Associated Power Structure Pvt.Ltd., Baroda V. The ACIT.,Cent.Circle-2, Baroda

ITA 1402/AHD/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4407 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 21-11-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 03-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS SRDR
• Keywords: Depreciation

Judgement Text

, , , , , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BENCH, AHMEDABAD .., ! '# '# '# '# $ %&, ! BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER #./ I.T.A. NO.1402/AHD/2010 ( ( ')( ( ')( ( ')( ( ')( / / / / ASSESSMENT YEAR : 2004-05) ASSOCIATED POWER STRUCTURE PVT.LTD. 905-3, GIDC MAKARPURA BARODA / VS. THE ACIT CENTRAL CIRCLE-2 BARODA !* #./+, #./ PAN/GIR NO. :AABCA 6602 N ( *- / // / APPELLANT ) .. ( ./*- / RESPONDENT ) *- 0 / APPELLANT BY : SHRI MILIN MEHTA, A.R. ./*- 1 0 / RESPONDENT BY : SHRI K.C.MATHEWS, SR.DR $'2 1 & / / / / DATE OF HEARING : 21/11/2013 34) 1 & / DATE OF PRONOUNCEMENT : 28/11/2013 5 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-IV, (CIT(A) FOR SHORT) DATED 15/03/2010 PERTAINING TO ASSESSMENT YEAR (AY) 2004-05. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE ORDER OF LEARNED COMMISSIONER (APPEALS)-II IS B AD IN LAW AND ON FACTS. 2. THE LEARNED COMMISSIONER (APPEALS0 ERRED IN CONFIRM ING PENALTY U/S.271(1)(C) WITHOUT CONSIDERING THE FACT THAT ALL THE REQUIRED DETAILS WERE SUBMITTED AND THE CLAIM U/S.80IB WAS R IGHTLY MADE. ITA NO.1402/AHD /2010 ASSOCIATED POWER STRUCTURE PVT.LTD. VS. ACIT ASST.YEAR 2004-05 - 2 - 3. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE GROUND OF APPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE AS SESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 28/12/2006, THEREBY THE ASSESSING OFFICER(AO) DISALLOWED THE CLAIM OF THE ASSESSEE MADE U/S.80-IB OF THE ACT AMO UNTING TO RS.35,37,102/- AND DEPRECIATION ON ELECTRIC FITTIN G OF RS.2,23,563/-. THE PENALTY PROCEEDINGS WAS ALSO INITIATED. IN THE QUA NTUM PROCEEDINGS, THE LD.CIT(A) CONFIRMED THE DISALLOWANCE. SUBSEQUENTLY , THE AO LEVIED PENALTY ON THIS AMOUNT AMOUNTING TO RS.13,93,110/- . 3. THE LD.COUNSEL FOR THE ASSESSEE POINTED OUT THAT THOUGH IN THE QUANTUM PROCEEDINGS THE DISALLOWANCE HAS BEEN CONFI RMED BY THE LD.CIT(A) AND MATTER CARRIED UPTO THE STAGE OF HON BLE ITAT, HOWEVER IT IS SUBMITTED THAT THIS IS NOT A FIT CASE FOR LEVYIN G THE PENALTY. HE SUBMITTED THAT MERELY DISALLOWING THE CLAIM MADE U/ S.80-IB OF THE ACT WOULD NOT BE SUFFICIENT FOR INITIATION AND CONFIRMA TION OF PENALTY. HE PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT RENDERED IN THE CASE OF CIT VS . RELIANCE PETROPRODUCTS PVT.LTD. 322 ITR 158 (SC). HE SUBMITTED THAT THE CLAIM WAS MADE ON THE BASIS OF T HE CERTIFICATE ISSUED BY THE CHARTERED ACCOUNTANT. THEREFORE, THE PENALT Y CANNOT BE LEVIED ON THIS AMOUNT. HE RELIED ON THE DECISION OF HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF BTX CHEMICALS (P) LTD. VS. CIT REPORTED AT 288 ITR 196 (GUJ.). ITA NO.1402/AHD /2010 ASSOCIATED POWER STRUCTURE PVT.LTD. VS. ACIT ASST.YEAR 2004-05 - 3 - 3.1. ON THE CONTRARY, LD.SR.DR STRONGLY SUPPORTED T HE ORDERS OF THE AUTHORITIES BELOW. HE RELIED ON THE DECISION OF HO NBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF A.M.SHAH & CO. VS. CI T REPORTED AT 238 ITR 415. HE ALSO PLACED RELIANCE ON THE DECISION O F COORDINATE BENCH DATED 23/12/2011 RENDERED IN THE CASE OF CHADHA SU GARS P.LTD. VS. ACIT REPORTED AT 135 ITD 42 (DELHI ITAT). IT IS SUBMITT ED THAT THE ASSESSEES CLAIM WAS PURSUED UPTO THE LEVEL OF ITAT. HE SUBMI TTED THAT THE ASSESSEE WAS AWARE THAT ASSESSEE IS NOT ENTITLED FO R THE CLAIM IN VIEW OF THE DECISIONS OF THE HONBLE SUPREME COURT IN THE C ASE OF METTUR CHEMICAL & INDUSTRIAL CORPORATION LTD. (217 ITR 768 ) AND OF ORIENT PAPER MILLS LTD. (176 ITR 110). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE UNDISPUTED FACT REMAINS THAT THE PENALTY PROCEEDING S AND ASSESSMENT PROCEEDINGS ARE TWO DIFFERENT PROCEEDINGS. THE CONT ENTION OF THE LD.COUNSEL FOR THE ASSESSEE IS THAT ALL RELEVANT MA TERIAL FACTS WERE DULY DISCLOSED AND THERE WAS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME, THEREFORE THE PRO VISIONS OF SECTION 271(1)(C) CANNOT BE INVOKED IN THIS CASE. IT IS AL SO CONTENDED THAT MERELY DISALLOWANCE OF A CLAIM MADE ON THE BASIS OF ADVICE GIVEN BY THE CHARTERED ACCOUNTANT AND ALSO UNDER THE BONA FIDE B ELIEF, NO PENALTY CAN BE LEVIED. THE CONTENTION OF THE REVENUE IS THAT THE ASSESSEE HAS MADE THE CLAIM WITH AN INTENTION TO EVADE TAX. IT IS TH E SUBMISSION OF THE LD.SR.DR THAT THE ASSESSEE WAS IN THE KNOWLEDGE OF THE DECISIONS OF HONBLE SUPREME COURT IN THE CASE OF METTUR CHEMICA L & INDUSTRIAL ITA NO.1402/AHD /2010 ASSOCIATED POWER STRUCTURE PVT.LTD. VS. ACIT ASST.YEAR 2004-05 - 4 - CORPORATION LTD.(SUPRA) AND OF ORIENT PAPER MILLS L TD.(SUPRA) AND STILL ASSESSEE PURSUED ITS CLAIM UPTO THE STAGE OF HONBL E ITAT. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE RIVAL SUB MISSIONS. IT IS NOT A DISPUTED FACT THAT THE ASSESSEE HAS DISCLOSED ALL M ATERIAL INFORMATION IN RESPECT OF ITS CLAIM. THE HONBLE APEX COURT IN TH E CASE OF CIT VS . RELIANCE PETROPRODUCTS PVT.LTD. 322 ITR 158 (SC) HA S HELD AS UNDER:- A GLANCE AT THE PROVISIONS OF SECTION 271(1) OF TH E INCOME-TAX ACT, 1961, SUGGEST THAT IN ORDER TO BE COVERED BY I T, THERE HAS TO BE CONCEALMENT OF PARTICULARS OF THE INCOME OF THE ASS ESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURA TE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULAR S USED IN SECTION 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND T O BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY O F FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASS ESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISIO N, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAG INATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHI NG WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICU LARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INAC CURATE, THE LIABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DET AILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO F URNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISH ING INACCURATE PARTICULARS. DECISION OF THE GUJARAT HIGH COURT AF FIRMED. 4.1. THEREFORE, RESPECTFULLY FOLLOWING THE RATIO LA ID DOWN BY THE HONBLE APEX COURT IN THE CASE OF CIT VS . RELIANCE PETROPRODUCTS ITA NO.1402/AHD /2010 ASSOCIATED POWER STRUCTURE PVT.LTD. VS. ACIT ASST.YEAR 2004-05 - 5 - PVT.LTD.(SUPRA), WE HEREBY DELETE THE PENALTY AND A LLOW THE GROUND OF ASSESSEES APPEAL. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HER EINABOVE AT CAPTION PAGE SD/- SD/- ( .. ) ($ %&) ! ! ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 28/11/2013 8.., '.../ T.C. NAIR, SR. PS 5 1 .&9 :9)& 5 1 .&9 :9)& 5 1 .&9 :9)& 5 1 .&9 :9)&/ COPY OF THE ORDER FORWARDED TO : 1. *- / THE APPELLANT 2. ./*- / THE RESPONDENT. 3. ## & $; / CONCERNED CIT 4. $;() / THE CIT(A)-IV, AHMEDABAD 5. 9'%< .& , , / DR, ITAT, AHMEDABAD 6. <( =2 / GUARD FILE. 5$ 5$ 5$ 5$ / BY ORDER, /9& .& //TRUE COPY// > >> >/ // / #+ #+ #+ #+ ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 26.11.13(DICTATION-PAD 8-PAGE S ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 27.11.13 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 FAIR ORDER PLACED BEFORE OTHER MEMBER 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.28.11.13 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 28.11.13 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER