The DCIT, (OSD), Range-1, Ahmedabad V. M/s. Bio Tech Visioncare Pvt. Ltd., Ahmedabad

ITA 1602/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6272 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-03-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 21-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P M MEHTA
• Section: 143(3); 80IB

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.1602/AHD/2014 %& ' ()'/ ASSTT. YEAR: 2006-2007 DCIT (OSD) RANGE-1 AHMEDABAD. VS. BIOTECH VISIONCARE P.LTD. 401, SARTHAK COMPLEX OPP: RAJPATH CLUB S.G. HIGHWAY AHMEDABAD 380 015. PAN : AABCB 3639 E ( APPLICANT ) ( RESPONENT ) REVENUE BY : SHRI JAMES KURIAN, SR.DR ASSESSEE BY : SHRI P.M. MEHTA, AR / DATE OF HEARING : 27/03/2017 / DATE OF PRONOUNCEMENT: 07/04/2017 67/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST OR DER OF LD.CIT(A)-VI, AHMEDABAD DATED 31.3.2014 PASSED FOR THE ASSTT.YEAR 2006-07. 2. SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD.CIT (A) HAS ERRED IN DELETING THE PENALTY OF RS.63.16 LACS LEVIED BY THE AO UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA D FILED ITS RETURN OF INCOME ON 25.11.2006 DECLARING TOTAL INCOME AT RS.8 4,80,100/-. AN ASSESSMENT ORDER WAS FRAMED ON 31.12.2008 UNDER SEC TION 143(3) OF THE ITA NO.1602/AHD/2014 2 INCOME TAX ACT, 1961. THE LD.AO HAS MADE VARIOUS A DDITIONS, BUT FOR THE PURPOSE OF PRESENT APPEAL, WE ARE CONCERNED WITH TW O ADDITIONS, VIZ. (A) DISALLOWANCE OF DEDUCTION UNDER SECTION 80IB OF RS. 1,87,37,308/-, AND (B) LATE PAYMENT OF EMPLOYEES CONTRIBUTION TO PF FOR T HE MONTH OF NOVEMBER DISALLOWED AT RS.18,867/-. AS FAR AS FIRST AMOUNT OF DISALLOWANCE IS CONCERNED, THE LD.AO HAS OBSERVED THAT IN ORDER TO CLAIM DEDUCTION UNDER SECTION 80IB, THE ASSESSEE WAS REQUIRED TO FULFILL CONDITIONS OF SMALL SCALE INDUSTRIAL (SSI) UNDERTAKING WHEREIN INVESTMENT I N PLANT & MACHINERY SHOULD NOT EXCEED RS.5 CRORES AS ON THE DATE OF PRE VIOUS YEAR. IN THE OPINION OF THE AO, INVESTMENT IN PLANT & MACHINERY BY THE A SSESSEE WAS OF RS.13.70 CRORES, THEREFORE ACCORDING TO HIM, THE ASSESSEE DI D NOT FULFILL ESSENTIAL CONDITIONS AND NOT ELIGIBLE FOR DEDUCTION UNDER SEC TION 80IB OF THE ACT. WHEN THE DISPUTE TRAVELLED TO THE TRIBUNAL IN QUANT UM APPEAL, THEN, IT WAS HELD THAT THE AO HAS ERRONEOUSLY CLUBBED THE INVEST MENT OF TWO INDEPENDENT UNITS. THE TRIBUNAL HELD THAT THE AO OUGHT TO HAVE TAKEN INVESTMENT OF AN SSI UNIT INDEPENDENTLY, WHICH IS LESS THAN RS.5 CRO RES, AND THEREFORE, IT FULFILLS ESSENTIAL CONDITIONS. THE FINDING OF THE TRIBUNAL RECORDED IN PARA 17 AND 18 OF ITA NO.1021/AHD/2011 READS AS UNDER: 17. A CAREFUL READING OF THE AFOREMENTIONE D JUDICIAL DECISIONS WOULD SHOW THAT THE HON'BLE HIGH COURTS INCLUDING HON'BLE JURISDICTIONAL HIGH COURT AND ALSO THE CO-ORDINATE BENCH HAVE HELD THAT FOR THE DETERMINATION OF THE ELIGIBILITY OF SSI UNIT, SEPARATE UNITS HAVE TO BE CONSIDERED SEPARATELY. 18. AS MENTIONED ELSEWHERE, THE VALUE OF IN VESTMENT IN THE ELIGIBLE UNIT OF THE ASSESSEE WHICH IS ENGAGED IN THE MANUFA CTURE OF INTRA OCULAR LENSES IS LESS THAN RS. 5 CRORES, THEREFORE, IN OUR CONSIDERED OPINION; THIS UNIT OF THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S. 80IB OF THE ACT. WE, ACCORDINGLY, SET ASIDE THE FINDINGS OF THE ID. CIT( A) AND DIRECT THE A.O. TO ALLOW THE DEDUCTION CLAIMED U/S. 80IB OF THE ACT. G ROUND NO. 1 IS ACCORDINGLY ALLOWED. ITA NO.1602/AHD/2014 3 4. THE AO HAS COMPUTED THE PENALTY ON DISALLOWANCE OF DEDUCTION UNDER SECTION 80IB. ON APPEAL, THE LD.CIT(A) HAS DELETED THE PENALTY. 5. WITH THE ASSISTANCE OF THE LD.REPRESNETATIVES, W E HAVE GONE THROUGHT HE RECORD. WE FIND THAT S UB-CLAUSE (III) OF SECTION 271(1)(C) PROVIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEM PLATES THAT THE ASSESSEE WOULD BE DIRECTED TO PAY A SUM IN ADDITION TO TAXES, IF ANY, PAYABLE HIM, WHICH SHALL NOT BE LESS THAN , BUT WHI CH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED B Y REASON OF CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, THE QUANTIFICATION OF THE PENALTY IS DEPENDED UPON THE ADDITION MADE TO THE INCOME OF THE ASSESSE E. SINCE BASIS FOR VISITING THE ASSESSEE WITH PENALTY HAS BEEN EXTINGU ISHED BY DELETING THE ADDITION BY THE ITAT IN QUANTUM APPEAL IN ITA NO.10 21/AHD/2011 DATED 12.8.2016, THEREFORE, THERE WOULD NOT ANY PENALTY O N THE DISALLOWANCE OF RS.1,87,37,308/-. 6. AS FAR AS THE NEXT ADDITION IS CONCERNED THE ASS ESSEE HAS CLAIMED DEDUCTION OF EMPLOYEES CONTRIBUTION MADE TO PROVIDE NT FUND. THIS CLAIM OF THE ASSESSEE WAS DISALLOWED ON THE GROUND THAT IT W AS PAID BY THE ASSESSEE AFTER EXPIRY OF LIMITATION PROVIDED IN RESPECTIVE P ROVIDENT FUND ACT. THE ADDITION WAS CONFIRMED UPTO THE LEVEL OF THE TRIBUN AL. WE FIND THAT THE TRIBUNAL HAS CONFIRMED THIS ADDITION BY FOLLOWING T HE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. GU JARAT STATE ROAD TRANSPORT CORPORATION, 366 ITR 170. THE LD.COUNEL FOR THE ASS ESSEE CONTENDED THAT THOUGH THE HONBLE HIGH COURT HAS DECIDED THE ISSUE AGAINST THE ASSESSEE ON THIS POINT AND THE TRIBUNAL HAS FOLLOWED THE HONBL E GUJARAT HIGH COURT DECISION, BUT A CONTRARY VIEW WAS TAKEN BY HONBLE KARNATAKA HIGH COURT ITA NO.1602/AHD/2014 4 AND HONBLE ALLAHABAD HIGH COURT. HE MADE REFERENC E TO THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF SAGUN F OUNDRY P.LTD. VS. CIT, 78 TAXMANN.COM 47 (ALL.). THIS DECISION WAS RENDER ED ON 21.12.2016. HONBLE HIGH COURT HAS HELD THAT IF CONTRIBUTION IN CLUDING EMPLOYEES CONTRIBUTION HAS BEEN PAID BEFORE THE DUE DATE OF F ILING OF THE RETURN UNDER SECTION 139(1) OF THE ACT THEN, THE ASSESSEE WILL B E ENTITLED FOR THE DEDUCTION. SIMILAR IS THE DECISION OF THE HONBLE KARNATAKA HI GH COURT IN THE CASE OF ESSAE TERAOKA P.LTD. VS. DCIT, 43 TAXMANN.COM 33 ( KAR). OBJECT OF REFERRING ALL THESE DECISION IS THAT WHEN THE ASSES SEE FILED RETURN ON 25.12.2006, JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT WAS NOT AVAILABLE. IT CAME SUBSEQUENTLY, AND JUDGMENTS OF OTHER HIGH COURTS AS WELL AS OF THE TRIBUNAL WERE IN FAVOUR OF THE ASSESSEE. IT HAS NOT CONCEALED PARTICULARS OF ITS INCOME. IT HAS DISCLOSED EVERY DETAIL. ITS CLAIM WAS DISALLOWED ON ACCOUNT OF INTERPRETATION MADE BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF GUJARAT STATE ROAD TRANSPORT C ORPORATION (SUPRA). IN VIEW OF THIS SITUATION, WE ARE OF THE VIEW THAT THE ASSESSEE DOES NOT DESERVE TO BE VISITED WITH PENALTY. THE LD.CIT(A) HAS DELETED THE PENALTY ON THE SECOND ADDITION ALSO. ON DUE CONSIDERATION OF THE FACTS AN D CIRCUMSTANCES, WE DO NOT FIND ANY MERIT IN THIS APPEAL. IT IS DISMISSED. 7. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE COURT ON 7 TH APRIL, 2017 AT AHMEDABAD. SD/- SD/- ( MANISH BORAD ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 07/04/2017