ITO, Ward.1(1)(1), Ahmedabad V. M/s. Adani Retail P.Ltd., Ahmedabad

ITA 2359/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5943 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 07-08-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA.NO.2359/AHD/2015 / ASSTT. YEAR: 2008-09 ITO, WARD - 1(1)(1) AHMEDABAD. VS M/S.ADANI RETAIL PVT. LTD. NR. ADANI HOUSE MITHAKHALI CROSS ROADS NAVRANGPURA AHMEDABAD 380 009. PAN : AABCB 5215 H ! / (APPELLANT) '# ! / (RESPONDENT) REVENUE BY : SHRI PRASOON KABRA, SR.DR ASSESSEE BY : SHRI P.M.MEHTA WITH SHRI G.M. THAKKAR, ARS. / DATE OF HEARING : 06/03/2018 / DATE OF PRONOUNCEMENT: 07/03/2018 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST OR DER OF LD.CIT(A)-1, AHMEDABAD DATED 6.5.2015 PASSED FOR THE ASSTT.YEAR 2008-09. 2. SOLITARY GRIEVANCE OF THE REVENUE IS THAT THE LD .CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING PENALTY OF RS.68,75,870/- IMPOSED BY THE AO UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED ITS RETURN OF INCOME ON 22.9.2008 DECLARING TOTAL INCOME AT RS.8,65,012/ -. ASSESSMENT ORDER WAS PASSED UNDER SECTION 143(3) ON 28.12.2010 DETERMINI NG TOTAL INCOME AT ITA NO.2359/AHD/2015 2 RS.2,02,29,097/-. THE LD.AO HAS INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. BASICALLY CASE OF THE ASSESS EE IS THAT UNDER SCHEME APPROVED BY THE HONBLE GUJARAT HIGH COURT DEMERGER HAS TAKEN PLACE. DISPUTE WITH REGARD TO BIFURCATION OF BROUGHT FORWA RD DEFICIENCIES I.E. UNABSORBED LOSSES AND UNABSORBED DEPRECIATION FOR C OMPUTING THE SAME IN THE HANDS OF THE ASSESSEE AROSE BEFORE THE AO WHO MADE ADJUSTMENT AND ASSESSED INCOME AT RS.2,02,29,097/- AS AGAINST DECLARED INCO ME AT RS.8,65,012/-. ADJUSTMENTS MADE BY THE AO ON ACCOUNT OF BIFURCATIO N OF BROUGHT FORWARD UNABSORBED DEPRECIATION AND LOSSES TRAVELLED UPTO T HE TRIBUNAL IN ITA NO.2177/AHD/2011. THE LD.COUNSEL FOR THE ASSESSEE POINTED OUT THAT TRIBUNAL HAS SET ASIDE THIS ISSUE TO THE FILE OF AO FOR RE-A DJUDICATION VIDE ORDER DATED 13.12.2017. HE PLACED ON RECORD COPY OF THE TRIBUN ALS ORDER. ON THE STRENGTH OF THIS ORDER, IT WAS CONTENDED THAT SINCE QUANTUM ADDITION HAS BEEN SET ASIDE TO THE FILE OF THE AO, THEREFORE, THIS PE NALTY IS NOT SUSTAINABLE. THE LD.DR WAS UNABLE TO CONTROVERT TO THIS ASPECT. 4. WE HAVE HEARD LD.REPRESENTATIVES, AND GONE THROU GH THE RECORD. WE FIND THAT SUB-CLAUSE (III) OF SECTION 271(1)(C) PRO VIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEMPLATES THAT TH E ASSESSEE WOULD BE DIRECTED TO PAY A SUM IN ADDITION TO TAXES, IF ANY, PAYABLE HIM, WHICH SHALL NOT BE LESS THAN, BUT WHICH SHALL NOT EXCEED THREE TIMES THE AM OUNT OF TAX SOUGHT TO BE EVADED BY REASON OF CONCEALMENT OF INCOME AND FURNI SHING OF INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, THE QUANTIF ICATION OF THE PENALTY IS DEPENDED UPON THE ADDITION MADE TO THE INCOME OF TH E ASSESSEE. IN THE PRESENT CASE, ISSUE OF ADDITION ON WHICH PENALTY HA S BEEN IMPOSED HAS BEEN SET ASIDE BY THE TRIBUNAL TO THE FILE OF THE AO FOR RE-ADJUDICATION VIDE ORDER DATED 13.12.2017 (SUPRA). THUS, ISSUE OF PENALTY U NDER SECTION 271(1)(C) ALSO DESERVES TO BE SET ASIDE TO HIS FILE TO DECIDE WHET HER THE ASSESSEE IS LIABLE TO BE ITA NO.2359/AHD/2015 3 VISITED WITH PENALTY OR NOT AFTER ADJUDICATION ON Q UANTUM ADDITION ON MERIT. THEREFORE, IMPUGNED PENALTY IMPOSED UNDER SECTION 2 71(1)(C) OF THE ACT IS SET ASIDE TO THE FILE OF AO TO BE DECIDED IN ACCORD ANCE WITH LAW AS INDICATED ABOVE. 5. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 7 TH MARCH, 2018 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER