The ACIT, Central Circle-5, RAJKOT-GUJARAT V. M/s. Orbit Bearing India P. Ltd., RAJKOT-GUJARAT

ITA 225/RJT/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1096 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 25-05-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 02-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: MJ RANPURA
• Section: 80HHC; 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER ./ ITA NO.225, 226 AND 227/RJT/2014 / ASSTT. YEAR: 2003-04, 2004-05 AND 2005-06 ACIT, CIR.5 RAJKOT. VS M/S.ORBIT BEARING INDIA P. LTD. PLOT NO.2313, GIDC, KALAWAD ROAD METODA, RAJKOT. / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI AVINASH KUMAR, AR ASSESSEE BY : SHRI M.J. RANPURA / DATE OF HEARING : 25/05/2015 / DATE OF PRONOUNCEMENT: 29/05/2015 / O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER: THESE ARE THREE APPEALS FILED BY THE REVENUE AGAINST ORDERS OF THE CIT(A), JAMNAGAR DATED 24.1.2014 FOR ASSTT.YEAR 2003-04, 2004-05 AND 2005- 06. THESE APPEALS ARE DISPOSED OF BY THIS CONSOLIDATED ORDER. 2. SOLE GROUND INVOLVED IN THESE APPEALS IS THAT TH E CIT(A) ERRED IN DELETING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT OF RS.5,21,147/- FOR THE ASSTT.YEAR 2003-04, RS.6,72,5 59/- FOR THE ASSTT.YEAR 2004-05 AND RS.4,59,190/- FOR THE ASSTT. YEAR 2005-06. 3. BRIEF FACTS OF THE CASE ARE THAT THE DISALLOWANC E FOR DEDUCTION UNDER SECTION 80IB WAS MADE IN THE ASSTT.YEAR 2005- 06 FOR RS.12,79,972/-, IN THE ASSTT.YEAR 2004-05 RS.63,000 /- AND IN THE ASSTT.YEAR 2003-04 OF RS.14,18,086/-. FURTHER, DIS ALLOWANCE UNDER SECTION 80HHC WAS ALSO MADE FOR RS.17,10,004/- IN T HE ASSTT.YEAR 2004-05. FURTHER, DISALLOWANCE OUT OF POSTAGE, TEL EPHONE, TELEGRAM AND TRAVELLING EXPENSES OF RS.1,01,725/- WAS MADE I N THE ASSTT.YEAR ITA NO.225/RJT/2014 (3 APPEALS) 2 2004-05. IN THIS WAY, TOTAL DISALLOWANCE OF RS.12, 79,972/- MADE IN THE ASSTT.YEAR 2005-06, RS.18,74,729/- IN THE ASSTT.YEA R 2004-05 AND IN THE ASSTT.YEAR 2003-04 OF RS.5,21,147/-. THE DISAL LOWANCE MADE WAS CONFIRMED BY THE TRIBUNAL VIDE ORDER DATED 31.12.20 10 PASSED IN ITA NOS.46 TO 49/RJT/2009. THEREAFTER, THE AO LEVIED P ENALTY ON THE GROUND OF CONCEALMENT OF INCOME UNDER SECTION 271(1 )(C) OF THE ACT FOR THE YEARS UNDER CONSIDERATION. 4. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT M ERE DISALLOWANCE OF CLAIM MADE BY THE ASSESSEE UNDER SECTION 80HHC, 80IB UNDER BONA FIDE BELIEF AND DISALLOWANCE OF POSTAGE, TELEPHONE, TELEGRAM AND TRAVELLING EXPENSES MADE ON ESTIMATE FOR PERSONAL U SE, NO PENALTY WAS NOT LEVIABLE ON THE ASSESSEE, AND RELIED ON THE DEC ISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS P. LTD., (2010) 230 CTR 320. 5. THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE BY OBSERVING AS UNDER: 3. I HAVE CONSIDERED CAREFULLY, THE SUBMISSIONS MA DE BY THE APPELLANT AND THE DISCUSSION MADE IN THE PENALTY OR DERS PASSED IN RESPECT OF THE IMPUGNED ASSESSMENTS FOR A.Y. 2005-0 6, A.Y. 2004-05 AND AY. 2003-04 BY THE ASSESSING OFFICER. A PART FROM THE ABOVE FACTS, THE APPELLANT HAS CITED THE JUDGEMENT OF APEX COURT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS (P) L TD. (2010 230 CTR (SC) 320 TO SAY THAT THE PENALTY U/S. 271(L)(C) IS NOT LEVIABLE IN RESPECT OF CLAIMS DISALLOWED BY THE REVENUE. IT CAN BE SEEN THAT THE APPELLANT HAS CLAIMED DEDUCTIONS U/S. 80IB / 80 HHC WRONGLY BASED ON CERTAIN JUDICIAL PRONOUNCEMENTS WHICH HAVE BEEN OVER RULED SUBSEQUENTLY. THE RATIO OF THE APEX COURT IN THIS CASE IS AS UNDER:- 'AS THE ASSESSEE HAD FURNISHED ALL THE DETAILS OF I TS EXPENDITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, IN THEMSELVES, WERE NOT FOUND TO BE INACCURATE NOR COU LD BE VIEWED AS THE CONCEALMENT OF INCOME ON ITS PART. IT WAS UP TO THE AUTHORITIES TO ACCEPT IS CLAIM IN THE RETURN OR NOT. MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDI TURE, WHICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE ITA NO.225/RJT/2014 (3 APPEALS) 3 REVENUE THAT BY ITSELF WOULD NOT, IN OUR OPINION. A TTRACT THE PENALTY UNDER S. 271 (1)(C). IF WE ACCEPT THE CONTE NTION OF THE REVENUE THEN IN CASE OF EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCEPTED BY AO FOR ANY REASON, THE ASSE SSEE WILL INVITE PENALTY UNDER S. 271 (I)(C). THAT IS CL EARLY NOT THE INTENDMENT OF THE LEGISLATURE. 4. HENCE, THE CLAIM MADE UNDER SECTION 80IB/80HHC BY T HE APPELLANT FOR THE THREE ASSESSMENT YEARS UNDER CONS IDERATION DO NOT CONSTITUTES INCOME CONCEALED. THEREFORE, RESPE CTFULLY FOLLOWING THE JUDGMENTS CITED BY THE APPELLANT, I A M OF THE VIEW THAT THERE IS NO CASE OF LEVY OF PENALTY U/S.271(1) (C) OF THE IT ACT, 1961 FOR THE THREE ASSESSMENT YEARS UNDER REFE RENCE. ACCORDINGLY, THE PENALTIES LEVIED FOR THE AYS. 2005 -06, 2004-05 AND 2003-04 STANDS DELETED. 6. THE DR HAS RELIED ON THE ORDER OF THE AO. NO SP ECIFIC ERROR IN THE ABOVE QUOTED ORDER OF THE CIT(A) COULD BE POINTED O UT BY THE DR. 8. WE FIND THAT IN THE INSTANT CASE, THE ASSESSEE H AD CLAIMED DEDUCTION UNDER SECTION 80IB AND 80HHC BASED ON THE JUDICIAL DECISIONS, WHICH WERE IN FAVOUR OF THE ASSESSEE AT THE TIME OF FILING OF RETURN OF INCOME. SUBSEQUENTLY, THESE DECISIONS W ERE OVERRULED AND THE ISSUES WERE DECIDED AGAINST THE ASSESSEE. THUS , THE ISSUE BEING DEBATABLE ONE IT CANNOT BE SAID THAT THE ASSESSEE H AD FURNISHED INACCURATE PARTICULARS OF INCOME IN THE RETURN OF I NCOME FILED BY IT. THEREFORE, WE FIND NO ERROR IN THE ORDER OF THE CIT (A), WHICH IS HEREBY CONFIRMED AND THE GROUNDS OF APPEALS OF THE REVENUE ARE DISMISSED. 9. IN THE RESULT, ALL THREE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY THE 29 TH MAY, 2015 AT RAJKOT. SD/- SD/- ( SHAILENDRA KUMAR YADAV ) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 29/5/2015