Shree Rama Multi-Tech Ltd., Ahmedabad V. The ACIT.,Crcle-8, Ahmedabad

ITA 2287/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94846 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 01-12-2015
• Assessment Year: 1998-1999
• Appeal Filed On: 10-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L SHARMA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD , , BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.2287/AHD/2012 ( / ASSESSMENT YEAR : 1998-99) SHREE RAMA MULTI TECH LTD. 603, SHIKHAR BLDG NAVRANGPURA AHMEDABAD / VS. THE ACIT CIRCLE-8 AHMEDABAD ' ./ ./ PAN/GIR NO. : AAABS 0322 F ( '% / APPELLANT ) .. ( &''% / RESPONDENT ) '% ( / APPELLANT BY : SHRI S.N. SOPARKAR WITH MS.UKTI PARIKH &''% ) ( / RESPONDENT BY : SHRI B.L. SHARMA, SR.DR * ) / DATE OF HEARING 01/12/2015 +,-. ) / DATE OF PRONOUNCEMENT 07/12/2015 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-XIV, AHMEDAB AD [CIT(A) IN SHORT] DATED 28/12/2005 PERTAINING TO ASSESSMEN T YEAR (AY) 1998-99. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1. LD.CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING PENALTY LEVIED ON ADDITION OF RS.1,42,06,989/- BEING THE LOSS ON ACCO UNT OF SHAM ITA NO.2287/AHD /2012 SHREE RAMA MULTI TECH LTD. VS. ACIT ASST.YEAR 1998-99 - 2 - TRANSACTIONS OF PURCHASE AND SALE OF HDPE FABRICS C OATED O BOTH SIDES. LD.CIT(A) ERRED IN NOT APPRECIATING THE FAC T THAT THE APPELLANT UTILIZED THE FABRIC PURCHASED AT THE PREV AILING MARKET RATES IN MANUFACTURING OF TARPAULIN IN SUBSEQUENT YEAR AN D ALL THE RELEVANT DETAILS WERE FURNISHED. BOTH THE LOWER AU THORITIES FAILED TO APPRECIATE THE FACT THAT THE APPELLANT NEITHER FURN ISHED INACCURATE PARTICULARS NOR CONCEALED ANY INCOME. THE PENALTY LEVIED WITHOUT ANY MERITS AND JUSTIFICATION DESERVES TO BE QUASHED . 2. THE HONBLE ITAT ALLOWED APPEAL FILED BY THE APPELL ANT CHALLENGING THE ADDITION OF RS.1,42,06,989/- IN RESPECT OF TRAN SACTION OF PURCHASE AND SALE OF HDPE FABRICS COATED ON BOTH SIDES DELET ING ADDITION VIDE ORDER DATED 21/10/2011 IN ITA # 3297/AHD/2003. NOW THAT THE ADDITION ON WHICH IMPUGNED PENALTY IS LEVIED, ORDER OF LD.CIT(A) REQUIRES TO BE QUASHED AND PENALTY BE DELETED. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, ED IT, DELETE, MODIFY OR CHANGE ALL OR ANY OF THE GROUNDS OF APPEAL AT THE T IME OF OR BEFORE THE HEARING OF THE APPEAL. 2. AT THE OUTSET, LD.COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE QUANTUM ON WHICH THE PENALTY HAS BEEN LEVIED, WAS D ELETED BY THE COORDINATE BENCH (ITAT C BENCH AHMEDABAD) OF THIS TRIBUNAL IN ITA NO.3297/AHD/2003 FOR AY 1998-99 VIDE ORDER DATE D 21/10/2011. IN SUPPORT OF THE CONTENTION, HE DREW OUR ATTENTION TO WARDS PARA-9.3 OF THE SAID TRIBUNALS ORDER. HE FURTHER SUBMITTED THAT T HE AO HAD LEVIED PENALTY ON THE ADDITION(S) IN RESPECT OF PURCHASE O F HDPE FABRICS AMOUNTING TO RS.1,42,06,989/-, INTEREST ATTRIBUTABL E TO INTEREST-BEARING BORROWINGS DIVERTED AS INTEREST-FREE ADVANCES FOR N ON-BUSINESS PURPOSEAMOUNTING TO RS.68,40,000/-, SHARE AND DEBEN TURE ISSUE EXPENSES ITA NO.2287/AHD /2012 SHREE RAMA MULTI TECH LTD. VS. ACIT ASST.YEAR 1998-99 - 3 - OF RS.54,71,612/-, INTEREST INCOME REDUCED FROM PRE -OPERATIVE EXPENSES OF RS.35,54,409/- AND EXCESS DEDUCTION OF RS.29,03, 572/- DISALLOWED U/S.80IA OF THE ACT CLAIMED. THE LD.COUNSEL FOR THE ASSESSEE POINTED OUT FROM THE IMPUGNED ORDER THAT THE PENALTY RELATED TO OTHER EXPENSES EXCEPT PURCHASE OF HDPE FABRICS WAS DELETED BY THE LD.CIT( A). HOWEVER, THE LD.CIT(A) CONFIRMED THE PENALTY ON ADDITION OF RS.1 ,42,06,989/-. HE SUBMITTED THAT IN THE QUANTUM APPEAL, THE TRIBUNAL HAD DELETED THE ADDITION VIDE ORDER DATED 21/10/2011 SUBSEQUENT TO THE PASSING OF THE IMPUGNED ORDER. FURTHER, HE SUBMITTED THAT THE REV ENUE HAD CHALLENGED THE DELETION OF ADDITION BEFORE THE HONBLE HIGH CO URT OF GUJARAT IN TAX APPEAL NO.201 OF 2012 (IN THE CASE OF CIT VS. SHRI RAMA MULTI TECH LTD.), DATED 18/12/2012 AND THE HONBLE JURISDICTIO NAL HIGH COURT HAS CONFIRMED THE FINDING OF THE TRIBUNAL. HE DREW O UR ATTENTION TOWARDS PAGE NO.2 OF THE SAID JUDGEMENT OF THE HONBLE HIG H COURT OF GUJARAT. THE LD.COUNSEL FOR THE ASSESSEE, HOWEVER, FAIRLY SU BMITTED THAT THE PRESENT APPEAL IS DELAYED BY 2379 DAYS. HOWEVER, IN VIEW O F THE FACT THAT THE QUANTUM ON WHICH PENALTY WAS LEVIED HAS BEEN DELETE D AND, THEREFORE, THE PENALTY LEVIED ON SUCH QUANTUM WOULD ALSO NOT S URVIVE. IN SUPPORT THIS CONTENTION, THE LD.COUNSEL FOR THE ASSESSEE HA S PLACED RELIANCE ON THE JUDGEMENT OF THE HONBLE HIGH COURT OF GUJARAT REND ERED IN THE CASE OF RANCHHODBHAI HARIBHAI JADAV VS. ASST.CIT REPORTED A T (1999) 238 ITR 949 = 106 TAXMAN 42 (GUJ.). THE LD.COUNSEL FOR THE ASSESSEE HAS ALSO PLACED RELIANCE ON THE DECISION OF COORDINATE BENCH (ITAT C BENCH ITA NO.2287/AHD /2012 SHREE RAMA MULTI TECH LTD. VS. ACIT ASST.YEAR 1998-99 - 4 - AHMEDABAD) IN THE CASE OF ITO VS. ROCKLINE PROJECTS LTD. IN ITA NOS.3319 & 3320/AHD/2009 FOR AYS 1998-99 & 2003-04 RESPECTIVELY, DATED 16/09/2011. THE LD.COUNSEL FOR THE ASSESSEE HAS DREW OUR ATTENTION TOWARDS PARA-7 OF THE SAID TRIBUNALS DECISION AND THE DECISION OF THE COORDINATE BENCH RENDERED IN THE CASE OF ITO VS. RO CKLINE PROJECTS LTD.(SUPRA) IN SUPPORT OF THE CONTENTION THAT NO PE NALTY UNDER SECTION 271(1)(C) OF THE ACT CAN BE LEVIED IF QUANTUM IN RE SPECT OF WHICH LEVY OF PENALTY IS PROPOSED, IS DELETED. HE ALSO RELIED ON THE DECISION OF THE COORDINATE BENCH (ITAT INDORE BENCH, INDORE) PASSED IN ITA NO.257/IND/2011 FOR AY 2005-06 IN THE CASE OF ACIT VS. M/S.PEOPLES GENERAL HOSPITAL (P) LTD., DATED 06/02/2012, IN SUP PORT OF THE CONTENTION THAT ON THE BASIS OF WHICH, PENALTY FOR CONCEALMENT WAS LEVIED, ARE DELETED, THERE REMAINS NO BASIS AT ALL FOR LEVYING THE PENALTY FOR CONCEALMENT, CONSEQUENTLY, NO PENALTY SURVIVES AND THE SAME IS LIABLE TO BE CANCELLED BECAUSE WHEN THE VERY BASIS FOR LEVYIN G THE PENALTY IS NO MORE IN EXISTENCE. HE SUBMITTED THAT THE COORDINAT E BENCH HAD RELIED UPON THE JUDGEMENT OF HONBLE APEX COURT RENDERED I N THE CASE OF K.C.BUILDERS VS. ACIT REPORTED AT 265 ITR 562(SC). 2.1. ON THE CONTRARY, LD.SR.DR RELIED UPON THE ORDE RS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE DELAY IN FILING THE AP PEAL CANNOT BE CONDONED AS THE ASSESSEE HAS NOT DEMONSTRATED THE R EASONABLE CAUSE. ITA NO.2287/AHD /2012 SHREE RAMA MULTI TECH LTD. VS. ACIT ASST.YEAR 1998-99 - 5 - 3. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE JUDGEMENTS/DECISIONS RELIED UPON BY THE LD.COUNSEL FOR THE ASSESSEE. THERE IS NO DISPUTE WITH REGARD TO THE F ACT THAT THE PRESENT APPEAL IS BARRED BY 2379 DAYS. THE REASON FOR DELA Y IN FILING THE APPEAL IS STATED TO BE DUE TO WRONG ADVICE GIVEN BY THE CO NSULTANT OF THE ASSESSEE. THE REVENUE HAS NOT DISPUTED THE FACT TH AT THE ADDITION ON THE BASIS OF WHICH PENALTY WAS LEVIED, HAS BEEN DELETED . THEREFORE, IN OUR VIEW, THE DECISION OF THE COORDINATE BENCH PASSED I N ITA NOS.3319 & 3320/AHD/09 FOR AYS 1998-99 & 2003-04 RESPECTIVELY (SUPRA), WHEREIN THE COORDINATE BENCH HAS HELD AS UNDER:- 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN OUR CONSIDERED OPINION THE LD.CIT(A) HAS RIGHTLY DELETED THE PENALTIES. THE PROPOSITION THA T NO PENALTY UNDER SECTION 271(1)(C) CAN BE LEVIED IF QUANTUM IN RESPECT OF WHICH LEVY OF PENALTY IS PROPOSED, IS DELETED, HAS BEEN HELD BY SEVERAL AUTHORITIES SUCH AS ADDL.CIT VS. BADRI PRAS AD KASHI PRASAD (1993) 200 ITR 206 (ALL), PRABHAT OIL TRADER S VS. ITO (1996) 218 ITR (AT) 39 ITAT (AHD), CITY DRY FISH CO . VS. CIT (1999) 238 ITR 63 (A.P.), CIT VS. MD.BUX SAUKAT ALI (2004) 265 ITR 326 (RAJ) AND CIT VS. SHISHPAL (2002) 255 ITR 1 87 (RAJ). IN VIEW OF THE ABOVE, WE UPHOLD THE ORDERS OF LD.CIT(A ) AND DISMISS THE APPEALS FILED BY THE REVENUE. ITA NO.2287/AHD /2012 SHREE RAMA MULTI TECH LTD. VS. ACIT ASST.YEAR 1998-99 - 6 - 3.1. FURTHER, THE COORDINATE BENCH (ITAT INDORE BEN CH, INDORE) IN THE CASE OF ACIT VS. M/S.PEOPLES GENERAL HOSPITAL (P) LTD.[SUPRA] HAS HELD AS UNDER:- 4. IF THE FACTS OF THE PRESENT APPEAL ARE KEPT IN JUXTAPOSITION WITH THE ORDER MENTIONED HEREINABOVE, UNDISPUTEDLY, IN THE Q UANTUM APPEAL OF THE CASE OF THE ASSESSEE, THE ADDITION WAS DELETED BY THE TRIBUNAL AND NO CONTRARY DECISION WAS PRODUCED BEFORE US BY EITH ER SIDE. WE ARE OF THE VIEW THAT WHERE THE ADDITIONS MADE IN THE ASSES SMENT ORDER, ON THE BASIS OF WHICH, PENALTY FOR CONCEALMENT WAS LEVIED, ARE DELETED, THERE REMAINS NO BASIS AT ALL FOR LEVYING THE PENALTY FOR CONCEALMENT, CONSEQUENTLY, NO PENALTY SURVIVES AND THE SAME IS L IABLE TO B CANCELLED BECAUSE WHEN THE VERY BASIS FOR LEVYING THE PENALTY IS NO MORE IN EXISTENCE, THERE IS NO QUESTION OF PENALTY U/S.271( 1)(C) OF THE ACT. OUR VIEW IS FORTIFIED BY THE DECISION FROM HONBLE APEX COURT IN THE CASE OF K.C.BUILDERS VS. ACIT (265 ITR 562)(SC). THE TRIBU NAL IN THE AFORESAID ORDER HAS ALREADY CONSIDERED THE ISSUE BY FOLLOWING VARIOUS JUDICIAL PRONOUNCEMENTS. IN VIEW OF THESE FACTS AN D JUDICIAL PRONOUNCEMENTS, WE FIND NO MERIT IN THE APPEAL OF T HE REVENUE, CONSEQUENTLY, THE STAND OF THE LD.FIRST APPELLATE A UTHORITY IS AFFIRMED. 3.2. IN THE LIGHT OF THE ABOVE BINDING PRECEDENTS, WE ARE OF THE VIEW THAT WHEN THE QUANTUM ON WHICH THE PENALTY IS DELET ED, PENALTY WOULD NOT SURVIVE MERELY BECAUSE THE PRESENT APPEAL HAS BEEN FILED AFTER A DELAY OF 2379 DAYS. THE REVENUE HAS NOT POINTED OUT AS TO HOW THE ASSESSEE HAS TAKEN ADVANTAGE OF NOT FILING THE APPEAL IN TIME. THE HONBLE APEX COURT IN THE CASE OF N.BALAKRISHNAN VS. M.KRISHNAM URTHY REPORTED AT (1998) 7 SCC 123, HAS HELD AS UNDER:- IT MUST BE REMEMBERED THAT IN EVERY CASE OF DELAY, THERE CAN BE SOME LAPSE ON THE PART OF THE LITIGANT CONCERNED. THAT ALONE IS NOT ENOUGH TO ITA NO.2287/AHD /2012 SHREE RAMA MULTI TECH LTD. VS. ACIT ASST.YEAR 1998-99 - 7 - TURN DOWN HIS PLEA AND TO SHUT THE DOOR AGAINST HIM . IF THE EXPLANATION DOES NOT SMACK OF MALA FIDES OR IT IS NOT PUT FORTH AS PART OF A DILATORY STRATEGY, THE COURT MUST SHOW UTMOST CONSIDERATION TO THE SUITOR. 3.3. THEREFORE,RESPECTFULLY FOLLOWING THE RATIO LAI D DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF N.BALAKRISHNANVS.M.KRI SHNAMURTHY(SUPRA) AND IN THE PECULIARITY OF THE FACTS OF THE PRESENT CASE, WE HEREBY CONDONE THE DELAY AND DIRECT THE ASSESSING OFFICER TO DELET E THE PENALTY. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON MONDAY, THE 7 TH DAY OF DECEMBER, 2015 AT AHMEDABAD. SD/- SD/- ( ) ( ) ( ANIL CHATURVEDI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 07/ 12 /2015 2.., .../ T.C. NAIR, SR. PS !'#$%&' &$ / COPY OF THE ORDER FORWARDED TO : 1. '% / THE APPELLANT 2. &''% / THE RESPONDENT. 3. 345 6 / CONCERNED CIT 4. 6 ( ) / THE CIT(A)-XIV, AHMEDABAD 5. 7 8 &45 , 45. , 3 / DR, ITAT, AHMEDABAD 6. 8:; <* / GUARD FILE. ! / BY ORDER, '7 & //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD