GODFREY PHILIPS INDIA LTD., MUMBAI V. DCIT 8(1), MUMBAI

ITA 1476/MUM/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55593 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 14-09-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 04-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH: MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.1476/MUM/2009 (ASSESSMENT YEAR: 2003-04) GODFREY PHILLIPS INDIA LTD., SAHARA ROAD, CHAKALA, ANDHERI (EAST), MUMBAI -400 099 ....... APPELLANT VS DCIT -8(1), AAYAKAR BHAVAN, MUMBAI ..... RESPONDENT PAN: AABCG 4768 K APPELLANT BY: SHRI YOGESH THAR RESPONDENT BY: SHRI A.K. NAYAK DATE OF HEARING: DATE OF PRONOUNCEMENT: 14.09.2011 28.09.2011 O R D E R PER R.S. PADVEKAR, JM: IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE IMPU GNED ORDER OF THE LD. CIT (A)-8 MUMBAI DATED 10.12.2008 FOR TH E A.Y. 2003-04 PARTLY CONFIRMING THE PENALTY LEVIED BY THE A.O. T HE ASSESSEE HAS TAKEN THE FOLLOWING EFFECTIVE GROUND:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN AW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) VIII, MUMBAI (THE CIT (A)) ERRED IN UPHOLDING THE ACTION OF THE DEPUTY COMMISSIONER OF INCOME TAX RANGE 8(1), MUMBAI (A.O.) IN LEVYING PENALTY U/S.271(1)(C) ON DISALLOWANCE OF INTEREST COST ON THE LOANS GIVEN TO ITS SUBSIDIARIES ITA 1476 /MUM/2009 GODFREY PHILLIPS INDIA LTD. 2 2. THE APPELLANT PRAYS THAT PENALTY LEVIED U/S.271( 1)(C) OF THE ACT BE DELETED.. 2. IN THIS CASE THE ORIGINAL ASSESSMENT OF THE ASSE SSEE WAS COMPLETED U/S.143(3) ON 20.1.2006 DETERMINING THE T OTAL INCOME AT ` 81,80,99,980/- AS AGAINST ` 77,87,52,790/- DECLARED BY THE ASSESSEE IN ITS RETURN. IN RESPECT OF FOLLOWING ADDITIONS, THE A.O. INITIATED THE PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT:- DETAILS AMT. IN ` (I) PRODUCT DEVELOPMENT EXPENSES 8,43,527 (II) DEPRECIATION ON UPS 2,45,908 (III) EDP CHARGES 6,49,600 (IV) INTEREST 38,98,000 (V) LEAVE ENCASHMENT 20,00,000 3. THE A.O. LEVIED THE PENALTY OF ` 28,02,347/- WHICH WAS EQUIVALENT TO 100% OF TAX ALLEGED TO BE EVADED. TH E ASSESSEE CHALLENGED THE PENALTY ORDER BEFORE THE LD. CIT (A) . 4. THE LD. CIT (A) SUSTAINED THE PENALTY ONLY TO TH E EXTENT OF ADDITION MADE BY THE DISALLOWANCE OF THE INTEREST O F ` 38,98.000/- AND DELETED PENALTY ON THE OTHER ADDITIONS. 5. THE LD. COUNSEL SUBMITS THAT SO FAR AS ADDITION OF INTEREST DISALLOWANCE IS CONCERNED, IN THE QUANTUM APPEAL TH E SAID ISSUE HAS BEEN RESTORED TO THE FILE OF THE A.O. FOR PASSING A FRESH ORDER AFTER NECESSARY EXAMINATION IN THE LIGHT OF THE OBSERVATI ONS OF THE TRIBUNAL. HE, THEREFORE, PLEADED FOR CANCELING THE PENALTY. ITA 1476 /MUM/2009 GODFREY PHILLIPS INDIA LTD. 3 6. WE HAVE ALSO HEARD THE LD. D.R. THE ONLY GROUN DS TAKEN BY THE ASSESSEE ARE IN RESPECT OF PENALTY ON THE INTER EST DISALLOWANCE. AS PER COPY OF THE TRIBUNAL ORDER IN THE ASSESSEES OW N CASE FOR THE A.Y. 2003-04 (ITA NO.1071/M/2007) AND OTHER APPEALS DATE D 20.04.2011, THE TRIBUNAL HAS RESTORED THE ISSUE OF DISALLOWANCE OF THE INTEREST TO THE FILE OF THE A.O. FOR FRESH DETERMINATION OF SAI D ISSUE. AS QUANTUM ADDITION ITSELF IS RESTORED TO THE FILE OF THE A.O. , THE PENALTY DOES NOT SURVIVE. WE, THEREFORE, CANCEL THE PENALTY LEVIED BY THE A.O. ON THE ADDITION BY DISALLOWANCE OF THE INTEREST WITH A LIB ERTY TO THE A.O. TO INITIATE SAME IF NECESSARY AS PER PROVISIONS OF LAW . 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 8TH SEPTEMBER 2011. SD/- SD/- ( P.M. JAGTAP ) ACCOUNTANT MEMBER ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATED : 28TH SEPTEMBER 2011 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) -VIII, MUMBAI. 4) THE CIT- VIII, MUMBAI. 5) THE D.R. G BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN ITA 1476 /MUM/2009 GODFREY PHILLIPS INDIA LTD. 4 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 16.09.2011 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 20.09.2011 SR.PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER