M/s. Craftsman Automation (P) Ltd, CHENNAI V. Additional CIT, CHENNAI

ITA 2191/CHNY/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90308 (ITAT-CHENNAI)
• Duration Of Justice: 4 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-02-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 28-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: S SRIDHAR
• Keywords: Wrong claim
• Section: 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI .. , ! ' # , $ %& BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ! ./ ITA NO.2191/MDS/2010 $ ' (' / ASSESSMENT YEAR : 2006-07 M/S CRAFTSMAN AUTOMATION (P) LTD., 15, LML COLONY, AMMANKULAM ROAD, COIMBATORE 641 037. PAN : AABCC 2461 K V. THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE IV, COIMBATORE. (#*/ APPELLANT) (,-#*/ RESPONDENT) #* . / / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE ,-#* . / / RESPONDENT BY : SHRI P. RADHAKRISHNAN, JCIT 0 . 1 / DATE OF HEARING : 03.02.2015 23( . 1 / DATE OF PRONOUNCEMENT : 17.04.2015 / O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINS T THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, COIM BATORE, DATED 29.11.2010 CONFIRMING PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2 I.T.A. NO.2191/MDS/2010 2. THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND IS ENGAGED IN THE MANUFACTURING OF LIGHT ENGINEERING COMPONENTS A ND SUB ASSEMBLIES. THE ASSESSEE FILED ITS RETURN OF INCOM E FOR THE ASSESSMENT YEAR 2006-07 DECLARING TOTAL TAXABLE INC OME OF ` 8,09,53,300/-. THE ASSESSEE IN ITS RETURN OF INCOME CLAIMED DEDUCTION OF ` 90,06,429/- UNDER SECTION 80JJAA OF THE ACT. THE ASSESSING OFFICER DURING THE COURSE OF SCRUTINY ASS ESSMENT, REWORKED THE DEDUCTION AND RESTRICTED IT TO ` 73,55,831/-. SUBSEQUENTLY, THE ASSESSING OFFICER VIDE ORDER DATE D 30.03.2009 PASSED UNDER SECTION 154 OF THE ACT, REJECTED THE E NTIRE CLAIM OF THE ASSESSEE UNDER SECTION 80JJAA OF THE ACT. THE MATT ER TRAVELLED UPTO TRIBUNAL. THE TRIBUNAL IN THE APPEAL OF THE A SSESSEE IN I.T.A. NO.1357/MDS/2010 FOR ASSESSMENT YEAR 2006-07 WHICH WAS DECIDED ON 17.03.2014, UPHELD THE FINDINGS OF THE A SSESSING OFFICER. PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF TH E ACT WERE INITIATED AGAINST THE ASSESSEE FOR WRONG CLAIM OF D EDUCTION UNDER SECTION 80JJAA OF THE ACT. THE ACIT VIDE ORDER DAT ED 31.03.2009 IMPOSED PENALTY OF ` 27,01,926/-. 3 I.T.A. NO.2191/MDS/2010 3. AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE PRE FERRED AN APPEAL BEFORE THE CIT(APPEALS). THE CIT(APPEALS), VIDE IMPUGNED ORDER, CONFIRMED THE LEVY OF PENALTY. NOW THE ASSESSEE HAS COME IN SECOND APPEAL BEFORE THE TRIBUNAL ASSAILING THE FINDINGS OF THE FIRST APPELL ATE AUTHORITY. 4. SHRI S. SRIDHAR, ADVOCATE, APPEARING ON BEHALF O F THE ASSESSEE, SUBMITTED THAT THE CLAIM UNDER SECTION 80 JJAA OF THE ACT WAS MADE IN A BONA FIDE MANNER. THERE WAS NO FURNI SHING OF INACCURATE PARTICULARS OR MISREPRESENTATION OF FACT S. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT IS A WELL SETTLE D LAW THAT IN CASE A WRONG CLAIM HAS BEEN MADE, THE REVENUE AUTHORITIES CAN REJECT THE CLAIM OF THE ASSESSEE, BUT, IT IS NOT A GROUND FOR LEVY OF PENALTY. TO SUPPORT HIS SUBMISSION, THE LD. COUNSEL PLACED RELI ANCE ON THE DECISION OF HON'BLE SUPREME COURT OF INDIA IN THE C ASE OF CIT V. RELIANCE PETROPRODUCTS PVT. LTD. REPORTED AS 322 IT R 158, THE DECISION OF HON'BLE MADRAS HIGH COURT IN THE CASE O F CIT V. CHOLAMANDALAM INVESTMENT & FINANCE CO. LTD. REPORTE D AS 364 ITR 680 AND THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF NEW HOLLAND TRACTORS (INDIA) PVT. LTD. V. CIT REPORTED AS 228 TAXMAN 66. 4 I.T.A. NO.2191/MDS/2010 5. ON THE OTHER HAND, SHRI P. RADHAKRISHNAN, JCIT, REPRESENTING THE DEPARTMENT, VEHEMENTLY DEFENDED TH E IMPUGNED ORDER. THE LD. D.R. SUBMITTED THAT IT WAS A DELIBE RATE ATTEMPT ON THE PART OF THE ASSESSEE TO MAKE A WRONG CLAIM BY F URNISHING INACCURATE PARTICULARS. THEN ASSESSEE CLAIMED DEDU CTION ON THE GROUND THAT THERE WERE 376 NEW REGULAR WORKMEN. DU RING THE COURSE OF SURVEY, IT WAS FOUND THAT THERE WERE ONLY 171 NEW REGULAR WORKMEN AND AMONG THEM, ONLY 8 NEW REGULAR WORKMEN HAD WORKED FOR MORE THAN 300 DAYS. IN THE BACKDROP OF THESE FACTS, THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 80J JAA WAS WITHDRAWN AND PENALTY IS LEVIED. 6. WE HAVE HEARD SUBMISSIONS MADE BY REPRESENTATIVE S OF BOTH SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHO RITIES BELOW. WE HAVE ALSO EXAMINED THE DECISIONS ON WHICH THE LD .COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE. THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80JJAA ON THE BASIS THAT THERE WERE 376 NEW REGULAR WORKME N, WHEREAS, THERE WERE ONLY 171 NEW REGULAR WORKMEN, THEREFORE THE CLAIM OF DEDUCTION U/S 80JJAA WAS WITHDRAWN. THE PENALTY UN DER SECTION 271(1)(C) OF THE ACT, IS LEVIED WHERE THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR HAS FURNISHED INACCURA TE PARTICULARS OF 5 I.T.A. NO.2191/MDS/2010 INCOME. IN THE PRESENT CASE, THE PENALTY HAS BEEN LEVIED ONLY ON THE GROUND THAT A WRONG CLAIM HAS BEEN MADE. THE A SSESSEE MADE CLAIM U/S 80JJAA IN A BONAFIDE MANNER. THE REVENUE AUTHORITIES AFTER EXAMINING THE DETAILS FURNISHED BY THE ASSESS EE HAS REJECTED THE SAME. 7. THE HON'BLE SUPREME COURT OF INDIA IN THE CASE O F RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA) HAS HELD THAT BY NO STRETCH OF IMAGINATION, MAKING AN INCORRECT CLAIM TANTAMOUNT T O FURNISHING OF INACCURATE PARTICULARS. A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO F URNISHING OF INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISH ING OF INACCURATE PARTICULARS. 8. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND T HE LAW LAID DOWN BY THE HON'BLE APEX COURT, WE ARE OF THE VIEW THAT IN THE PRESENT CASE REJECTION OF CLAIM WOULD NOT RESULT IN LEVY OF PENALTY. ACCORDINGLY, THE IMPUGNED ORDER IS SET ASIDE AND TH E APPEAL OF THE ASSESSEE IS ALLOWED. 6 I.T.A. NO.2191/MDS/2010 ORDER PRONOUNCED ON THE 17 TH OF MARCH, 2015 AT CHENNAI. SD/- SD/- ( .. ) ( ' # ) (B.R. BASKARAN) (VIKAS AWASTHY) / ACCOUNTANT MEMBER $ /JUDICIAL MEMBER /CHENNAI, C! /DATED, THE 17 TH APRIL, 2015. KRI. D . ,$1E' F'(1 /COPY TO: 1. #* /APPELLANT 2. ,-#* /RESPONDENT 3. 0 G1 /CIT-II, COIMBATORE 4. 0 G1 () /CIT(A)-I, COIMBATORE 5. ' HI ,$1$ /DR 6. IJ' K /GF.