SULZER INDIA LTD, PUNE V. DCIT RG 8(3), MUMBAI

ITA 1692/MUM/2009

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8797 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 13-09-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 13-03-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GIRIJA DAYAL
• Assessee Lawyers: RONAK G DOSHI
• Keywords: Depreciation
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI D.K. AGARWAL, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO.1692/MUM/2009 ASSESSMENT YEAR-2003-04 M/S. SULZER INDIA LTD., SULZER HOUSE, BANER ROAD, AUNDH, PUNE-411 007 PAN-AAACS 7876D VS. THE DCIT, RANGE 8(3), MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI RONAK G. DOSHI RESPONDENT BY: SHRI GIRIJA DAYAL DATE OF HEARING :13.09.2012 DATE OF PRONOUNCEMENT: O R D E R PER N.K. BILLAIYA, AM: THIS PRESENT APPEAL BY THE ASSESSEE IS DIRECTED AG AINST THE ORDER OF LD. CIT(A)-XXIX, MUMBAI DT.24.2.2009 PERTAINING TO ASS ESSMENT YEAR 2003-04. THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN UPHOLDING THE ACTION OF DCIT IN LEVYING PENALTY U/S. 271(1)(C ) OF THE ACT AMOUNTING TO RS. 1,62,89,080/-. 2. THE ROOTS FOR THE LEVY OF PENALTY U/S. 271(1)(C) LIE IN THE ASSESSMENT ORDER WHEREIN THE FOLLOWING ADDITIONS/DISALLOWANCES WERE MADE WHILE COMPLETING THE ASSESSMENT ORDER. 1. DEPRECIATION RS. 31,144/- 2. MEMBERSHIP EXPENSES RS. 2,17,007/- 3. REMISSION ON LIABILITY ON PREMATURE REPAYMENT OF DEFERRED SALES TAX RS. 4,14,87,985/- 4. REDUCTION IN DEDUCTION U/S. 80HHC RS. 25,87,900/- 2 THE PENALTY HAS BEEN IMPOSED ON THE AFOREMENTIONED ADDITIONS CONFIRMED BY THE LD. CIT(A) IN THE QUANTUM APPEAL. 3. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASS ESSEE DREW OUR ATTENTION TO THE ORDER OF THE TRIBUNAL IN 1TA NOS. 2871 & 2944/M /07 AGAINST THE QUANTUM APPEAL AND POINTED OUT THAT THE ISSUE RELATED TO TH E DISALLOWANCE OF DEPRECIATION TO THE EXTENT OF 20% HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL IN THE AFOREMENTIONED APPEAL. 4. WE HAVE CONSIDERED THE SUBMISSION AND PERUSED TH E ORDER OF THE TRIBUNAL. WE FIND THAT AT PARA 43, THE TRIBUNAL HAS SET ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECTED THE AO TO ALLOW DEPRECIATION AS CLAIME D BY THE ASSESSEE AT THE RATE OF 40% AS THE ADDITIONS HAVE BEEN DELETED BY T HE TRIBUNAL, PENALTY TO THAT EXTENT IS CANCELLED. THE LD. COUNSEL PROCEEDED TO SUBMIT THAT THE ISSUE RELATING TO THE DISALLOWANCE OF CLUB MEMBERSHIP FEE S HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL IN THE AFORE MENTIONED SAID ORDER. A PERUSAL OF THE ORDER OF THE TRIBUNAL SHOWS THAT THE ISSUE HAS BEEN DEALT AT PARAS-45 TO 55 OF THE TRIBUNALS ORDER. 5. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, THE TRIBUNAL HAS THUS HELD THAT WE THEREFORE REVERSE THE FINDINGS OF THE REVENUE A UTHORITIES AND SET ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE AO TO ALLOW THE EXPENSE CLUB MEMBERSHIP . AS THE IMPUGNED ADDITION HAS BEEN DELETED, WE DO NOT FIND ANY REASON TO CONFIRM THE PENALTY ON THIS ACCO UNT. 6. THE NEXT ADDITION ON WHICH THE PENALTY HAS BEEN LEVIED RELATES TO REMISSION ON LIABILITY ON PRE-MATURED REPAYMENT OF DEFERRED S ALES-TAX. 7. THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THA T THIS ADDITION HAS ALSO BEEN DELETED BY THE TRIBUNAL IN THE AFOREMENTIONED ORDER OF THE TRIBUNAL. A PERUSAL OF THE SAID ORDER OF THE TRIBUNAL SHOW THAT THIS ISSUE HAS BEEN DEALT BY THE TRIBUNAL AT PARAS 57 TO 61 WHEREIN THE TRIBU NAL HAS FOLLOWED THE DECISION OF THE SPECIAL BENCH IN ASSESSEES OWN CAS E REPORTED IN 6 ITR 604 3 (TRIB). THE TRIBUNAL HAS FURTHER RELIED UPON THE DE CISION IN THE CASE OF DCIT VS STERLITE INDUSTRIES IN ITA NO. 7136 & 7177/M/04. WE ALSO FIND THAT THE TRIBUNAL HAS FURTHER RELIED UPON THE DECISION OF HO NBLE SUPREME COURT IN THE CASE OF CIT VS. POUNI SUGAR & CHEMICALS LTD. REPORT ED IN 306 ITR 392(SC) AND DELETED THE IMPUGNED ADDITION. AS THE SAID ADDI TION HAS BEEN DELETED BY THE TRIBUNAL, LEVY OF PENALTY CANNOT BE JUSTIFIED. 8. THE LAST ADDITION ON WHICH THE PENALTY HAS BEEN LEVIED RELATES TO REDUCTION IN DEDUCTION U/S. 8OHHC OF THE ACT. 9. THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THA T THIS ISSUE IN THE QUANTUM APPEAL HAS BEEN RESTORED BACK TO THE FILE O F THE AO TO DECIDE IN LINE WITH THE DECISION TAKEN IN THE PRECEDING ASSESSMENT YEARS I.E. A.YRS 2001-02 AND 2002-03. THE LD. COUNSEL FURTHER POINTED OUT TH AT IN THE PRECEDING ASSESSMENT YEARS ALSO THE ISSUE HAS BEEN RESTORED B ACK TO THE FILES OF AO KEEPING IN VIEW OF THE DECISION OF THE HONBLE SUPR EME COURT IN THE CASE OF M/S. ACG ASSOCIATES CAPSULES PVT. LTD. VS CIT 343 1 TR 89. 10. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY THE ASSESSEES COUNSEL AND PERUSED THE ORDER OF THE TRIBUNAL IN 1TA NO. 2871 & 2944/M/07 (SUPRA). AS THE QUANTUM ADDITION HAS BEEN RESTORED BACK TO THE FILE OF THE AO ON THIS ACCOUNT, THE ISSUE OF LEVY OF PENALTY IS ALSO RESTO RED BACK TO THE FILE OF AO TO BE DECIDED AFTER THE FATE OF THE QUANTUM. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 26 TH DAY OF SEPTEMBER, 2012 SD/- SD/- (D.K. AGARWAL) (N.K. BILLAIYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 26 TH SEPTEMBER, 2012 RJ 4 COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR E BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, I.T.A.T, MUMBAI