M/s. Ashoka Buildcon Ltd., Nashik V. Assistant Commissioner of Income-tax,

ITA 1599/PUN/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1634 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 07-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VIJAYA B REDDY
• Keywords: Depreciation; Rectification of order; Unabsorbed depreciation

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , ! , # $ BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1599/PN/2015 #& & / ASSESSMENT YEAR : 2005-06 M/S. ASHOKA BUILDCON LTD., ASHOKA HOUSE, ASHOKA MARG, WADALA, NASHIK 422 011 PAN NO.AABCA9292J . / APPELLANT V/S ACIT, CENTRAL CIRCLE - 1, NASHIK . / RESPONDENT / APPELLANT BY : WRITTEN SUBMISSION / RESPONDENT BY : SHRI T. VIJAYA B. REDDY / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 21-10-2015 OF THE CIT(A)-12, PUNE RELATING TO ASSE SSMENT YEAR 2005-06. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE AT THE TIME OF HEARING. HOWEVER, WRITTEN SUBMISSION WAS FILED WITH A REQUES T TO CONSIDER THE SAME. THEREFORE, THE APPEAL IS BEING DECIDED ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE AND CONSIDERING THE WRITTEN SUBMISSIONS FILED. / DATE OF HEARING :15.06.2016 / DATE OF PRONOUNCEMENT:30.06.2016 2 ITA NO.1599/PN/2015 3. THE ASSESSEE IN ITS ONLY GROUND OF APPEAL HAS CHALLENG ED THE ORDER OF THE CIT(A) IN CONFIRMING THE PENALTY OF RS.56,364/-LEVIED BY THE AO U/S.271(1)(C) OF THE I.T. ACT. 4. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A LIMITED COMPANY ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION, TR ADING IN CONSTRUCTION MATERIAL, DEVELOPING AND MAINTAINING INFRASTRUCTU RE FACILITY AND HIRING OF MACHINERY EQUIPMENTS, VEHICLES AND ASSET S. IT FILED ITS RETURN OF INCOME ON 31-10-2005 DECLARING TOTAL INCO ME OF RS.1,30,96,330/- AND PROFIT U/S.115JB AT RS.10,64,09,601/-. THE AO COMPLETED THE ASSESSMENT U/S.143(3) ON 28-12-2007 DETERMINING THE TOTAL INCOME AT RS.6,05,87,196/-. THE CONCE ALED INCOME WERE ON ACCOUNT OF DEPRECIATION CLAIMED OF RS.9,37,42,685/- ON RIGHT TO COLLECT TOLL, SET OFF OF BROUGHT F ORWARD UNABSORBED DEPRECIATION DISALLOWED, DISALLOWANCE OF VEHICLE HIRIN G CHARGES AND INTEREST ON INCOME-TAX REFUNDS IN COMPUTING DEDUCTION U/S.80IA(4). THE AO THEREAFTER INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT AND LEVIED PENALTY OF RS.2,53,48,240/- O N 29-03-2014. SUBSEQUENTLY, THE SAID ORDER WAS RECTIFIED U /S.254 OF THE I.T. ACT ON 31-30-2015 REVISING SUCH PENALTY AT RS.56,364/-. 5. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) W HO UPHELD THE PENALTY OF RS.56,364/- BY OBSERVING AS UNDER : FINDINGS : 3.4 I HAVE CAREFULLY CONSIDERED THE APPELLANT'S EXPL ANATION. I AM OF THE VIEW THAT THE LEARNED AO HAS RIGHTLY LEVIED THE PENALTY U/S 271 (1)(C) ON THE APPELLANT. THE REASONS FOR MY CONCLUSION ARE AS UNDER: (I) THE APPELLANT CONTENTION THAT CONSTRUCTION RELAT ED VEHICLE HIRE WERE EARNED FOR OTHERWISE IDLE PERIOD OF THE V EHICLES FOR THEIR EFFECTIVE UTILIZATION RESULTING TO DIRECT LINK BETWEEN THE ANKALI PROJECT, IS NOT CONVINCING. 3 ITA NO.1599/PN/2015 (II) THE AO HAS RIGHTLY CONCLUDED THAT FOR CLAIMING DEDUCTION U/S 80IA(4) INCOME SHOULD BE DERIVED FROM THE BUSINESS O F THE APPELLANT I.E. ANKALI INFRASTRUCTURE PROJECT AND THA T HIRING OF CONSTRUCTION RELATED VEHICLE IS NOT THE BUSINESS OF THE APPELLANT. (III) THE AO FURTHER ALSO RIGHTLY CONCLUDED THAT IN TEREST INCOME RECEIVED FROM THE INCOME TAX REFUND IS ALSO NO T DERIVED FROM THE ASSESSEE'S BUSINESS, HENCE NOT ELIGIBLE FOR DEDUCT ION U/S 80IA(4). (IV) APPELLANT BEING A HUGE INFRASTRUCTURE DEVELOPM ENT COMPANY AND ASSISTED BY ABLE ACCOUNTS AND AUDIT STAFF AN D ALSO ASSISTED BY CONSULTANTS. EXCESSIVE CLAIM OF DEDUCTION U/S 80IA(4) ON ACCOUNT OF INCOME WHICH HAD NO NEXUS WITH THE ELIGIBLE INCOME DERIVED FROM INFRASTRUCTURE DEVELOPM ENT, AMOUNTS TO FILING OF INACCURATE PARTICULARS OF INCOME . THE ISSUES ARE NOT EVEN DEBATABLE AND IT IS NOT A- CASE WHERE CL AIM MADE BY THE APPELLANT WAS NOT ACCEPTED AND THERE WERE TWO LEGALLY PLAUSIBLE VIEWS ABOUT IT. 3.5 IN VIEW OF THE ABOVE FACTS, I AGREE WITH THE LE ARNED AO THAT ONCE IT IS ESTABLISHED THAT THE RETURN FILED IS NOT ACCURATE THEN THE ASSESSEE IS LIABLE TO LEVY OF PENALTY U/S 271 (1)(C). HENCE, I C ONFIRM THE PENALTY LEVIED BY THE LEARNED AO OF RS 56,364 U/S 271(1)(C). HOWEVER, IN VIEW OF PENALTY SCALED DOWN BY THE AO VIDE RECTIFICATION ORDER DATED 31.03.2015, THE APPELLANT HAS ALREADY GOT RELIEF RS.2 ,52,91,846/-. THESE GROUNDS ARE PARTLY ALLOWED. 6. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 7. THE ASSESSEE IN ITS WRITTEN SUBMISSION HAS STATED AS UNDER : 6. IN THE CASE OF ITO V/S M/S HIRANANDANI BUILDERS (IT AT MUMBAI 'H' BENCH) IN ITA NO. 4613/MUM/2013, DECIDED ON 28.10.2015 (COPY ENCLOSED -PAGE NOS.44-56), IT IS HELD THAT, INTEREST ON INCOME TAX REFUND, TENDER FEES, ETC ARE E LIGIBLE FOR DEDUCTION U/S 80IA(1). PROVISIONS OF SEC. 80IA(4) ARE A LSO SIMILAR IN NATURE. THUS, APPELLANT'S CLAIM REGARDING DEDUCTIO N U/S 80IA ON INTEREST ON I.T. REFUND AND VEHICLE HIRE CHARGES CANN OT BE SAID TO BE WITHOUT BASIS. THUS, THE CLAIM OF APPELLANT WAS GEN UINE AND DISALLOWANCE OF SUCH GENUINE CLAIM CANNOT BE VISITED W ITH PENALTY U/S 271(1)(C). FOR THIS PROPOSITION APPELLANT WOULD LI KE TO BRING FOLLOWING OBSERVATIONS OF THE SUPREME COURT AT PARA 1 0 OF THE DECISION IN THE CASE OF CIT V/S RELIANCE PETROPRODUCTS (P) LTD (SUPRA) TO THE NOTICE OF THE HON'BLE BENCH - 'MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE , WHICH CLAIM WAS NOT ACCEPTED OR ACCEPTABLE TO THE RE VENUE, THAT BY ITSELF WOULD NOT, IN OUR OPINION, ATTRACT TH E PENALTY U/S 271 (L)(C).' 4 ITA NO.1599/PN/2015 RELIANCE IS ALSO PLACED ON THE DECISION OF THE BOMBAY HIGH COURT DECISION IN THE CASE OF CIT V/S M/S ADITYA BIRLA NUVO L TD. (SUPRA). 8. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HA ND HEAVILY RELIED ON THE ORDER OF THE CIT(A). 9. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE A ND PERUSED THE MATERIAL AVAILABLE ON RECORD AND THE WRITTEN SUBMISSION FILED BY THE ASSESSEE. ON PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW WE FIND THE PENALTY THAT HAS BEEN SUSTA INED AFTER THE RECTIFICATION ORDER PASSED U/S.154 IS ON ACCOUNT OF DIS ALLOWANCE ON VEHICLE HIRE CHARGES AND DISALLOWANCE OF INTEREST ON INCO ME-TAX RETURNS WHILE COMPUTING DEDUCTION U/S.80IA(4). WE FIND THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. M/S. HIRANANDINI BUILDERS AND VICE-VERSA VIDE ITA NO.4613/MUM/20 13 AND CO NO.188/MUM/2014 ORDER DATED 28-10-2015 FOR A.Y.2 009- 10 HAS HELD THAT INTEREST RECEIVED ON TDS REFUND SHOULD BE NETTED AGAINST THE INTEREST EXPENDITURE FOR THE PURPOSE OF COMP UTING THE PROFITS AND GAINS DERIVED FROM THE UNDERTAKING IN WHICH CAS E THE INTEREST INCOME NEED NOT BE ASSESSED SEPARATELY AND IT WOULD AUTOMATICALLY GET DEDUCTION U/S.80IA(4) DUE TO NETTING OF. FURTHER ALL RELEVANT MATERIAL FACTS WERE ALSO DISCLOSED IN THE RETURN ITSELF. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT-III, VS . ADITYA BIRLA NUVO LIMITED REPORTED IN (2012) 82 CCH 206 VIDE ITA NO.3899/2010 ORDER DATED 14-08-2012 HAS HELD THAT TO ATTRACT THE PROVISIONS OF SECTION 271(1)(C) THE ASSESSEE MUST BE HELD TO HAVE CONCEALED THE MATERIAL PARTICULARS OR TO HAVE FURNISHED INA CCURATE PARTICULARS. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. REPORTED IN 322 ITR 15 8 HAS HELD THAT A MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LA W, BY 5 ITA NO.1599/PN/2015 ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS . SINCE IN THE INSTANT CASE ALL MATERIAL FACTS WERE ALREADY THERE IN THE RETURN OF INCOME FILED, THEREFORE, WE ARE OF THE CONSIDERED O PINION THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY U/S.271(1)(C) OF T HE I.T. ACT. WE THEREFORE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE AO TO CANCEL THE PENALTY LEVIED U/S.271(1)(C) OF THE I.T. ACT . THE GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30-06-2016. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE ; DATED : 30 TH JUNE, 2016. ) *#,! -! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT (A) - 1 2, PUNE 4. 5. 6. THE CIT-12, PUNE $ ''(, (, / DR, ITAT, B PUNE; - / GUARD FILE. / BY ORDER , // TRUE COPY // // $ ' //TRUE /0 ' ( / SR. PRIVATE SECRETARY (, / ITAT, PUNE