QUADRICON P.LTD, MUMBAI V. ITO 7(2)(1), MUMBAI

ITA 2243/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49252 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2003-2004
• Appeal Filed On: 22-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C G K NAIR
• Assessee Lawyers: T RAVINDRA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI R.S.SYAL, AM AN D SHRI R.S.PADVEKAR, JM ITA NO.2243/MUM/2010 : ASST.YEAR 2003-2004 M/S.QUADRICON PRIVATE LIMITED A/8 FERRERA ANNEXE SITALADEVI TEMPLE ROAD MAHIM, MUMBAI 400 016. PAN : AAACP0319A. VS. THE INCOME TAX OFFICER WARD 7(2)(11) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.RAVINDRA RESPONDENT BY : SHRI C.G.K.NAIR O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-T AX (APPEALS) ON 05.12.2009 UPHOLDING PENALTY OF RS.3,98,190 IMPOSED BY THE ASS ESSING OFFICER U/S.271(1) (C) IN RELATION TO THE ASSESSMENT YEAR 2003-2004. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSE SSEE FILED RETURN DECLARING NIL INCOME AFTER CLAIMING DEDUCTION U/ S.80-IA. THE ASSESSMEN T WAS COMPLETED BY DETERMINING TOTAL INCOME AT RS.10,85,41 2 REDUCING THE AMOUNT OF DEDUCTION U/S.80- IA ON THE GROUND THAT THE ASSESSEE CLAIMED EX CESSIVE DEDUCTION OF EXPENDITURE AGAINST THE UNITS WHOSE INCOME WAS TAXABL E THEREBY ENHANCING THE INCOME OF THE UNITS IN RESPECT OF WHICH DEDUCTION U/S.80-IA WAS AVA ILABLE. PENALTY WAS ACCORDINGLY IMPOSED WHIC H CAME TO BE APPROVED IN THE FIRST APPEAL. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RE LEVANT MATERIAL ON RECORD. IT IS NOTICED THAT THE ASSESSEE S CLAIM FOR DEDUCTION U/S.80-IA HAS BEEN REDUCED ON THE GROUND THAT CERTAIN EXPENSES OUGHT TO HAVE BEEN BOOKED AGAINST THE INCOME OF THE UNIT ON WHICH DEDUCTION WAS AVAILABLE. TH E FACT REMAINS THAT THE ASSESSEE CLAIMED DEDUCTION ON THE BASIS OF THE AUDIT REPORT. WHEN IN THE OPINION OF THE AUDITOR THE AMOUNT OF DEDUCTION WAS AV AILABLE TO THAT EXTENT AT WHICH THE ITA NO.2243/MUM/2010 M/S.QUADRICON PRIVATE LIMITED. 2 ASSESSEE HAD CLAIMED DEDUCTIO N, IT CANNOT BE SAID THAT THERE WAS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICUL ARS OF INCOME SIMPLY ON THE GROUND THAT THE ASSESSING OFFICER REDUCED THE ELIGIBLE INCOME BY DIVERTING SOME EXPENDITURE TO THE ELIGIBLE UNIT. THE HON BLE DELHI HIGH COURT IN CIT VS. S.DHANABAL [(2009) 309 ITR 268 (DELHI)] HAS ORDERED FOR THE DELETION OF PENALTY U/S.271(1)(C) WHEN THE AMOUNT OF DEDUCTION U/S.80HHC CLAIMED ON THE ADVICE OF CHARTERED ACCOUNTANT, WAS REDUCED BY THE AO. SIMILAR VIEW HAS BEEN TAKE N BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN CIT VS. DEEP TOOLS (P) LTD. [(2005) 274 ITR 603 (P&H)] DELETING THE PENALTY ON THE REDUCTION IN THE AMOUNT OF DEDUCTION WHICH WAS BASED ON THE REPORT OF THE AUDITOR . 4. IT IS FURTHER NOTICED THAT THE ASSESSEE MADE THIS CLAIM BY FURNISHING FULL DETAILS OF THE EXPENSES ETC. SIMPLY FOR THE REASON THAT THE ASS ESSING OFFICER DID NOT FIND THE CLAIM OF THE ASSESSEE TO BE SUSTAINABL E IN LAW UP TO A CERTAIN EXTENT, IT CAN NOT BE A CASE FOR PENALTY U/S.271(1)(C) MORE SO WHEN THE PARTICULARS FURNISHED BY THE ASSESSEE WERE NOT INACCU RATE. THE HONBLE SUPREM E COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. [(2010) 322 ITR 158 (SC)] HAS ORDERED FOR THE DELETION OF PENALTY IN SUCH CIRCUMSTANCES. WE ARE, THEREFORE, OF THE CONSIDERED OPINION THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN UPHOLD ING THE PENALTY OF RS.3.98 LAKHS. THE SAME IS HERE BY ORDERED TO BE DELETED. 5. IN THE RESULT, TH E APPEAL IS ALLOWED. ORDER PRONOUNCED ON THIS 30 TH DAY OF JUNE, 2011. SD/- SD/- ( R.S.PADVEKAR ) ( R.S.SYAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 30 TH JUNE, 2011. DEVDAS*` ITA NO.2243/MUM/2010 M/S.QUADRICON PRIVATE LIMITED. 3 COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - XIII, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.