The DCIT, Circle-3(1)(1), Ahmedabad V. M/s. Nabros Pharma Pvt. Ltd., Ahmedabad

ITA 2098/AHD/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9909 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2002-2003
• Appeal Filed On: 12-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 271(1)(c); 80HHC

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO. 2098/AHD/2016 ( ASSESSMENT YEAR : 2002-03) DCIT CIR. 3(1)(1), AHMEDABAD / VS. M/S. NABROS PHARMA PVT. LTD. NABROS TOWER, OPP-ART GALLERY, LAW GARDEN, ELLISBRIDGE, AHMEDABAD - 380006 ./ ./ PAN/GIR NO. : AAACN7886N ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI VINOD TANWANI, SR. DR / RESPONDENT BY : SMT. URVASHI SHODHAN, A.R. DATE OF HEARING 29/03/2019 !'# / DATE OF PRONOUNCEMENT 29/03/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF IN COME TAX (APPEALS)-9, AHMEDABAD (CIT(A) IN SHORT), DATED 2 0.06.2016 ARISING IN THE PENALTY ORDER DATED 27.03.2015 PASSED BY THE ASSESSING OFFICER (AO) UNDER S. 271(1)(C) OF THE INCOME TAX ACT, 1961 (THE ACT). ITA NO.2098/AHD/16 [DCIT VS. M/S. NABROS PHARMA PVT. LTD.] A.Y. 2002-03 - 2 - 2. THE RELEVANT GROUND OF APPEAL RAISED BY THE REVE NUE READS AS UNDER: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY OF RS.84,50,000/- LEVIED U/S. 271(1)(C) OF THE ACT ON ACCOUNT OF DISALLOWANCE OF COMMISSION EXPENSES AND DEDUCTION U/S.80HHC OF THE ACT. 3. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEAR NED AR FOR THE ASSESSEE IN REVENUES APPEAL INTERVENE AND SUBMITTE D AT THE OUTSET THAT THE PENALTY WAS IMPOSED BY THE AO ON TWO GROUN DS NAMELY (I) DISALLOWANCE OF COMMISSION EXPENSES OF RS.1,36,59,7 14/- & (II) DENIAL OF DEDUCTION TOWARDS FDRS INTEREST AMOUNTING TO RS. 99,75,974/- FOR THE PURPOSES OF COMPUTATION OF ELIGIBLE DEDUCTION U NDER S.80HHC OF THE ACT. AS REGARDS DISALLOWANCE OF COMMISSION EXP ENSES, THE LEARNED AR REFERRED TO THE DECISION OF THE CO-ORDINATE BENC H OF TRIBUNAL IN ITA NO. 1179 & 1604/AHD/2013 ORDER DATED 05.01.2017 IN RELATION TO QUANTUM PROCEEDINGS IN ITS CASE AND SUBMITTED THAT THE AFORESAID ADDITION STANDS DELETED BY THE CO-ORDINATE BENCH IN QUANTUM PROCEEDINGS AND THEREFORE THE VERY BASIS FOR IMPOSI TION OF PENALTY IS OBLITERATED. AS REGARDS INCLUSION OR OTHERWISE OF INTEREST ON FD FOR THE PURPOSES OF COMPUTATION OF DEDUCTION UNDER S.80 HHC OF THE ACT, THE LEARNED AR SUBMITTED THAT THE ISSUE HAS BEEN SE T ASIDE BY THE CO- ORDINATE BENCH TO THE FILE OF THE AO AND THEREFORE THE BASIS OF IMPOSITION OF PENALTY FOR THIS ITEM ALSO DOES NOT P RESENTLY SURVIVE. THE LEARNED AR FURTHER CANVASSED THAT DESPITE THE S ECOND ISSUE HAVING BEEN SET ASIDE TO THE FILE OF THE AO, ALL THE RELEV ANT FACTS AND PARTICULARS IN RELATION TO THE COMPUTATION OF 80HHC AND INTEREST ON FDRS WERE ADMITTEDLY PRESENT BEFORE THE LOWER AUTHO RITIES. THE ISSUE INVOLVED FOR CONSIDERATION OF FD INTEREST FOR THE P URPOSES OF 80HHC OF THE ACT IS PURELY LEGAL AS WELL AS DEBATABLE AND THEREFORE, PENALTY IN ANY CASE IS NOT EXIGIBLE FOR SUCH ADDITIONS. THE L EARNED AR ACCORDINGLY SUBMITTED THAT THE CIT(A) HAS JUSTIFIAB LY DELETED PENALTY. ITA NO.2098/AHD/16 [DCIT VS. M/S. NABROS PHARMA PVT. LTD.] A.Y. 2002-03 - 3 - 4. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON T HE ORDER OF THE AO. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN VI EW OF THE PLEA CANVASSED ON BEHALF OF THE ASSESSEE AS NOTED ABOVE IN DETAIL AND ON PERUSAL OF THE ORDER OF THE CIT(A), WE FIND NO REAS ON FOR INTERFERENCE WITH THE ORDER OF THE CIT(A), WHEREBY THE ACTION OF THE AO FOR IMPOSITION OF PENALTY ON AFORESAID ISSUE WAS REVERS ED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 29/03/2019 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 29/03/2019