Bhasker Power Project Pvt. Ltd., Daman V. The ACIT, Vapi Circle- 2, Vapi

ITA 1639/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1653 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-05-2016
• Assessment Year: 1999-2000
• Appeal Filed On: 03-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: S H RI ANIL CHATURVEDI , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER BHASKER POWER PROJECT PVT. LTD, H - 13, MAHATMA GANDHI UDYOG NAGAR, INDUSTRIAL ESTATE, DABHEL, DAMAN - 396210 PAN: AAACB1306P (APPELLANT) VS THE ACIT, VAPI CIRCLE - 1, VAPI (RESPONDENT) REVENUE BY : S H R I MUDIT NAGPAL , SR. D . R. ASSESSEE BY: S H RI M.K. PATEL , A.R. DATE OF HEARING : 03 - 05 - 2 016 DATE OF PRONOUNCEMENT : 06 - 05 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THESE TWO ASSESSEE S APPEALS FOR A.Y. 1999 - 2000 & 2004 - 05 , AR ISE FROM ORDER OF THE CIT(A), VALSAD DATED 25 - 03 - 2013 IN APPEAL NOS. CIT(A)/VLS/132/11 - 12 AND CIT(A)/VLS/131/11 - 12, IN PROCEEDINGS UNDER SECTION 271(1 ) (C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO S . 1639 & 1640 / A HD/20 1 3 A SSESSMENT YEAR 1999 - 2000 & 2004 - 05 I.T.A NO S . 1639 & 1640 /AHD/20 13 A.Y.1999 - 2000 & 2004 - 05 PAGE NO BHASKER POWER PROJECT PVT. LTD. VS. ACIT 2 2. THE ASSESSEE S SOLITARY SUBSTANTIVE GROUND IDENTICAL IN BOTH THESE INSTANT APPEALS CHALLENGES SECTION 271(1) (C) PENALTY OF RS. 21,610/ - AND RS. 2,98,101/ - ; RESPECTIVELY IMPOSED BY THE ASSESSING OFFICER AND AFFIRMED IN THE LOWER APPELLATE PROCEEDINGS. WE TAKE UP ITA 1640/AHD/2013 AS THE LEAD CASE FOR THE SAKE OF BREVITY. 3. FACTS OF THE CASE ARE IN A NARROW COMPASS. THE ASSESSEE - FIRM ASSEMBLES DIESEL GENERATOR SET IN ITS UNIT LOCATED AT DAMAN SPE CIFIED IN VIIITH SCHEDUL E TO THE ACT. IT CLAIMED SECTION 80IB DEDUCTION. THIS CLAIM INCLUDED OTHER INCOME OF RS. 8,30,944/ - IN ITS P & L ACCOUNT. THE ASSESSING OFFICER IN ASSESSMENT ORDER DATED 29 - 12 - 2006 HELD THAT ASSESSEE S ASSEMBLING UNIT OF DIESEL GENERATOR SET DID NOT AMO UNT TO MANUFACTURING U/S. 80IB OF THE ACT. WE ARE ADMITTEDLY NOT CONCERNED WITH THIS ISSUE. HE WENT ON TO HOLD THAT THIS OTHER INCOME HAD NOT BEEN DERIVED FROM PROFITS OF THE ELIGIBLE UNIT/UNDERTAKING AS PER HON BLE APEX COURT DECISION IN CIT VS. STERLIN G FOOD (1999) 237 ITR 579 (SC) AND PANDIAN CHEMICALS VS. CIT (2003) 262 ITR 278 (SC) SINCE THE SAME DID NOT HAVE DIRECT OR IMMEDIATE NEXUS WITH THE MANUFACTURING UNIT IN QUESTION . THE ASSESSEE INFORMS AT THE OUTSET THAT THIS TRIBUNAL IN QUANTUM PROCEEDING S HAS ALREADY DECIDED THE INSTANT ISSUE IN REVENUE S FAVOUR. WE REVERT BACK TO QUANTUM PROCEEDINGS. THE ASSESSING OFFICER INITIATED THE IMPUGNED PENALTY PROCEEDINGS U/S. 271(1 )(C) OF THE ACT. 4. IT APPEARS THAT THE ASSESSEE FILED ITS EXPLANATION ON 13 - 07 - 2011 INTER ALIA PLEADING THAT IT HAD PARTLY SUCCEEDED IN APPELLATE I.T.A NO S . 1639 & 1640 /AHD/20 13 A.Y.1999 - 2000 & 2004 - 05 PAGE NO BHASKER POWER PROJECT PVT. LTD. VS. ACIT 3 PROCEEDINGS AND THE SAME IMPLIED THAT THIS WAS NOT A CASE OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE ASSESSING OFFICER IN PENALTY ORDER DATED 270 - 7 - 2011 OBSER VED THAT THIS WAS A VERY VAGUE PLEA. HE HELD THAT THE ASSESEE S ACTION IN CLAIMING SECTION 80IB DEDUCTION ON OTHER INCOME AMOUNTED TO CONCEALMENT OF TRUE INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. ALL THIS RESULTED IN THIS IMPOSITION OF I MPUGNED PENALTY OF R S.2,98,101/ - ARISING FROM OTHER INCOME ADDITION OF RS. 8,30,944/ - . THE CIT(A) CONFIRMS ASSESSING OFFICER S ACTION. 5. WE HAVE HEARD BOTH SIDES. LD. REPRESENTATIVES APPEARING AT ASSESSEE S AND REVENUE S BEHEST REITERATE THEIR RESPEC TIVE SUBMISSIONS . THERE IS NO DISPUTE THAT THE ASSESSEE S P & L ACCOUNT AS INDICATED HEREINABOVE COMPRISED OF ALL NECESSARY PARTICULARS QUA ITS INCOME IN QUESTION FOR THE PURPOSE OF CLAIMING SECTION 80IB DEDUCTION. THE SAME STOOD DISALLOWED ON THE GROUND THAT THIS INCOME HAD NOT BEEN DERIVED FROM THE ELIGIBLE UNIT. IT DID NOT HAVE ANY DIR ECT OR IMMEDIATE NEXUS WITH THE MANUFACTURING ACTIVITIES IN QUESTION . IT HAS COME ON RECORD THAT THAT ASSESSING OFFICER IN THE COURSE OF SCRUTINY DID NOT HAVE TO REJECT ASSESSEE S P & L ACCOUNT OR THE CONTENTS THEREIN. WE HOLD IN THESE FACTS AND CIRCUMSTANCES THAT THE INSTANT CASE IS AN INSTANCE OF MERE DISALLOWANCE OF A DEDUCTION CLAIM RATHER THAN THAT OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE LAW IS VERY WELL SETTLED BY NOW IN VIEW OF HON BLE APEX COURT DECISION IN CIT VS. RELIANCE PETRO - PRODUCTS 322 ITR 158 THAT EACH AND EVERY DISALLOWANCE/ADDITION MADE IN COURSE OF I.T.A NO S . 1639 & 1640 /AHD/20 13 A.Y.1999 - 2000 & 2004 - 05 PAGE NO BHASKER POWER PROJECT PVT. LTD. VS. ACIT 4 ASSESSMENT DOES NOT NECESSARILY LEAD TO IMPOSITION OF THE IMPUGNED SECTION 271(1) (C) PENALTY. WE DRAW SUPPORT THEREFORE TO ACCEPT THE ASSESSEE S ARGUMENT. THE PENALTY IN QUESTION OF RS. 2,98,101/ - STANDS DELETED. ITA 1640/AHD/2013 IS ACCEPTED. 6. SAME ORDER TO FOLLOW IN THE OTHER APPEAL ITA 1639/AHD/2013 CH ALLENGING IDENTICA L PENALTY OF R S. 21,610/ - . 7. THE ASSESSEE SUCCEEDS IN BOTH THESE APPEALS. ORDER PR ONOUNCED IN THE OPEN C OURT ON 06 - 05 - 201 6 SD/ - SD/ - ( ANIL CHATURVEDI ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 06 /05 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,