M/s. Orbis Elevator Company Ltd., Ahmedabad V. DCIT, Circle-3(1)(1), Ahmedabad

ITA 1615/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4183 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 02-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271(1)(c); 80HHC; 80IC; 44AB; 80IC

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI , MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO.1615/AHD/2018 { / ASSESSMENT YEAR: 2009-10 M/S. ORBIS ELEVATOR COMPANY LTD. 302, APOLLO ARCADE, R.C. TECHNICAL COLLEGE ROAD, GHATLODIA, AHMEDABAD PAN NO.AAACO1817E VS DCIT, CIRCLE- 3(1)(1) AHMEDABAD ! / (APPELLANT) '# ! / (REVENUE) APPELLANT BY : SHRI :HARDIK VORA, AR REVENUE BY : SHRI : MUKESH JAIN, SR. DR / DATE OF HEARING : 27/02/2020 / DATE OF PRONOUNCEMENT: 28/02/2020 $%/ O R D E R PER SHRI MANISH BORAD, A.M: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-9, AHMEDABAD DATED 17.05.2018 PERTAINING TO ASSESSMENT YEAR 2009-10 WHICH IS ARIS ING OUT OF THE ORDER U/S 271(1)(C) OF THE INCOME TAX AC T 1961(HEREINAFTER CALLED AS THE ACT) FRAMED ON 23.06.2017 BY ITO, WARD -3(1)(1), AHMEDABAD. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: ITA NO.1615/AHD/2018 ORBIS ELEVATOR COMPANY LTD. FOR AY 2009-10 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT. THE LD. CIT(A) HAS ERRED IN CONFIRMING PENALTY OF RS.2,47,710/- LEVIED BY ASSESSING OFFICER U/S 271(1)(C) OF THE ACT. 2. IT IS PRAYED THAT PENALTY LEVIED BY ASSESSING OFFICER AND CONFIRMED BY COMMISSIONER OF INCOME TAX (APPEALS) MAY PLEASE BE DELETED. 3. APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ANY GROUNDS EITHER BEFORE OR IN THE COURSE OF HEARING OF THE APPEAL. 2. SOLE GRIEVANCE OF THE ASSESSEE RELATES TO LEVY O F PENALTY U/S 271(1)(C) OF THE ACT AT RS. 2,47,710/- LEVIED BY THE LD. AO ON THE EXCESS CLAIM OF DEDUCTION U/S 80IC OF THE ACT ON ACCOUNT OF REALLOCATION OF THAT REMUNERATION OF RS.5,49,480/- AND OTHER EXPENSES OF RS.2,52,158/-. 3. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE BOTH LOWER AUTHORITIES AS W ELL AS THE DECISIONS REFERRED AND RELIED THEREIN. HE AL SO SUBMITTED THAT THE REVENUE AUTHORITIES HAVE NOT DOUBTED THE GENUINENESS OF THE EXPENDITURE, ITS A MERE ALLOCATION WHICH IS IN DISPUTE FOR WHICH NO PENALTY SHOULD HAVE BEEN LEVIED. ITA NO.1615/AHD/2018 ORBIS ELEVATOR COMPANY LTD. FOR AY 2009-10 3 4. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE (DR) VEHEMENTLY ARGUED SUPPORTING THE ORDERS OF LOWER AUTHORITIES. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD PLACED BEFORE US. THE ASSESSEE HAS CHALLENGE D THE FINDING OF LD. CIT(A) CONFIRMING THE LEVY OF PE NALTY AT RS.2,47,710/- U/S 271(1)(C) OF THE ACT BY THE ASSESSING OFFICER ON THE FOLLOWING TWO DISALLOWANCE S: I. DISALLOWANCE OF DIRECTORS REMUNERATION AT RS.5,49,480/- FOR NOT ALLOCATING PART OF IT AGAINST THE REVENUE FROM HIMACHAL BUSINESS DIVISION ELIGIBLE FO R DEDUCTION U/S 80IC OF THE ACT. II. DISALLOWANCE OF OTHER EXPENSES FOR IMPROPER ALLOCATION BETWEEN AHMEDABAD DIVISION HAVING TAXABL E INCOME AND THE HIMACHAL DIVISION ELIGIBLE FOR DEDUC TION U/S 80IC OF THE ACT. 6. WE OBSERVE THAT GENUINENESS OF THE EXPENDITURE I S NOT IN DOUBT AT ANY STAGE BEFORE THE LOWER AUTHORIT IES AND BEFORE US. DIRECTORS REMUNERATION OF RS.14,46,000/- WAS DEBITED UNDER THE PROFIT AND LOS S ACCOUNT OF AHMEDABAD UNIT SINCE BUSINESS IS CONTROL LED THERE FROM. A PROPORTIONATE AMOUNT OF DIRECTORS ITA NO.1615/AHD/2018 ORBIS ELEVATOR COMPANY LTD. FOR AY 2009-10 4 REMUNERATION WAS ALLEGED TO HAVE NOT BEEN DEBITED T O THE HIMACHAL PRADESH DIVISION THEREBY CLAIMING EXCE SS DEDUCTION U/S 80IC OF THE ACT. THE ASSESSEE HAS GIV EN SUFFICIENT REASON TO PROVE THAT THE DIRECTORS ARE M AINLY CONFINED TO WORK AT AHMEDABAD AND SEPARATE STAFF IS APPOINTED TO LOOK AFTER THE REGULAR DAY TO DAY AFFA IRS AT HIMACHAL PRADESH DIVISION. 7. AS REGARDS OTHER EXPENSES OF RS.252,158/- WE OBSERVE THAT THE ASSESSEE DID THE ALLOCATION AS PER REGULAR PRACTICE. 8. IN THESE GIVEN FACTS WHERE THE GENUINENESS OF EXPENDITURE IS NOT IN DOUBT AND ASSESSEE HAS OPTED FOR ONE OF THE POSSIBLE WAY OF ALLOCATION OF EXPENSES W HICH HAS BEEN DOUBTED BY THE LD. AO WHETHER THE ASSESSEE CAN BE SAID TO HAVE CONCEALED THE PARTICULAR OF IN COME OR FURNISHING INACCURATE PARTICULARS OF INCOME. 9. WE OBSERVE THAT THE ASSESSEE IN ORDER TO CLAIM DEDUCTION U/S 80IC OF THE ACT HAS FURNISHED THE CERTIFICATE FROM A CHARTERED ACCOUNTANT ON FORM NO.10CCB AND BOOKS OF ACCOUNTS ARE ALSO AUDITED U/S 44AB OF THE ACT. IN THE CASE OF KASINKA TRADINGS VS. CIT ITA NO.1615/AHD/2018 ORBIS ELEVATOR COMPANY LTD. FOR AY 2009-10 5 1999 63 TTJ(ASR.) 348, IT WAS HELD THAT WHERE THE ASSESSEE HAS CORRECTLY FILED PARTICULARS REGARDING DEDUCTION UNDER SECTION 80HHC AND ALSO CERTIFICATE OF CHARTERED ACCOUNT AS REQUIRED UNDER SECTION 80HHC(4 ), ADDITION OF ACCOUNT OF RECALCULATION OF CLAIM BY TH E ASSESSING OFFICER COULD NOT BE TREATED AS CONCEALME NT OF INCOME BY THE ASSESSEE. 10. SIMILAR IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS 2010 3 TAXMANN.COM 47, IT WAS HELD THAT SECTION 271(1)(C) APPLIES WHERE THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THE PRESENT WAS NOT A C ASE OF CONCEALMENT OF THE INCOME. AS REGARDS THE FURNIS HING OF INACCURATE PARTICULARS, NO INFORMATION GIVEN IN THE RETURN WAS FOUND TO BE INCORRECT OR INACCURATE. THE WORDS INACCURATE PARTICULARS MEAN THAT THE DETAILS SUPPLIED IN THE RETURN ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. IN TH E ABSENCE OF A FINDING BY THE ASSESSING OFFICER THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE, THERE WOULD BE NO QUESTION OF INVITING PENALTY UNDER SECTION 271(1)(C ) OF THE ACT. THE ARGUMENT OF THE REVENUE THAT SUBMITTING A N ITA NO.1615/AHD/2018 ORBIS ELEVATOR COMPANY LTD. FOR AY 2009-10 6 INCORRECT CLAIM FOR EXPENDITURE WOULD AMOUNT TO GIV ING INACCURATE PARTICULARS OF SUCH INCOME IS NOT CORREC T. BY NO STRETCH OF IMAGINATION CAN BE MAKING OF AN INCOR RECT CLAIM IN LAW TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. A MERE MAKING OF THE CLAIM, WHICH IS N OT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INC OME OF THE ASSESSEE. IF THE CONTENTION OF THE REVENUE IS A CCEPTED THEN IN CASE OF EVERY RETURN WHERE THE CLAIM MADE I S NOT ACCEPTED BY THE ASSESSING OFFICER FOR ANY REASON, T HE ASSESSEE WILL INVITED PENALTY UNDER SECTION 271(1)( C). THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATU RE. 11. IN THE LIGHT OF THE ABOVE JUDGMENTS AND IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THE CASE OF THE ASSESSEE DO NO T FALL EITHER IN THE CATEGORY OF THE CONCEALMENT OF PARTI CULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME, SINCE THE GENUINENESS OF EXPENSES IS NOT I N DOUBT AND THEY HAVE BEEN DULY SHOWN IN THE AUDITED FINANCIAL STATEMENTS AND CERTIFICATE OF CHARTERED ACCOUNTANT FOR DEDUCTION U/S 80IC OF THE ACT ALSO STANDS OBTAINED. THEREFORE, IN THESE FACTS AND CIRCUMSTANCES LD. AO WAS NOT JUSTIFIED IN LEVYING ITA NO.1615/AHD/2018 ORBIS ELEVATOR COMPANY LTD. FOR AY 2009-10 7 PENALTY U/S 271(1)(C) OF THE ACT AT RS. 2,47,710/- AND WE DIRECT THE SAME TO BE DELETED. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 .02.2020 . SD/- SD/- (MAHAVIR PRASAD) JUDICIAL MEMBER ( MANISH BORAD) ACCOUNTANT MEMBER AHMEDABAD; DATED 28 /02/2020 PATEL, PS $% & ''() *$)' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! ( ) / THE CIT(A)- XV, AHMEDABAD 5. $%& '' , , )*++ / DR, ITAT, AHMEDABAD 6. &,- . / GUARD FILE. $% + / BY ORDER, TRUE COPY ,/ - ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD