Sterling Ceramics Pvt. Ltd., Ahmedabad V. The ITO, Ward-4(1)(2)., Ahmedabad

ITA 1771/AHD/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8321 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 21-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revenue expenditure
• Section: 271(1)(c); 201; 13

Judgement Text

ITA NO. 1771/AHD/2017 ASSESSMENT YEAR 2012 - 13 PAGE 1 OF 2 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD BENCH C , AHMEDABAD [CORAM : JUSTICE P P BHATT, PRESIDENT , AND PRAMOD KUMAR , VICE PRESIDENT ] ITA NO. 1771/AHD/2017 ASSESSMENT YEAR 2012 - 13 STERLING CERAMICS PVT LTD .....APPELLANT 921, NAVGHARIS POLE, SARASPUR CHAR RASTA, SARASPUR, AHMEDABAD 380 018 [PAN: AAFCS2069F] VS INCOME TAX OFFICER WARD 4(1)(2), AHMEDABAD ..........RESPONDENT DATE OF CONCLUDING THE HEARING : DECEMBER 20, 201 9 DATE OF PRONOUNC EMENT : MARCH 12 TH , 2020 ORDE R PER BENCH : 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 5 TH JUNE 2017 PASSED BY THE LEARNED CIT(A), IN THE MATTER OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2012 - 13. 2. GRIEVANCE OF THE ASSESSEE, IN SUBSTANCE, IS THAT THE LEARNED CIT(A) ERRED IN UPHOLDING THE PENALTY OF RS 8,04,570 IMPOSED ON THE ASSESSEE UNDER SECTION 271(1)(C) OF THE ACT. 3. THE ISSUE IN APPEAL LIES IN A NARROW COMPASS OF MATERIAL FACTS. THE ASSESSEE BEFORE US IS A MANUFACTURER OF GLAZED TILES. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS PAID INTEREST OF RS 26,03,786 ON THE LOAN WHICH WAS USED FOR CAPITAL PROJECT. AS THE ASSESSEE COULD NOT SUBSTANTIAT E THE CLAIM FOR REVENUE EXPENDITURE, THIS INTEREST DEDUCTION WAS DISALLOWED. THE MATTER DID NOT REST AT THAT. THE ASSESSING OFFICER ALSO PROCEEDED TO IMPOSE PENALTY UNDER SECTION 271(1)(C) ON ACCOUNT OF CONCEALMENT OF INCOME. THE ASSESSEES CONTENTION THAT ALL THE INFORMATION WAS DULY DISCLOSED IN THE INCOME TAX RETURN AND IT WAS BASED ON THE INFORMATION SUBMITTED BY THE ASSESSEE THAT THE DISALLOWANCE WAS MADE, WAS REJECTED. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN ITA NO. 1771/AHD/2017 ASSESSMENT YEAR 2012 - 13 PAGE 2 OF 2 APPEAL BEFORE THE CIT(A) BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE AND THE APPLICABLE LEGAL POSITION. 5. WE FIND THAT WHILE THE INSERTION OF PROVISO TO SECTION 36(1)(III), AND AMENDMENT THERETO, HAVE SUCCESSFULLY NULLIFIED THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF CIT VS CORE HEALTHCARE LTD (298 ITR 194), IT IS A REASONABLE EXPLANATION OF THE ASSESSEE THAT THER E WAS A BONAFIDE ERROR BY THE TAX AUDITOR IN NOT REPORTING THIS INADMISSIBLE EXPENSES. IT IS A MATTER OF RECORD THAT THE TAX AUDITOR DID NOT REPORT THIS INADMISSIBLE AMOUNT, AND A COPY OF THE SAID REPORT IS ALSO PLACED BEFORE US IN THE PAPER BOOK. WE HAVE ALSO PERUSED COPIES OF SEVERAL DECISIONS OF THE COORDINATE BENCHES, PLACED IN THE PAPER - BOOK, WHEREIN, ON MATERIALLY SIMILAR FACTS, THE CONCEALMENT PENALTY UNDER SECTION 271(1)(C) HAS BEEN DELETED. GIVEN THIS FACTUAL AND LEGAL BACKDROP, IN OUR CONSIDERED V IEW, THE IMPOSITION OF PENALTY WAS INDEED NOT WARRANTED. 6. IN THE LIGHT OF THESE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, WE DEEM IT FIT AND PROPER TO DELETE THE IMPUGNED PENALTY OF RS 8,04,570. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 7. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED UNDER RULE 34(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1962, BY PLACING THE LIST OF PRONOUNCEMENTS BEING PLACED ON THE NOTICE BOARD. SD/ - SD/ - JUSTICE P P B HATT PRAMOD KUMAR ( PRESIDENT) ( VICE - PRESIDENT) D ATED THE 12 TH DAY OF MARCH , 20 20 COPIES TO : (1) THE APPELLANT (2) THE RESPONDEN T (3) CIT (4) CIT(A) ( 5 ) DR (6) GUARD FILE BY ORDER ASSISTANT/DEPUTY REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD