EXCEL BEARINGS P.LTD, MUMBAI V. ITO WD 6(2)(3) ( NOW ITO WD 3(1)(3), MUMBAI

ITA 2023/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2446 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2003-2004
• Appeal Filed On: 08-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C W ANGOLKAR
• Assessee Lawyers: KEYURI Y DESAI
• Keywords: Revised return
• Section: 143(3); 80HHC; 80IB; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH J, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AN D SHRI SANJAY GARG, JUDICIAL MEMBER ITA NOS.2022 & 2023/M/2015 ASSESSMENT YEARS: 2001-02 & 2003-04 M/S. EXCEL BEARINGS PVT. LTD., 401, DOLLY CHAMBERS, STRAND ROAD, COLABA, MUMBAI 400 005 PAN: AAACE3445N VS. INCOME TAX OFFICER, WD.6(2)(3), [NOW ITO, WARD 3(1)(3), MUMBAI] AAYAKAR BHAVAN, M.K. MARG, MUMBAI - 400020 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : MS. KEYURI Y. DESAI, A.R. REVENUE BY : SHRI C.W. ANGOLKAR, D.R. DATE OF HEARING : 20.07.2016 DATE OF PRONOUNCEMENT : 22.07.2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE ABOVE TITLED TWO APPEALS HAVE BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDERS BOTH DATED 24.02.2015 OF THE COMMISSIONE R OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO ASSESSMENT YEARS 2001-02 & 2003-04, AGITATING THE LEVY OF PENALTY IN BOTH THE APPEALS UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT. SINCE THE FACTS AND ISSUES INVOLVED IN BOTH THE APPEALS ARE IDENTICAL, HENCE, THEY ARE TAKEN TOGETHER AND ARE BEING DISPOSED OF WITH THIS COMMON ORDER. FOR THE SAKE O F CONVENIENCE, FACTS HAVE BEEN TAKEN FROM ITA NO.2022/M/2015 FOR A.Y. 2001-02 . ITA NO.2022/M/2015 FOR A.Y. 2001-02 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE HAD FIL ED ITS RETURN OF INCOME OF RS.9,02,124/- AND CLAIMED THE DEDUCTION UNDER SECTI ON 80HHC & 80I OF RS.33,90,542/- AND RS.11,53,613/- RESPECTIVELY. TH E ASSESSEE HAD SUBMITTED ITA NOS.2022 & 2023/M/2015 M/S. EXCEL BEARINGS PVT. LTD. 2 ITS REVISED RETURN ON 31.10.2001 CLAIMING DEDUCTION UNDER SECTION 80HHC OF RS.27,12,434/-. THE ASSESSMENT WAS COMPLETED ON 25 .07.2003 UNDER SECTION 143(3) OF THE ACT, AND DETERMINED THE TOTAL INCOME OF RS.11,32,520/-. 3. THE LD. CIT(A) DELETED MOST OF THE ADDITIONS MAD E BY THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO). HOWEV ER, SUSTAINED PART OF THE ADDITION MADE ON DISALLOWANCE OF DEDUCTION UNDER SE CTION 80IB. THE REVENUE WENT IN APPEAL BEFORE THE ITAT AGAINST THE DECISION OF THE LD. CIT(A). 4. THE ITAT RESTORED THE MATTER TO THE FILE OF THE AO. ACCORDINGLY THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF TH E ACT READ WITH SECTION 147 & 254 OF THE ACT DETERMINING THE TOTAL INCOME A T RS.9,16,090/-. AGAINST THE SAID ORDER THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAD GIVEN NO MORE RELIEF TO THE ASSESSEE. HO WEVER, THE ASSESSEE WENT IN APPEAL BEFORE THE ITAT. THE ITAT VIDE ORDER DAT ED 31.03.11 CONFIRMED THE ORDER OF CIT(A) IN RESPECT OF DEDUCTION UNDER SECTI ON 80IB OF THE ACT. ACCORDINGLY, ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) READ WITH SECTION 254 OF THE ACT, DATED 09.11.2012 DETERMINED THE TOT AL INCOME OF RS.1,74,905/- AFTER ALLOWING THE DEDUCTION UNDER SECTION 80IB OF RS.8,64,953/- AS AGAINST THE CLAIM BY ASSESSEE IN ORIGINAL RETURN OF INCOME AMOU NTING TO RS.11,32,520/- AND ACCORDINGLY PENALTY UNDER SECTION 271(1)(C) WAS INI TIATED. IN PENALTY PROCEEDINGS, THE AO OBSERVED THAT THE A SSESSEE HAD INCLUDED THE AMOUNT OF RS.10,91,133/- BY WAY OF SALE OF DEPB LICENSE FOR THE PURPOSE OF DEDUCTION UNDER SECTION 80IB OF THE ACT. HE WAS OF THE VIEW THAT THE ASSESSEE FILED INACCURATE PARTICULARS OF INCOME UND ER SECTION 80IB AND THE ASSESSEES CLAIM WAS DISALLOWED TO THE EXTENT OF RS .2,88,660/-. HE, THEREFORE, HELD THAT THE ASSESSEE HAD INACCURATELY CALCULATED THE CLAIM OF DEDUCTION UNDER SECTION 80IB. HE ACCORDINGLY IMPOSED PENALTY OF RS .1,14,165/- BEING 100% OF THE TAX SOUGHT TO BE EVADED UNDER SECTION 271(1)(C) OF THE ACT. THUS, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). ITA NOS.2022 & 2023/M/2015 M/S. EXCEL BEARINGS PVT. LTD. 3 5. THE LD. CIT(A), HOWEVER, CONFIRMED THE PENALTY L EVIED BY THE AO. 6. WE HAVE HEARD THE LD. D.R. AND HAVE ALSO GONE TH ROUGH THE RECORDS. FROM THE FACTS ON THE FILE AND THE IMPUGNED ORDER O F THE LD. CIT(A) AS WELL AS OF THE AO, WE FIND THAT THE ISSUE RELATING TO THE Q UANTUM OF DEDUCTION UNDER SECTION 80IB WAS A DEBATABLE ISSUE. THE MATTER TRA VELLED TO THE TRIBUNAL TWO TIMES. THE ASSESSEE ALSO GOT RELIEF RELATING TO VA RIOUS ISSUES INCLUDING THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 80H HC OF THE ACT WHICH WAS ORIGINALLY DISALLOWED BY THE AO. EVEN CLAIM OF THE ASSESSEE UNDER SECTION 80IB HAS ALSO BEEN ALLOWED TO A LARGE EXTENT. THE ISSUE RELATING TO THE DISALLOWANCE, THUS, WAS A DEBATABLE ISSUE WHICH THE ASSESSEE AGITATED UP TO THE LEVEL OF TRIBUNAL IN TWO ROUNDS OF LITIGATION. UND ER SUCH CIRCUMSTANCES, IT CANNOT BE SAID THAT THE ASSESSEE HAD INTENTIONALLY FURNISHED ANY INACCURATE PARTICULARS OF INCOME OR HAD CONCEALED ITS INCOME. IT WAS A CASE OF CLAIM OF DEDUCTIONS UNDER THE PROVISIONS OF ACT AND THE ASSE SSEE AS OBSERVED ABOVE, HAS ALSO SUCCEEDED IN HIS CLAIM TO A LARGE EXTENT BEFOR E THE APPELLATE AUTHORITIES. MERELY BECAUSE THE ASSESSEES CLAIM TO SOME EXTENT HAS NOT BEEN ALLOWED, THAT DOES NOT MEAN THAT THE ASSESSEE HAD FURNISHED INACC URATE PARTICULARS OF INCOME OR HAD CONCEALED ITS INCOME. THE HONBLE SUPREME C OURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS (2010) 322 ITR 158 (SC ) HAS HELD THAT A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LA W, BY ITSELF, WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS REGARDING T HE INCOME OF THE ASSESSEE. UNDER SUCH CIRCUMSTANCES, NO CASE OF LEVY OF PENALT Y UNDER SECTION 271(1)(C) IS MADE OUT. 7. IN VIEW OF THIS, PENALTY LEVIED BY THE LOWER AUT HORITIES UNDER SECTION 271(1)(C) IS HEREBY DELETED. ITA NO.2023/M/2015 FOR A.Y. 2003-04 8. SINCE THE FACTS AND ISSUES INVOLVED IN THIS CASE ARE IDENTICAL TO THE ASSESSEES CASE FOR A.Y. 2001-02, HENCE, IN VIEW OF OUR FINDINGS GIVEN ABOVE ITA NOS.2022 & 2023/M/2015 M/S. EXCEL BEARINGS PVT. LTD. 4 THE PENALTY LEVIED UNDER SECTION 271(1)(C) IN THE S AID APPEAL IS ALSO HEREBY ORDERED TO BE DELETED. 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE HEREBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.07.2016. SD/- SD/- (D. KARUNAKARA RAO) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 22.07.2016. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.