M/s. Fine Food Industries, Bhavnagar V. The ITO, Ward-2(4), Bhavnagar

ITA 1855/AHD/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5549 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 09-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A C SHAH
• Section: 271(1)(c)

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR ./ I.T.A. NO. 1855/AHD/2017 ( ASSESSMENT YEAR : 2010-11) M/S. FINE FOOD INDUSTRIES SURVEY NO. 158-159, HARIPARA ROAD, POST: TAVEDA, TAL.: MAHUVA, DIST: BHAVNAGAR / VS. THE ITO WARD 2(4), BHAVNAGAR ./ ./ PAN/GIR NO. : AABFF6886G ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI A. C. SHAH, A.R. / RESPONDENT BY : SHRI UMA SHANKAR PRASAD, SR.D.R. DATE OF HEARING 31/01/2019 !'# / DATE OF PRONOUNCEMENT 31/01/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-6, AHMEDAB AD (CIT(A) IN SHORT), DATED 26.05.2017 ARISING IN THE PENALTY ORDER DATED 30.03.2016 PASSED BY THE ASSESSING OFFICER (AO) UND ER S. ITA NO. 1855/AHD/17 [M/S. FINE FOOD INDUSTRIES VS. ITO] A.Y. 2010-11 - 2 - 271(1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT) CON CERNING AY 2010-11. 2. AS PER GROUNDS OF APPEAL, THE ASSESSEE HAS CH ALLENGED THE JURISDICTION OF THE AO UNDER S. 271(1)(C) OF THE AC T AS WELL AS IMPOSITION OF PENALTY OF RS.94,820/- ON MERITS. 3. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEA RNED AR FOR THE ASSESSEE POINTED OUT THAT THE PENALTY HAS BEEN IMPO SED ON DENIAL OF DEDUCTION UNDER S.80IB OF THE ACT TOWARDS INSURA NCE CLAIM RECEIVED RS.1,29,927/-; SUBSIDY RECEIVED RS.85,300/ -; DUTY DRAWBACK CLAIM RECEIVED RS.31,109/- AND ADDITION ON ACCOUNT OF ACCRUED INTEREST FROM PGVCL RS.60,530/- NOT RECOGNI ZED BY THE ASSESSEE. 4. IT IS OSTENSIBLE FROM THE RECORD THAT AO HAS DEN IED THE DEDUCTION UNDER S.80IB OF THE ACT IN RESPECT OF CER TAIN ITEMS ON THE GROUND THAT SUCH INCOME DOES NOT BEAR NEXUS WIT H THE MANUFACTURING ACTIVITY. THE EXPENDITURE CLAIMED HA S NOT BEEN DISPUTED PER SE. IT IS WELL SETTLED THAT INCORRECT CLAIM OF EXPENDITURE WOULD NOT AMOUNT TO GIVING INACCURATE P ARTICULARS OF INCOME AS HELD BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. AMOL DICALITE LTD. [2015] 55 TAXMANN.COM 41 9 (GUJ). NEEDLESS TO SAY, THE IMPOSITION OF PENALTY ON ADDITIONS/DISALLOWANCES IS NOT AUTOMATIC. THE BONA FIDES IN THE ACTION OF THE ASSESSEE IS NOT DISPUTED PER SE. SUCH ERRONEOUS CLAIM ON THE PART OF THE ASSESSEE IN OUR VIEW WOULD NOT INVITE THE RIGORS OF SECTION 271(1)(C) OF THE ACT. THUS, PENA LTY IMPOSED BY THE AO IS DELETED ON MERITS. WE DO NOT SEEK TO DEA L WITH THE LEGAL ITA NO. 1855/AHD/17 [M/S. FINE FOOD INDUSTRIES VS. ITO] A.Y. 2010-11 - 3 - ASPECTS AS THE SAME WERE NOT PRESSED IN THE COURSE OF HEARING. THE AO IS ACCORDINGLY DIRECTED TO DELETE THE PENALT Y SO IMPOSED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 31/01/2019 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 31/01/201 9