The Alidhara Texpro Engineers Pvt.Ltd., Surat V. The Dy.CIT, Circle-1, Surat

ITA 2006/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85534 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 11-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: P B SHAH
• Keywords: Depreciation; Rectification of order; Wrong claim; Assessment record

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD , , BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.2006/AHD/2011 ( / ASSESSMENT YEAR : 2005-06) ALIDHARA TEXPRO ENGINEERS P.LTD. PLOT NO.B-52 ROAD NO.3 UDHYOGNAGAR, UDHNA / VS. THE DY.CIT CIRCLE-1 SURAT ' ./ ./ PAN/GIR NO. : AACCA 0256 D ( '% / APPELLANT ) .. ( &''% / RESPONDENT ) '%( / APPELLANT BY : SHRI P.B.SHAH, A.R. &''%)( / RESPONDENT BY : SHRI M.K. SINGH, SR.DR *) / DATE OF HEARING 07/01/2015 +,-.) / DATE OF PRONOUNCEMENT 09/01/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-I, SURAT (CIT(A) IN SHORT) DATED 14/06/2011 PERTAINING TO ASSESSMENT YEAR (AY) 2005-06. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEA L:- 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WE LL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS) HAS ITA NO.2006/AHD /2011 ALIDHARA TEXPRO ENGINEERS P.LTD. VS. DY.CIT ASST.YEAR 2005-06 - 2 - ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER IN LEVYING A PENALTY U/S.271(1)(C) OF THE ACT OF RS.11,03,958/-. 2. IT IS THEREFORE PRAYED THAT ABOVE PENALTY LEVIED B Y ASSESSING OFFICER AND CONFIRMED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS) MAY PLEASE BE DELETED. 3. APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE ANY GROUND(S) EITHER BEFORE OR IN THE COURSE OF HEARING OF THE APPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE CASE OF THE A SSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S.143( 3) RWS 142(2A) OF THE INCOME TAX ACT,1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 31/03/2008, THEREBY THE ASSESSING OFFICER (AO IN SHORT) MADE ADDITION ON ACCOUNT OF FALL IN GROSS PROFIT, DISALLOWANCE OUT OF DEDUCTION CLAIMED U/S.80IB OF THE ACT, DISAL LOWANCE OF DEPRECIATION AND DEDUCTION CLAIMED U/S.80IB OF THE ACT AND ADDITION BY INVOKING PROVISIONS OF SECTION 41(1) OF THE ACT. THE AO ALSO INITIATED THE PENALTY PROCEEDINGS. THE AO VIDE ORDER DATED 18/03/2010 LEVIED PENALTY IN RESPECT OF THE ADDITION MADE ON ACCOUNT OF FALL IN GP, DISALLOWANCE OF DEDUCTION CLAIMED U/S.80IB OF THE A CT AND DISALLOWANCE OF DEPRECIATION AND DEDUCTION CLAIMED U/S.80IB OF T HE ACT AGGREGATING TO RS.30,16,897/-. THE AO IMPOSED A PENALTY OF RS.11, 03,958/-. AGAINST THIS, THE ASSESSEE FILED AN APPEAL BEFORE THE LD.CI T(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE DISMISS ED THE APPEAL. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), NOW THE AS SESSEE IS FURTHER IN APPEAL BEFORE US. ITA NO.2006/AHD /2011 ALIDHARA TEXPRO ENGINEERS P.LTD. VS. DY.CIT ASST.YEAR 2005-06 - 3 - 3. IT WAS NOTICED THAT THE ASSESSEE VIDE LETTER DATED 09/08/2011 HAD SUBMITTED THAT A CHALLAN OF RS.10,000/- IS ENCLOSED WITH THE MEMORANDUM OF APPEAL. IT WAS FOUND THAT THE ASSESSEE HAD NOT ENCLOSED THE CHALLAN OF RS.10,000/- ALONG WITH MEMO OF APPEAL. ACCORDINGL Y, A DEFECT MEMO DATED 11.08.2011 WAS ISSUED TO THE ASSESSEE BY THE REGISTRY. HOWEVER, THE ASSESSEE DID NOT COMPLY WITH THE DEFECT MEMO AN D SUBSEQUENTLY A CHALLAN OF RS.500/- WAS SUBMITTED BY THE ASSESSEE D ATED 04/08/2011. THE LD.COUNSEL FOR THE ASSESSEE WAS CONFRONTED IN R ESPECT OF IN RESPECT OF THE AFORESAID LAPS. THE LD.COUNSEL FOR THE ASSES SEE SUBMITTED THAT IT WAS AN INADVERTENT MISTAKE, DUE TO TYPOGRAPHICAL ERROR IN RESPECT OF RS.500/-, THE ASSESSEE HAS WRITTEN RS.10,000/-. HE SUBMITTED THAT THIS BEING APPEAL AGAINST LEVY OF PENALTY. THE FILING FEE IS ONLY RS .500/- AS PER CLAUSE (D) OF SECTION 253(6) OF THE ACT. HE SUBMITTED THAT TH ERE WAS AN INADVERTENT MISTAKE AND FOR THAT HE OFFERS UNCONDITIONAL APOLOG Y TO THE TRIBUNAL. THE EXPLANATION OF THE ASSESSEE IS FOUND TO BE ACCEPTAB LE, HOWEVER, THE ASSESSEE IS CAUTIONED NOT TO REPEAT THIS KIND OF MI STAKE IN FUTURE TO AVOID ANY CONFUSION. THE LD.COUNSEL FOR THE ASSESSEE IN RESPECT OF THE MERIT OF THE CASE SUBMITTED THAT, IN QUANTUM APPEAL, THE ASS ESSEE FILED AN APPEAL BEFORE THE LD.CIT(A). THE LD.CIT(A) VIDE ORDER DAT ED 08/09/2008 HAS CONFIRMED THE ADDITION. HE SUBMITTED THAT IN RESPE CT OF FALL IN GP OF RS.25,46,363/-, THE ADDITION WAS DELETED BY THE HON BLE TRIBUNAL (ITAT BENCH D AHMEDABAD IN ITA NO.3496/AHD/2008 FOR AY 2005-06 VIDE ITA NO.2006/AHD /2011 ALIDHARA TEXPRO ENGINEERS P.LTD. VS. DY.CIT ASST.YEAR 2005-06 - 4 - ORDER DATED 12/08/2011. HE DREW OUR ATTENTION TOWA RDS PARAS-7,8 & 9 OF THE SAID ORDER OF THE TRIBUNAL, WHEREIN THE HONBLE COORDINATE BENCH HAS HELD THAT THE ADDITION MADE ON ACCOUNT OF FALL IN G P IS NOT JUSTIFIED. HE FURTHER SUBMITTED THAT IN RESPECT OF ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S.80IB OF THE ACT AMOUN TING TO RS.2,38,533/-, THE AO DISALLOWED DEDUCTION OF RS.2, 38,533/- ON INTEREST INCOME, IN RESPECT OF VATAV KASAR OF RS.5,82,803/- AND RS.1,85,643/- RESPECTIVELY. HE SUBMITTED THAT SO FAR AS THE INTE REST OF RS.5,82,803/-, IT IS SUBMITTED AT THE OUTSET THE ASSESSEE HAS SUO-MOT O DISALLOWED INTEREST INCOME OF RS.5,82,803/- WHILE WORKING OUT DEDUCTION U/S.80IB OF THE ACT AND ASSESSING OFFICER ALSO PASSED ORDER U/S.154 OF THE ACT ON 05/05/2008. HE SUBMITTED THAT THE AO HAS WRONGLY OBSERVED THAT THE ASSESSEE DID NOT EXCLUDE THE INTEREST INCOME OF RS.5,82,803/- WHILE WORKING OUT DEDUCTION U/S.80IB OF THE ACT. THE WORKING OF THE DEDUCTION U/S.80IB AND AUDIT REPORT U/S.80IB IN FORM NO.10CCB IS ENCLO SED BY THE ASSESSEE FOR KIND PERUSAL. HE ALSO DREW OUR ATTENTION TOWAR DS RECTIFICATION ORDER PASSED U/S.154 OF THE ACT BY THE AO PLACED AT PAGE NO.4 OF THE PAPER- BOOK. IN RESPECT OF AN AMOUNT OF RS.1,85,643/-, T HE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DISALLOWANCE U/S.80IB O F THE ACT OF VATAV KASAR WAS DELETED BY THE HONBLE TRIBUNAL VIDE ORDE R DATED 12/08/2011 IN ITA NO.34967/AHD/2008(SUPRA). HE DREW OUR ATTEN TION TOWARDS PARA- 14 OF THE ORDER OF THE COORDINATE BENCH. IN RESPE CT OF DISALLOWANCE OF DEPRECIATION AND DEDUCTION CLAIMED U/S.80IB OF THE ACT AMOUNTING TO ITA NO.2006/AHD /2011 ALIDHARA TEXPRO ENGINEERS P.LTD. VS. DY.CIT ASST.YEAR 2005-06 - 5 - RS.2,32,001/-, THE LD.COUNSEL FOR THE ASSESSEE SUB MITTED THAT IN EARLIER YEARS, THE ASSESSEE CLAIMED DEDUCTION U/S.80IB OF T HE ACT WITHOUT CLAIMING DEPRECIATION. HE SUBMITTED THAT THE AO AN D THE SPECIAL AUDITOR HAVE WORKED OUT THE AMOUNT OF DISALLOWANCE U/S.80IB OF RS.2,32,001/- BEING THE DEDUCTION CLAIMED AT ENHANCED PROFIT BY N OT CLAIMING THE DEPRECIATION IN THE EARLIER YEARS. HE SUBMITTED THAT THE HONBLE TRIBUNAL ON THE BASIS OF THE DECISION OF SPECIAL BE NCH OF ITAT IN THE CASE OF VAHID PAPER CONVERTERS & OTHERS IN ITA NO.1 686/AHD/2004 CONFIRMED THE DISALLOWANCE. HE SUBMITTED THAT, IN FACT, THE ASSESSEE CLAIMED THE DEDUCTION U/S.80IB AFTER CLAIMING OF TH E DEPRECIATION DURING THE YEAR UNDER CONSIDERATION AS CAN BE PERUSED FROM THE WORKING OF DEDUCTION U/S.80IB OF THE ACT. HOWEVER, THE AO REC OMPUTED THE PROFIT BY ALLOWING DEPRECIATION OF EARLIER YEARS ALTHOUGH IN FACT IT WAS NOT ALLOWED IN ASSESSMENT RECORDS. HE SUBMITTED THAT, UNDER SUCH CIRCUMSTANCES, THE DECISION OF VAHID PAPER CONVERT ERS & OTHERS CITED SUPRA IS NOT APPLICABLE AS HELD IN THE CASE OF KHEM ANI DISTILLERS VS. ACIT IN ITA NO.2149/AHD/2007 OF ITAT, AHMEDABAD. EVEN OTHERWISE, THE ASSESSEES CASE IS COVERED BY THE DECISION OF HONB LE SUPREME COURT IN CASE OF CIT VS. RELIANCE PETROPRODUCTS PVT.LTD. REP ORTED AT 322 ITR 158(SC). HE SUBMITTED THAT, IN FACT, IN THIS CA SE THE ASSESSEE DID NOT FILE ANY INACCURATE PARTICULARS OF INCOME AS ASSESS EE DID CLAIM THE DEPRECIATION DURING THE YEAR AND IN THE EARLIER YEA RS THE AO HIMSELF ITA NO.2006/AHD /2011 ALIDHARA TEXPRO ENGINEERS P.LTD. VS. DY.CIT ASST.YEAR 2005-06 - 6 - THRUST UPON DEPRECIATION ON ASSESSEE. THE LD.COUNS EL FOR THE ASSESSEE PRAYED THAT THE TRIBUNAL MAY PLEASE BE DELETED THE PENALTY. 4. ON THE CONTRARY, LD.SR.DR SUPPORTED THE ORDERS O F THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE DECISIONS RELIED UPON BY THE LD.COUN SEL FOR THE ASSESSEE. THERE IS NO DISPUTE WITH REGARD TO THE DELETION OF ADDITION IN RESPECT OF THE ADDITION OF RS.25,46,363/- MADE ON ACCOUNT OF F ALL IN GP AND THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF DEDUCTI ON AMOUNTING TO RS.2,38,533/-, THE AO HAS DISALLOWED THE DEDUCTION ON THE BASIS THAT THE ASSESSEE DID NOT DISALLOW THE INTERST OF RS.5,82,80 3/-. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD, IN FA CT, DISALLOWED THE INTEREST AND RECTIFICATION ORDER U/S.154 OF THE ACT WAS PASSED BY THE AO AND REST OF THE DISALLOWANCE WAS DELETED BY THE TRI BUNAL VIDE ORDER DATED 12/08/2011 IN ITA NO.3496/AHD/2008 (SUPRA). THES E FACTS ARE NOT CONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL, THEREFORE WE HEREBY DIRECT THE AO TO DELETE THE PENALTY LEVIE D ON AN AMOUNT OF RS.2,38,533/-. IN RESPECT OF DISALLOWANCE OF DEPR ECIATION AND DEDUCTION OF RS.2,32,001/-, THE BASIS OF DISALLOWANCE WAS ON THAT THE ASSESSEE CLAIMED DEDUCTION U/S.80IB OF THE ACT IN THE EARLIE R YEARS WAS FOUND TO HAVE BEEN WORKED OUT WITHOUT CLAIMING DEPRECIATION. THE AO FOUND THAT THIS POSITION WAS NOT IN ACCORDANCE WITH LAW AND, T HEREFORE HE DISALLOWED ITA NO.2006/AHD /2011 ALIDHARA TEXPRO ENGINEERS P.LTD. VS. DY.CIT ASST.YEAR 2005-06 - 7 - THE DEDUCTION U/S.80IB OF THE ACT AND ADDED BACK IN THE INCOME OF THE ASSESSEE ON ACCOUNT OF EXCESS/WRONG CLAIM OF DEDUCT ION U/S.80IB OF THE ACT. THE CONTENTION OF THE ASSESSEE IS THAT THE ASS ESSEE CLAIMED DEDUCTION U/S.80IB OF THE ACT AFTER CLAIMING THE DEPRECIATION DURING THE YEAR UNDER CONSIDERATION AS CAN BE PERUSED FROM THE WORKING OF DEDUCTION U/S.80IB OF THE ACT. HE DREW OUR ATTENTION TOWARDS PAGE NO. 6 OF THE PAPER-BOOK. IN WHICH THE WORKING OF DEDUCTION U/S.80IB IS GIVEN . AS PER THIS WORKING, WE FIND THAT THE ASSESSEE HAS CLAIMED DEPR ECIATION. THE ASSESSEE HAS ALSO PLACED RELIANCE ON THE DECISION O F HONBLE SUPREME COURT RENDERED IN THE CASE OF CIT VS. RELIANCE PETR OPRODUCTS PVT.LTD. REPORTED AT 322 ITR 158(SC) TO BUTTRESS THE CONTENT ION THAT THE ASSESSEE HAD NOT FILED ANY INACCURATE PARTICULARS OF INCOME SINCE THE ASSESSEE HAD HIMSELF CLAIMED DEPRECIATION DURING THE YEAR UNDER CONSIDERATION. 5.1. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE IN VIEW OF THE FACT THAT THE ASSESSEE, IN FACT, HAS CLAIMED DEPRECIATION DURING THE YEAR UNDER CONSIDER ATION. THE REVENUE HAS NOT CONTROVERTED THE SAME, THEREFORE FOLLOWING THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT RENDERED IN THE CASE OF C IT VS. RELIANCE PETROPRODUCTS PVT.LTD.(SUPRA), WE ARE OF THE CONSID ERED VIEW THAT THE LD.CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE PENAL TY ON THIS ISSUE, THEREFORE THE AO IS HEREBY DIRECTED TO DELETE THE P ENALTY LEVIED ON ADDITION OF RS.2,32,001/-. ITA NO.2006/AHD /2011 ALIDHARA TEXPRO ENGINEERS P.LTD. VS. DY.CIT ASST.YEAR 2005-06 - 8 - 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 9 TH OF JANUARY, 2015 AT AHMEDABAD. SD/- SD/- ( ) ( ) ( ANIL CHATURVEDI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 09/ 01 /2015 2..,.../ T.C. NAIR, SR. PS !'#$%&' &$ / COPY OF THE ORDER FORWARDED TO : 1. '% / THE APPELLANT 2. &''% / THE RESPONDENT. 3. 345 6 / CONCERNED CIT 4. 6 ( ) / THE CIT(A)-I, SURAT 5. 78& 45 , 45. , 3 / DR, ITAT, AHMEDABAD 6. 8:;<* / GUARD FILE. ! / BY ORDER, '7 & //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION ..7.1.15 (DICTATION-PAD 17- PAG ES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 8.1.15 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.9.1.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 9.1.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER