Smt. D.Anuradha, CHENNAI V. ACIT, CHENNAI

ITA 226/CHNY/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5122 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-05-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 26-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Assessee Lawyers: DR ANITA SUMANTH
• Keywords: Wrong claim
• Section: 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH B CHENNAI (BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT AND SHRI GEORGE MATHAN, JUDICIAL MEMBER) .. I.T.A. NO. 226/MDS/2010 ASSESSMENT YEAR : 2000-01 SMT. D. ANURADHA, NEW NO.5, OLD NO.2, IV STREET, VENKATESWARA NAGAR, ADAYAR, CHENNAI 600 020. PAN : AFPPA7362B (APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE II(2), CHENNAI 600 034. (RESPONDENT) APPELLANT BY : DR. ANITA SUMANTH RESPONDENT BY : SHRI P.B. S EKARAN O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, CHENNAI, I N APPEAL NO.265/06-07 DATED 26.11.2009 FOR THE ASSESSMENT YE AR 2000-01. 2. DR. ANITA SUMANTH, ADVOCATE, REPRESENTED ON BEHA LF OF THE ASSESSEE AND SHRI P.B. SEKARAN, CIT D.R. REPRESEN TED ON BEHALF OF THE REVENUE. I.T.A. NO. 226/MDS/10 2 3. IT WAS SUBMITTED BY THE LEARNED A.R. THAT THE AS SESSEE IS AN EXPORTER OF DIMENSIONAL GRANITES. IT WAS A SUBMISS ION THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. HAD VERI FIED THE EXPORT INVOICES WHEREIN SOME OF THE INVOICES SHOWED ROUGH BLOCKS INSTEAD OF DIMENSIONAL BLOCKS. HE HAD RESTRICTED THE CLAIM OF DEDUCTION UNDER SECTION 80HHC OF INCOME-TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) FOR THE DIMENSIONAL BLOCKS EXPORTED. IT WAS SUBMIT TED BY THE LEARNED A.R. THAT THE INVOICES EVEN THOUGH MENTIONED ROUGH BLOCKS, CLEARLY SPECIFIED THE COLOUR AS ALSO DIMENSIONS OF THE GRAN ITES EXPORTED. IT WAS A SUBMISSION THAT IN THE FIRST APPEAL BEFORE TH E CIT(APPEALS), THE LD. CIT(APPEALS) HAD ACCEPTED THE CONTENTION OF THE ASSESSEE AND HAD HELD THAT ASSESSEE WAS ENTITLED FOR DEDUCTION U NDER SECTION 80HHC OF THE ACT ON THE EXPORT OF ROUGH GRANITE BLO CKS AS MENTIONED IN THE INVOICES. IT WAS A FURTHER SUBMISSION THAT ON APPEAL BY THE REVENUE AGAINST AN ORDER OF THE CIT(APPEALS), THE T RIBUNAL HAD REVISED THE ORDER OF THE CIT(APPEALS) VIDE ITS ORDE R IN I.T.A. NO. 1650/MDS/04 DATED 31.3.06. IT WAS SUBMITTED BY THE LEARNED A.R. THAT THE ASSESSEE HAS FILED APPEAL UNDER SECTION 26 0A OF THE ACT BEFORE THE HON'BLE HIGH COURT. IT WAS A SUBMISSION THAT ON ACCOUNT OF THE REVERSAL OF THE ORDER OF THE CIT(APPEALS) BY THE TRIBUNAL, THE I.T.A. NO. 226/MDS/10 3 A.O. HAD LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. IT WAS A SUBMISSION THAT BEFORE THE A.O., IT WAS SUBMITTED T HAT THERE WAS NO CONCEALMENT OF INCOME OR ANY INFORMATION AT ANY STA GE. IT WAS A SUBMISSION THAT THE FACT THAT THE LD. CIT(APPEALS) HAD ACCEPTED THAT THE CONTENTION OF THE ASSESSEE THAT THE INVOICES SH OWING THE ROUGH GRANITE BLOCKS DID SPECIFY THE DIMENSIONAL BLOCKS A S ALSO THE COLOUR AND QUALITY AND IT WAS ONLY ON ACCOUNT OF THE INTER PRETATION OF THE LAW AS ALSO INTERPRETATION OF THE INVOICES THAT HAD LED TO REJECTION IN THE CLAIM OF DEDUCTION UNDER SECTION 80HHC OF THE ACT. IT WAS A SUBMISSION THAT THE ADDITION WAS ONLY ON ACCOUNT OF THE LEGAL CONTENTION WHETHER THE ITEM EXPORTED WAS COVERED BY CIRCULAR NO.749 OR NOT. IT WAS A SUBMISSION THAT THERE WAS NO CONCEALMENT NOR MALAFIDE INTENTION ON THE PART OF THE ASSESSEE. IT WAS A FURTHER SUBMISSION THAT THE LD. CIT(APPEALS) HAD RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF UNION OF INDIA V. DHARMENDRA TEXTILE PROCESSORS (2008) 306 ITR 277 (SC) FOR THE PURPOSE OF CONFIRMING THE LEVY OF PENALTY. IT WAS SUBMITTED T HAT THE PENALTY CONFIRMED BY THE LD. CIT(APPEALS) IS LIABLE TO BE D ELETED. 4. IN REPLY, THE LEARNED D.R. SUBMITTED THAT IT WAS ONLY IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. HAD NOTE D THE INVOICES I.T.A. NO. 226/MDS/10 4 AND IT CLEARLY SHOWED ROUGH BLOCKS AS AGAINST DIMEN SIONAL BLOCKS IN CERTAIN INVOICES. IT WAS SUBMITTED THAT WHERE INVO ICES SHOWED DIMENSIONAL BLOCKS, THE A.O. HAD GRANTED THE DEDUCT ION UNDER SECTION 80HHC OF THE ACT AND IT WAS ONLY IN THE CAS E OF ROUGH BLOCKS, THE DEDUCTION UNDER SECTION 80HHC WAS DENIED. IT W AS SUBMITTED THAT THE ORDER OF THE TRIBUNAL ALSO CLEARLY SHOWED THAT IT WAS ROUGH BLOCKS WHICH WERE EXPORTED AND CONSEQUENTLY THE DED UCTION UNDER SECTION 80HHC OF THE ACT WAS NOT LIABLE TO BE ALLOW ED TO THE ASSESSEE. IT WAS A SUBMISSION THAT IF THE INVOICES WERE NOT VERIFIED IN THE COURSE OF ASSESSMENT, THE ASSESSEE WOULD HAVE G OT AWAY WITH WRONG CLAIM OF DEDUCTION UNDER SECTION 80HHC OF THE ACT. IT WAS SUBMITTED THAT THE PENALTY AS LEVIED BY THE A.O. AN D CONFIRMED BY THE LD. CIT(APPEALS) DESERVES TO BE CONFIRMED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF PROVISIONS OF SECTION 271(1)(C) OF THE ACT CLEARLY SHOWS THAT THERE SHOULD BE CONCEALMENT OF PARTICULARS OF ASSESSEES INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME . EXPLANATION 1 THERETO SHOWS THAT IF THE ASSESSEE OFFERS AN EXPLAN ATION AND SUCH EXPLANATION HAS BEEN FOUND BY THE A.O. OR THE CIT(A PPEALS) OR COMMISSIONER TO BE FALSE OR IF AN ASSESSEE OFFERS A N EXPLANATION I.T.A. NO. 226/MDS/10 5 WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO P ROVE SUCH EXPLANATION AS BONAFIDE, THEN THE AMOUNT ADDED OR D ISALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON SHALL BE TREATED AS UNDISCLOSED INCOME. IN THE PRESENT CASE, WHAT IS N OTED IS THAT THE ASSESSEE HAS PRODUCED ALL THE DETAILS IN SUPPORT OF HER CLAIM FOR DEDUCTION UNDER SECTION 80HHC OF THE ACT. ALL THE INVOICES HAVE ALSO BEEN PRODUCED BEFORE THE A.O. SOME OF THE INV OICES SHOW ROUGH BLOCKS WHILE SOME OF INVOICES SHOW DIMENSIONA L BLOCKS. IN ANY CASE, ALL THE INVOICES CLEARLY SHOW THE DIMENSIONS OF THE GRANITE BLOCKS EXPORTED, I.E. THE LENGTH, BREADTH AND HEIGH T AND THE COLOUR OF THE GRANITE BLOCKS. TRUE, THE INVOICES SHOULD SHOW THE DESCRIPTION OF THE GOODS EXPORTED. WHAT HAS BEEN SHOWN IN THE INV OICES ARE ALSO GRANITE BLOCKS. THE POINT OF DISPUTE IS ON ACCOUNT OF ROUGH IN SOME INVOICES IN REGARD TO WHICH DEDUCTION UNDER SECTION 80HHC HAS BEEN DENIED AND THE WORD DIMENSIONAL IN SOME INVOICES IN REGARD TO WHICH DEDUCTION UNDER SECTION 80HHC OF THE ACT HAS BEEN ALLOWED. NOMENCLATURE BY ITSELF DOES NOT DETERMINE AS TO WHE THER THE ITEM FALLS WITHIN THE CRITERIA SPECIFIED IN THE CIRCULAR NO.749. EVEN ASSUMING THAT WHAT IS EXPORTED IS ROUGH GRANITES, S TILL THE DIMENSIONS OF THE GRANITE BLOCKS AS ALSO THE COLOUR IS CATEGOR ICALLY SHOWN. THE I.T.A. NO. 226/MDS/10 6 ONLY DIFFERENCE BETWEEN THE TWO INVOICES BEING THE WORDS ROUGH AND DIMENSIONAL. THESE TWO TERMS BY THEMSELVES WOULD NOT BE ABLE TO SHOW THE MALAFIDE INTENTION OF THE ASSESSEE. IN FA CT, THE ASSESSEE HAS GIVEN CERTIFICATE FROM THE SUPPLIERS OF THE GRA NITE BLOCKS THAT THEY HAVE UNDERGONE VALUE ADDITIONS AS CONTEMPLATED IN B OARDS CIRCULAR NO.749 AND THIS FACT REMAINS UNDISPUTED. IN THE CI RCUMSTANCES, IT CANNOT BE SAID THAT THE DENIAL OF CLAIM OF DEDUCTIO N UNDER SECTION 80HHC OF THE ACT HAS LED TO ANY CONCEALMENT OF PART ICULARS OF THE ASSESSEES INCOME OR FURNISHING OF INACCURATE PARTI CULARS OF THE ASSESSEES INCOME. THE DISALLOWANCE, IF ANY, HAS B EEN MADE ONLY ON ACCOUNT OF THE INTERPRETATION OF THE WORDS DIME NSIONAL AND ROUGH AS FOUND IN THE INVOICES, WHEREAS, ALL THE INVOICES CATEGORICALLY SHOW THE DIMENSIONAL DETAILS OF THE G RANITES EXPORTED. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE D ISALLOWANCE OF DEDUCTION UNDER SECTION 80HHC IN REGARD TO THE ROUG H GRANITE BLOCKS DOES NOT FALL WITHIN THE PURVIEW OF SECTION 271(1)( C) OF THE ACT ON THE FACTS OF THE PRESENT CASE. THEREFORE, WE ARE OF TH E CONSIDERED VIEW THAT THE PENALTY LEVIED BY THE A.O. AND CONFIRMED B Y THE CIT(APPEALS) IS LIABLE TO BE DELETED AND WE DO SO. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. I.T.A. NO. 226/MDS/10 7 ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON THE FOURTH DAY OF MAY, 2011. SD/- SD/- (DR. O.K. NARAYANAN) ( GEORGE MATHAN) VICE PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 4 TH MAY, 2011. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-II, CHENNAI-34 (4) CIT, CENTRAL-II, CHENNAI (5) D.R. (6) GUARD FILE