE COPY// = == =/ // / ) ) ) ) ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION 13.6.12 (DICTATION-PAD PAGES 5 ATTACHED) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 14.6.12 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S15.6.12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 15.6.12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER