DCIT, Circle-2(1) (1), Baroda V. M/s The Spunpipe & Construction Co. (Baroda) Pvt. Ltd., Baroda

ITA 1651/AHD/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5285 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 05-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A C SHAH
• Keywords: Tax effect
• Section: 271(1)(c)

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO. 1651/AHD/2017 ( ASSESSMENT YEAR : 2010-11) DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 2(1)(1), BARODA / VS. M/S. THE SPUNPIPE & CONSTRUCTION CO. (BARODA) PVT. LTD. 505-506A, ALKAPURI ARCADE A, OPP. WELCOME HOTEL, R C DUTT ROAD, ALKAPURI, BARODA - 390007 ./ ./ PAN/GIR NO. : AAACT6738R ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI MUDIT NAGPAL, SR.D.R. / RESPONDENT BY : SHRI A. C. SHAH, A.R. DATE OF HEARING 25/01/2019 !'# / DATE OF PRONOUNCEMENT 29/01/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE CIT(A)-2, VADODARA (CIT(A) IN SHORT), DATED 24.04.2017 ARISING IN THE PENALTY ORD ER DATED 29.03.2016 PASSED BY THE ASSESSING OFFICER (AO) UND ER S. 271(1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING AY 2010-11. ITA NO. 1651/AHD/17 [DCIT VS. M/S. THE SPUNPIPE & CONSTRUCTION CO. (BARODA) PVT. LTD.] A.Y. 2010-11 - 2 - 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE REA D AS UNDER:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE C.I.T. (A) WAS JUSTIFIED IN DELETING THE PENALTY IMPOSED B Y THE A.O WITHOUT APPRECIATING THAT THE CASE OF THE ASSESSEE WAS NOT A CASE OF MERE DISALLOWANCE BUT WILLFUL AND DELIBERATE ATTEMPT TO CLAIM DEDUCTION U/S. 54G OF THE ACT, WITH AN INTENTION TO EVADE TAX, THEREBY LIABLE FOR PENALTY U/S. 271(1)(C) OF THE ACT, SINCE THE ASSESSEE ITSELF ADM ITTED THE FACT THAT LAND SOLD WAS NOT A LAND USED FOR PURPOSE AS SPECIFIED IN SEC TION 54G OF THE ACT AND A.O. ESTABLISHED THAT LAND FORMED PART OF STOCK-IN- TRADE OF BUSINESS OF 'DEVELOPERS' CARRIED ON BY THE ASSESSEE AND NOT FOR THE BUSINESS OF ANY INDUSTRIAL UNDERTAKING. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE C.I.T. (A) WAS JUSTIFIED IN DELETING THE PENALTY IMPOSED BY TH E A.O WITHOUT APPRECIATING THAT THE PROVISION OF SECTION 54G OF T HE ACT HAS TO BE FOLLOWED IN LETTER AND SPIRIT, WITH REGARD TO YEAR OF CHARGE ABILITY OF TAX AND CONDITIONS FOR CLAIMING DEDUCTION U/S. 54G OF THE A CT,, AND FAILURE TO DO SO INTENTIONALLY AMOUNTS TO FURNISHING INACCURATE PART ICULARS *OF INCOME, LIABLE FOR PENALTY U/S. 271 (1)(C) OF THE ACT. 3. AT THE TIME OF HEARING, IT WAS SUBMITTED BY THE LD.AR FOR THE ASSESSEE THAT APPEAL FILED BY THE REVENUE IS HIT BY RECENTLY ISSUED CBDT CIRCULAR NO.3 OF 2018 DATED 11/07/2018 REVISIN G THE PREVIOUS THRESHOLDS PERTAINING TO TAX EFFECTS. AS PER AFORE SAID CIRCULAR, ALL PENDING APPEALS FILED BY REVENUE ARE LIABLE TO BE D ISMISSED AS A MEASURE FOR REDUCING LITIGATION WHERE THE TAX EFFEC T DOES NOT EXCEED THE PRESCRIBED MONETARY LIMIT WHICH IS NOW REVISED AT RS.20 LAKHS. IN THE INSTANT CASE, THE TAX EFFECT ON THE DISPUTED ISSUES RAISED BY THE REVENUE IS STATED TO BE NOT EXCEEDING RS.20 LAK HS AND THEREFORE APPEAL OF THE REVENUE IS REQUIRED TO BE DISMISSED I N LIMINE. THE AR FURTHER POINTED OUT THAT NOTWITHSTANDING THE AFO RESAID CIRCULAR, THE QUANTUM APPEAL HAS ALSO BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE ITAT AND THIS PENALTY APPEAL OF THE REVENUE DOES NOT SURVIVE. THE AR REFERRED TO THE DECISION OF THE CO -ORDINATE BENCH IN ITA NO. 1883/AHD/2014 DATED 02.08.2017 IN QUANTUM P ROCEEDINGS FOR THIS PURPOSE. ITA NO. 1651/AHD/17 [DCIT VS. M/S. THE SPUNPIPE & CONSTRUCTION CO. (BARODA) PVT. LTD.] A.Y. 2010-11 - 3 - 4. THE LEARNED DR FOR THE REVENUE FAIRLY ADMITTED T HE APPLICABILITY OF THE CBDT CIRCULAR NO. 3 OF 2018. A CCORDINGLY, APPEAL OF THE REVENUE IS DISMISSED AS NOT MAINTAINA BLE. SECONDLY, PENALTY PROCEEDINGS DO NOT SURVIVE IN VIEW OF THE D ECISION OF ADDITIONS/DISALLOWANCES IN QUANTUM. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 29/01/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 29/01/201 9